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How We Justified Piling Debt on Poor Customers

144 points by smn1234 7y ago

_bxg1 7y ago
> It was common to hear analysts say things like, “I just love to solve problems.” But what they were really doing was solving something closer to puzzles. It’s clear to me, for example, that the janitor at my middle school solved problems when she cleaned up trash. It’s far less clear whether analysts at Capital One are solving problems or creating them. > The rise of data science, machine learning, and artificial intelligence means that you don’t need venal corporate tycoons wearing Monopoly Man hats to grind the faces of the poor into the dirt. Under the data-driven directives of Capitalism 2.0, you can have a bunch of friendly data scientists who don’t think too deeply about the models they’re building, while tutoring low-income kids on the side. As far as they’re concerned, they’re refining a bunch of computer algorithms. Let us all remain vigilant that the puzzles we solve in code are actually solving problems, and not creating them.
- anon1m0us 7y ago
  I heard a story on the radio the other day about the debate of whether or not we should allow robots to kill people. I wonder if ever in history there was a time when we needed to kill people faster and set our engineering minds to solve that problem. Would there be any lessons to learn we could apply to our current problem of automated human life destruction. I just can't believe there are human beings who would actually write that code! Edit: Clarification, Yes, robots that kill automatically with no human intervention. Programmed to seek and kill the enemy.
  - inreplytothat 7y ago
    How about the machine gun?
    - anon1m0us 7y ago
      Humans aim and pull the trigger -- and they aren't self-motive. Robots are different.
      - PhilWright 7y ago
        There is no difference between a machine gun and a robot. A person designs a machine gun but does not pull the actual trigger. There is an army officer that orders the weapon be deployed and the rules of engagement for when it can be used. A person designs a killer robot but does not activate it. There is an army officer that orders the weapon be deployed and the rules of engagement for when it can be used. There is always a person that is responsible for the use of a munition. Maybe that person is higher up the chain with a killer robot than a machine gun. If you want to launch a nuclear bomb then it goes all the way to the top of the chain. But there is always a person that is responsible for the death caused by the munition.
  - QuercusMax 7y ago
    I mean, you have people who design weapons. They're explicitly intended to kill people. Is programing a robot to kill people any different from programming a weapon targeting system? I'm not endorsing this, mind you, but it's not really any different that what we've been doing to each other for millenia.
    - evancox100 7y ago
      I wonder if OP meant “deciding whether or not to kill people”.
      - anon1m0us 7y ago
        Yes, thank you, I did. To clarify, the debate was about allowing robots to kill without a human in the loop. Basically, drop the robots in and let them start killing by whatever algorithm has been programmed into them.
    - anon1m0us 7y ago
      That's my point. There's been a steady trend toward global annihilation and as a species we are running toward it. I was out with a bunch of friends who worked for Northrup Grumman and I was like, "Why do you guys work there building things designed to kill people?" Synchronized response: The money is good.
      - tonyedgecombe 7y ago
        >Synchronized response: The money is good. It has to be because many people wouldn't work there.
    - onemoresoop 7y ago
      But the responsibility of “pulling the trigger” makes these engineers sheltered from any guilt. However, engineering the cases for triggering the robots to kill and the resulting bugs can be directly attributed to the team that designs it. Whether they care or not, or ever have a hard time falling asleep at night is a different story..
  - pessimizer 7y ago
    Oppenheimer and Einstein were very nice people who in general weren't in agreement with most of the policies of the governments that they helped develop killing machines for. Those governments knew this, and distrusted them for it. Only some of us are sociopaths (a lot of people in tech, sadly), but most of us just compartmentalize and rationalize, with a special pitfall for the math-oriented is the truism that technology doesn't have moral implications in and of itself, just the uses to which it is put. The last is one of those things that people never bother to justify, they just think of it as an obvious implication of a impenetrable division between abstraction and the material world that is nevertheless marked by humans shuttling information between the two. To me, thinking of people this way is just warmed-over dualism. If you introduce a technology into the world, you have to consider the possibilities every type of person with every possible aim having control of that technology. Not doing this is simply not scientific.
