Target: CEO of Wells Fargo John G. Stumpf
Goal: Stop giving high interest rate loans to customers with bad credit
Economics experts say that what is happening in the car loan business mirrors what happened with housing mortgages in 2008, where banks gave out loans to people who are poor and have bad credit. This results in high interest rates that many of these people cannot afford to pay, but banks are handing them out because in the end, they earn a huge profit. The banks need to stop preying on those who are impoverished, and stop handing out irresponsible loans.
Called “predatory lending,” these loans are given out by banks such as Capital One and Wells Fargo, along with banks who have no reputation whatsoever. These businesses work with car dealerships to make a huge profit on the poor. These loans are given to customers who have bad credit, and some have even declared bankruptcy. Many of these loans are for used cars, where the owners have to not only pay an extravagant interest rate, but also pay for expensive repairs on their car. Jonathan and Marcelina Mojica recently took out a loan, and their total loan payments will amount to $30,000, which is double what the car is worth. The loan is from Wells Fargo, and months earlier, the bank refused to give them a $10,000 personal loan.
Banks are able to charge their customers these high legal loan shark rates because their customers have such bad credit scores. These customers have no choice but to take these sub prime loans because no other bank will take them. Such irresponsible loans will not only ruin the lives of many of these customers, but they will also destroy our economy if these people aren’t able to pay back these loans. Jonathan and Marcelina pay $600 a month for their car, stating that they put more money into their car than they do towards their food. Others must be in this terrible situation as well, and it is not ethical for banks to be making so much money on the poor. Urge the banks to stop handing out these loans, as it is placing our well being and our economy in danger of collapsing.
Dear CEO John G. Stumpf,
Recently, the New York Times covered a story about banks practicing “predatory lending,” where loans are given to customers who have bad credit. These loans carry legal loan shark rates, rates that the impoverished have difficulty making payments. These loans are for used cars, where owners are forced to shell out more money to ensure that their cars stay running.
This practice is not only unethical to the people, but they place our economy in danger of collapsing. While I understand that those with bad credit have a history of not making their payments on time, that does not make it acceptable for your bank to make a huge profit off of a financial situation. I urge you to stop this predatory lending at once.
[Your Name Here]
Photo credit: Duncan Lilly via Wikimedia Commons