Published in El Nuevo Herald on March 18, 2011
The economic crisis we face in the U.S. for the past three years has, in addition to some supporting actors, two main actors: banks and credit bureaus.
As a result of the housing bubble, many consumers assumed impossible to meet financial commitments once the property returned to a value even smaller than the original. To avoid foreclosure, consumers chose to safeguard all your home, delaying other payments such as automobile and credit cards. This results in a severe penalty of the credit bureaus, which drastically reduced the rating of these consumers, severely limiting their access to new credits.
The banks, following the dictates of the credit bureaus, reduced its portfolio of new loans by 90%. Despite new technologies and a broader financial spectrum, many bank executives came to a fantastic solution: auto given larges bond. This came up with a penalty to charge consumers who cashed a check in their offices and clients who did not maintain a certain minimum balance in their current accounts.
As a result of the housing bubble, many consumers assumed impossible to meet financial commitments once the property returned to a value even smaller than the original. To avoid foreclosure, consumers chose to safeguard all your home, delaying other payments such as automobile and credit cards. This results in a severe penalty of the credit bureaus, which drastically reduced the rating of these consumers, severely limiting their access to new credits.
The banks, following the dictates of the credit bureaus, reduced its portfolio of new loans by 90%. Despite new technologies and a broader financial spectrum, many bank executives came to a fantastic solution: auto given larges bond. This came up with a penalty to charge consumers who cashed a check in their offices and clients who did not maintain a certain minimum balance in their current accounts.
Some bank executives, brazenly, have argued that many customers are now asking for changes to their loans because their home price declined, but when the value of their home has doubled, no customer returned some of their profits to the bank. With this in mind, is very hard to overcome the crisis.
Politicians should take notice of this matter by legislating for the three major credit bureaus do not penalize consumers who have been affected by the crisis. Instead, they would turn to bank financing for these special cases. Also, the government should increase its guarantee to underwrite the new credits. And it should create an oversight committee to regulate the activity of the entities that rarely collaborate on economic recovery.
Politicians should take notice of this matter by legislating for the three major credit bureaus do not penalize consumers who have been affected by the crisis. Instead, they would turn to bank financing for these special cases. Also, the government should increase its guarantee to underwrite the new credits. And it should create an oversight committee to regulate the activity of the entities that rarely collaborate on economic recovery.
BENJAMIN F. DeYURRE
Miami
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