    - PavlovsCat 7y ago
      > People have a series of rationalizations. People say for example that science and technology have their own logic, that they are in fact autonomous. This particular rationalization is profoundly false. It is not true that science marches on in defiance of human will, independent of human will, that just is not the case. But it is comfortable, as I said: it leads to the position that "if I don't do it, someone else will." > Of course if one takes that as an ethical principle then obviously it can serve as a license to do anything at all. "People will be murdered; if I don't do it, someone else will." "Women will be raped; if I don't do it, someone else will." That is just a license for violence. > Other people say, and I think this is a widely used rationalization, that fundamentally the tools we work on are "mere" tools; This means that whether they get use for good or evil depends on the person who ultimately buys them and so on. > There's nothing bad about working in computer vision, for example. Computer vision may very well some day be used to heal people who would otherwise die. Of course, it could also be used to guide missiles, cruise missiles for example, to their destination, and all that. You see, the technology itself is neutral and value-free and it just depends how one uses it. And besides -- consistent with that -- we can't know, we scientists cannot know how it is going to be used. So therefore we have no responsibility. > Well, that is false. It is true that a computer, for example, can be used for good or evil. It is true that a helicopter can be used as a gunship and it can also be used to rescue people from a mountain pass. And if the question arises of how a specific device is going to be used, in what I call an abstract ideal society, then one might very well say one cannot know. > But we live in a concrete society, [and] with concrete social and historical circumstances and political realities in this society, it is perfectly obvious that when something like a computer is invented, then it is going to be adopted will be for military purposes. It follows from the concrete realities in which we live, it does not follow from pure logic. But we're not living in an abstract society, we're living in the society in which we in fact live. > If you look at the enormous fruits of human genius that mankind has developed in the last 50 years, atomic energy and rocketry and flying to the moon and coherent light, and it goes on and on and on -- and then it turns out that every one of these triumphs is used primarily in military terms. So it is not reasonable for a scientist or technologist to insist that he or she does not know -- or cannot know -- how it is going to be used. -- Joseph Weizenbaum, http://tech.mit.edu/V105/N16/weisen.16n.html http://tech.mit.edu/V105/N16/weisen.16n.html
  - PavlovsCat 7y ago
    [beaming smile] "Zat could be eezily done with a compjutah!" One person writes calculate_attitudes(person) Another writes calculate_abilities(person) Another writes calculate_desirability(person, calculated_attitudes, calculated_abilities) Another writes determine_spatial_location(person) Another writes parse_list_of_protected_persons(whitelist) Another writes move_to_safe_vantage_point(drone, picked_target, whitelist) Another writes aim_cannon(cannon, spatial_location) Another writes fire_cannon(cannon) Another writes determine_witnesses(spatial_location, timestamp) Then you just feed witness_person, witness_attitudes, witness_abilities into calculate_desirability, and loop it forever, killing the least obedient n%. No involved person really did much, or even anything, as far as they are aware. Especially since you can, as Joseph Weizenbaum -- the one person HN really should know, but really doesn't -- pointed out, design/build/train those algorithms and machines with all sorts of rather benign stuff. E.g. you train for finding missing persons, but then you can also just feed it names and photos of dissidents instead of missing persons. The people "refitting" may know about the people who build them in the first place, but not the other way around.
    - anon1m0us 7y ago
      Yes, that's correct. That's the idea. That is the goal. People are working on this right now. Writing basically, exactly those functions. The survival of humanity has escaped ALL tribal boundaries. The human beings with the most power are the ones contributing the most to our assured destruction. It's basically inevitable. I am not a religious person, but ... has this happened before? Have we destroyed ourselves before? On another planet? Millions of years ago, before the dinosaurs? How could revelations have predicted it so well thousands of years ago, hundreds maybe, before there was any evidence all of this would be happening right now. Lots of religions have these stories about ourselves destroying ourselves and our planet. Indian religions describe it too I know for sure. Battles of the gods in ships with laser like weapons. It's like we are uncontrollably, knowingly, ... desiring of self-destruction as a species. Why are we like this and how do we change us? Maybe I'm insane.
      - PavlovsCat 7y ago
        To give credit where it's due, I kind of took this and ran with it: > It should be noted that no ethically-trained software engineer would ever consent to write a DestroyBaghdad procedure. Basic professional ethics would instead require him to write a DestroyCity procedure, to which Baghdad could be given as a parameter. -- Nathaniel Borenstein > Why are we like this and how do we change us? Don't take this the wrong way, because I totally "feel you", to put it briefly, but my first thought is, there is no "us": > When all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing. -- Hannah Arendt For me it's important to not forget that sociopaths are weak rather than strong, and bluffing rather than laughing. Outside of forms of communications they can dictate and manipulate, that is, without some form of violence or dishonesty, on their own and as themselves, they have nothing, and can be made to implode rather easily. A murdering SS officer is not what sums up this phenomenon, Hitler, in his bunker, blowing his brains out, after blaming everyone with words that are obviously garbage once the claqueurs are gone, is. No, I'm not saying I'm innocent and others are the sole source of evil. But we're still not all the same, it's a spectrum and we're not all in the same spot, and I reject that it's some "average human" doing everything. That's an abstraction, only the actually existing individuals are real, and the worst thing that can happen is not resisting and realizing it was "in vain" (and it never is when it comes to what it makes you as a person), the worst thing that can happen is that we realize we fell for rather mediocre people who faked it until they made it, and that we could have resisted easily (in comparison to the titanium steel gravity well humanity would be in then).
  - deleted 7y ago
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  - quotemstr 7y ago
    I'd write that code. I don't believe that violence is wrong. I don't believe that defense work is wrong. I don't have to lean on my ported ignorance of a technology's applications because I don't buy into the moral framework that says that this use or that use is wrong. Every technology not forbidden by physics is inevitable. If somebody else is going to get a powerful tool to use against me, I'll damn well make sure I have that tool too. And if I can, I'll get it first. You want safety from killer robots? Make more and better killer robots than the other guy.
  - Noos 7y ago
    > Yes, robots that kill automatically with no human intervention. Programmed to seek and kill the enemy. You know what those robots can't do? They can't rape the enemy. They can't kill their superior officers, traffic in or get addicted to drugs, and ideally, they won't be killing anyone but their target. They can't be made prisoners of war and tortured, and they can't really be hostages, either captured or because of proximity to the combat theater. If the robot is destroyed, you don't need to tell someone's mother their son isn't coming home. It may even stop wars because the other side is only destroying materiel that can be replaced instead of lives. A deterrent. I know the negative arguments against them very well, and I also agree with them; you can't do this because it can and will spread and it makes killing much "cheaper" for the same reasons. But why is it so hard to imagine why people would write that code? It's really the same reaasons why people here love self-driving cars; to remove human error that causes waste and death.
    - timoth3y 7y ago
      > They can't be made prisoners of war and tortured, and they can't really be hostages, either captured or because of proximity to the combat theater. That sounds like a feature, but it has a very important downside. One of the biggest reasons that politicians hesitate to send in the troops is for the very reason you mention. Killing from afar with no accountability or political downside is a recipe for permanent warfare. In fact, there is a significant upside to them from the defense contractors. You could argue (and many have) that we have already seen the start of this with the US drone program.
  - hkai 7y ago
    Would you program robots to kill Nazis?
  - wademealing 7y ago
    There is almost 0% reason why this can't be done already.
  - deleted 7y ago
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rossdavidh 7y ago
I believe (although I can't find it now) that it was Nassim Taleb who said something like, "Every truly long-lived civilization has banned interest."
- xhkkffbf 7y ago
  Examples? Islam is not as old as Christianity. Nor Judaism. This seems wrong on the face of it. Oh sure, there might be some lost tribe in the Amazon but I don't accept it, even if it is technically long-lived. Interest is how we pay people to save and share their savings with others. Growth and reinvestment is much easier with it. This is why the Muslim world has come up with financial gymnastics to reward savers without technically paying some interest.
  - _bxg1 7y ago
    > Islam is not as old as Christianity. Nor Judaism. This seems wrong on the face of it. Sorry, what? What does that have to do with anything?
    - TeMPOraL 7y ago
      If you're looking for examples of "long-lived civilizations" on Earth, you might be interested in the longest-living cultural institutions. Islam, Christianity and Judaism are such millennia-old institutions. And, a bit contrary to GP's point, all of them have, or had, limited bans on interest.
      - rubyskills 7y ago
        I think this is because of the context at the time. Your borrower should be aware of what they're signing up for. Debtor's prisons also existed. There is a lot different then than now and I think lending is a much safer activity today if is regulated properly. I like to think of religion as early law. Pork was also probably not a very healthy meat to eat at the time. Now it is probably an outdated thing.
jessriedel 7y ago
> But the morality of the credit card executive is a morality of autonomy: If I’m giving people choices, that’s a good thing. “How could I be making this customer worse off,” a credit card executive asks herself, “if nobody is forced to use this product?” I guess I'm an evil executive, because I do think that the default assumption is that people are better with more choices. There are obviously exceptions, but I'd want some evidence to the contrary before I started blaming others for offering them choices. And I'd want especially strong evidence if banning those choices is damn near impossible (since loan sharks will just appear), so that unilaterally deciding to not offer choices makes people even worse off (because they go to the loan shark instead). I went searching in this article for evidence, but couldn't find much. This seems to be the extent of it (am I missing something substantive?): > As Scott Schuh and Scott Fulford have shown in a paper for the Federal Reserve of Boston, people who get credit limit increases tend to keep their “utilization” constant. In other words: If a person is carrying a $1,500 balance when they have a $3,000 credit limit, you’d expect them to start carrying a $4,000 balance if the limit is raised to $8,000. If most people use the full credit-limit increases they are offered, the thinking goes, that must mean that most people want to borrow more money. Isn't this consistent with poor people needing loans, and yet them also wanting to make keep some of their credit limit in case things get even worse? The author's main argument seems to be that Capital One has a lot of research resources, and if they were making their subprime customers better off they would be able to prove it with data, but they can't so they must not be. > If [CEO] Fairbank cared to know the answer to any question—such as, “How many of the loans that we give out actually make the borrower’s life better?” or “What are the consequences of raising our credit card interest from the prime rate plus 19 percent to the prime rate plus 23 percent on child hunger in America?”—he could have gotten thoroughly researched answers. But those are the kinds of questions that the entire Capital One workplace was designed to drive out of view. The author concludes > When I was at Capital One, I wanted to understand if it was possible to keep loans as an option for the people who have exhausted all their better alternatives—without also causing suffering for those who would be better off forgoing purchases or borrowing money from friends and family. After five years, I concluded it was more or less possible to achieve that goal—to do the good loans without doing the bad loans. But I can't see why she thinks that.
- 7y ago
xhkkffbf 7y ago
When it comes down to it, pretty much every service takes advantage of someone's need. Someone needs to borrow money? Sure, lending the money at an interest rate takes advantage of them. But so does billing for emergency room services or, heck, charging for a bottle of water on a hot day. Get over yourself-- and good luck finding a job where you're not pandering to someone's needs and then exploiting it to make a living.
- _bxg1 7y ago
  But in those transactions both parties end up better-off than they were before. Predatory loans are more akin to gambling or heroine: they intentionally undermine a person's rational decision-making in order to leech value from them, without any reciprocity. This undermines capitalism itself, in a way.
- maximente 7y ago
  honest question: do you think $23B interest is just "making a living"? because if not, then you acknowledge there's an opportunity to charge a teeny bit less, and maybe not move in to an uber chic building, to completely maximize potential profit according to the altar of profit-seeking. hell, according to this whole "efficient allocation of resources" "hypothesis" we should have long ago arrived at a point where the only way for these poor, poor banks to make a nickel is to massively innovate on risk models, technology, etc. because there's so much money (=> competition) that hundreds of firms are competing by lowering interest rate and there's barely any revenue to be made to pay for things like employees and computers. so why aren't we there yet?
  - xhkkffbf 7y ago
    It's a fair point, but this $28b is not for one person. There are probably hundreds of thousands of people working at Capital One. All of the profit is spread out amoungst them. (Not evenly, of course). Many of them are making a pretty average salary. So yes, for them it's just making a living.
mjevans 7y ago
"... over the long run, a publicly traded company wasn’t going to sacrifice a meaningful amount of income to avoid destroying lives—unless the law required it." Emphasis mine; I believe that's the true point of the article. I also believe that banks, and lending institutions generally, as experts in that field (rather than average consumers which should not be expected to be experts in that field) should have a legal duty to the customer to act in the customer's best interests first.
- breck 7y ago
  Big companies are good at following laws and great at following unfair laws.
- harryh 7y ago
  should have a legal duty to the customer to act in the customer's best interests first What does this even mean though? Say I'm getting a loan from a bank. It's in my best interest to get that loan for 0%. But it's obviously not in the bank's best interest.
  - manicdee 7y ago
    We used to define this using heuristics like limiting loans to amounts that can be serviced on ⅓ of the primary household income. We could go back to using those rules, the catch is that people desperate for finance will shop around to find a less principled lender, so FOMO leads to acquiring customers who are one bad week away from defaulting.
  - absherwin 7y ago
    That's a zero sum game. Let's consider two possibilities that aren't zero sum. Late payments: A credit card company might make slightly more money when people pay late than it costs them in servicing and default costs while the cost of the fees alone may exceed that benefit even ignoring the cost of a diminished credit score Increasing spending and borrowing: A company does marketing that convinces people to spend an amount (either through marketing a new card, a line increase or straight up marketing spend), that nets the issuer $100 in value and creates $30 a month in interest for the customer for six years. The argument is the same as any other case of information asymmetries that create negative externalities. How should we regulate marketing cigarettes? How should we regulate marketing cotton candy? A purist would argue we ought to tax those activities.
NTDF9 7y ago
There is a place for debt in society. And that is: emergencies. But why the hell does debt have to be the only way of creating money is totally beyond me.
- faissaloo 7y ago
  One person borrows to afford something, which drives the price of that thing up creating further incentive for the person who wants to compete with that person to go into more debt to obtain said thing repeat ad infinitum.
- rubyskills 7y ago
  How does one acquire the necessary funds for larger projects when one does not personally have the funds to do so? Debt always needs to be measured against the value of brings. Does the interest make up for the value you were able to generate today and throughout the lifetime of the debt repayment? IMO, there is good debt and bad debt (and a gray area in between). My personal rule of thumb is, does that debt render me revenue above the monthly repayment and will it do so through the lifetime I hold it? That is good debt. The rest is bad. Now, you can argue that other debts provide more than monetary benefit. That is where the gray area is. That is a personal decision.
  - NTDF9 7y ago
    > How does one acquire the necessary funds for larger projects when one does not personally have the funds to do so? Good point. As a thought experiment, can you answer why the larger project costs more that what an average person can already afford?
    - rubyskills 7y ago
      Great question! As it applies to new real estate specifically, you have a lot of materials, labor taxes etc to deal with. These are the most common sorts of business debts that I've been exposed to. For existing real estate, I see value of things going up in value largely due to population increase in a certain area combined with the fed printing money (which it claims to do so constantly because the population will always be increasing?). I also see values wildly inflated due to foreign investment. A big issue in general is also due to the banking sector. I think the US government allows banks to go a little crazy with lending to everyone on anything without recourse. That being said, I personally benefit from the system allowing me to borrow money so cheaply. Sorry if this post was a bit disorganized. I have a lot of thoughts on it and it is a great thought experiment. :)
harryh 7y ago
My natural tendencies are definitely in the libertarian/capitalist direction. I think that people should be able to whatever they damn well please with their money. I think that they will get it right more often than not and that when the government steps in to make laws restricting the free exchange of goods/services/money it's almost always a bad idea. But I'm also a personal finance nerd, so eventually I found myself reading https://www.reddit.com/r/personalfinance/ https://www.reddit.com/r/personalfinance/ And then I read different versions of the same story over and over and over again. People with far more credit card debt than they could ever pay off. More than a year's salary worth of debt. People that we just stupid about money, and bought way more stuff than they could afford encouraged all the way by the credit card companies and advertising and keeping up with the Joneses. So now, from time to time, I sometimes find myself wondering if credit cards should just be illegal. Such thoughts are heresy in my own mind, and I don't know how to deal with them really especially because I know that credit cards have been great for me with my 2% cash back and airline points. And I know that they can be great for people who get into a temporary cash crunch and know how to be wise about such things. But then I read another couple of pages of /r/personalfinance and I wonder again. Maybe people do need protecting from themselves. It certainly looks like some of the people posting there do. I find myself very sympathetic to the author's views.
- save_ferris 7y ago
  There’s a simple solution here that doesn’t require banning credit cards: requiring borrowers to demonstrate ability to pay before signing off on a loan. Most creditors do this, it’s usually only the ethically challenged lenders that ignore this. The previous administration passed regulations requiring payday lenders to verify ability to pay before handing out loans, which was promptly crushed by the current admin at the request of the payday loan lobby. Another solution is to cap the max interest rate far below current thresholds. The problem with these loans is that lenders are hoping you’ll get into debt, they’re in no way trying to create a mutually beneficial relationship with their borrowers.
  - lostdog 7y ago
    I'm partial to an even simpler solution: Make it easier to go into bankruptcy, and discharge the loan in bankruptcy. If your debt load is unsustainable, such that your interest payments are more than XX% of your income, then you effectively already are bankrupt. We can either try to get people back on their feet, or let their debtors grind them into the dirt for a while longer.
DoreenMichele 7y ago
So, we don't want to give homeless people jobs because that's uncompassionate. Everyone knows they are charity cases and the only kind thing to do is give them charity, not opportunity. And we don't want to give loans to poor people because that's clearly predatory lending. They would be better off without the option to decide for themselves because everyone knows how stupid they are and how incapable they are if making any kind of decent decision. That's a recipe for a permanent underclass. Opinion of a formerly homeless person who took out a Payday loan to go stay at a dive of a hotel for three nights to escape a deadly storm. My logic: three nights in a hotel was cheaper than replacing my laptop, which I needed to keep earning money. I had no idea how I would eat for the rest of the month and didn't care after walking past a river about six times wider than I had ever seen it and my "safe" campsite for weathering the storm that was currently under probably six to ten feet of water -- before the worst part of the storm rolled in. I just knew I would be in a hotel that night if there was any means whatsoever to arrange it so I wouldn't die that weekend.
- randogogogo 7y ago
  I think the author of the story aptly addressed this as an all to common justification. The tricky ethical bit isn't whether or not cases like your own do exist, but rather really how many of them are there on the whole?
  - DoreenMichele 7y ago
    The more you chip away at the human rights of poor people, the more you succeed in making sure "cases like my own" cannot possibly exist. And that's exactly my point. Your assumption that I'm some weird statistical outlier is exactly the problem. It comes across to me roughly like this: "Oh, Doreen is actually smart or something. But that's the rare exception among the poor. So fuck the rest of 'em!"
    - fzeroracer 7y ago
      The fact of the matter is that things like payday loans exist to exploit the poor and homeless in a way that ensures that they live perpetually in debt. To take your argument to its rational extreme, it would be a bad idea to disallow poor people literally selling themselves to a corporation because that's taking away their basic rights. And this is literally something that happens when you don't put regulations to stop it [1]. The fact that the poor predominately are people who take payday loans which often end up exploitative of their situation should tell you that payday loans might be a bad thing! The norm is that people are not escaping payday loans. Payday loans need to go and we need an actual safety net in place. [1] https://www.theguardian.com/us-news/2015/may/09/us-payday-loans-crisis-borrow-100-to-make-ends-meet-owe-36-times-that-sum https://www.theguardian.com/us-news/2015/may/09/us-payday-lo...
shishy 7y ago
Recently quit working at C1 as well, and share the author's sentiments exactly. Whenever I brought up whether the work we were doing might actually be harmful (even as a general question), coworkers would reflexively quip about what they're doing giving back to the community through outreach, or some other vague response that obfuscated the people behind the problems they were solving. And of course, executives would just spam you with "Change Banking for Good". I couldn't stand it.
- d-sc 7y ago
  Sounds like cognitive dissonance. Your coworkers felt like they are nice people, but nice people don’t steel from the poor, so their brain didn’t know what to do.
arduanika 7y ago
At last a university bureaucrat comes clean! Oh nvm, it's a Capital One employee. False alarm.
- bmer 7y ago
  I'm not from the US (Canada), so it sometimes confuses me when people talk about the cost of college. Doesn't the US have public universities? Are they super expensive too?
  - orionblastar 7y ago
    Just the books are expensive in the USA but inexpensive in the rest of the world. Tuition has gone up even in public schools. Unless the student finds a good paying job after graduation they will struggle with student loan payments.
anm89 7y ago
This is a nice sounding well intentioned pile of crap. This guy doesn't like the concept of credit cards. That's all this boils down to. Instead of making a detailed structured argument about what he feels the problem is, he tells a couple anecdotes about times credit cards didn't work about for people and about his personal feeling that credit cards aren't that great. Ok fine. But then what's the takeaway? Not that there is any structural problem here or that something needs to change but that credit cards make this guy feel bad. This kind of personal therapy masquerading as systemic or policy critique does nothing but rile people up with vague sentiments and directionless anger. It's a net loss for everybody involved. For the record I'm not some kind of bank apologist, but the fact that there are serious structural problems with the way banks operate in the US makes this sort of infectual critique all the more frustrating
Shaddox 7y ago
Forgive my ignorance on the subject of matter, but aren't these credits so expensive precisely because they're handed to unreliable debtors? There is obviously a need for such a product since it's so popular, but it can't be cheap to manage and collect them especially since they're so small.
Aloha 7y ago
I feel like the person who wrote this has never experienced being poor. I used to be poor, I'd much rather have a credit card than need to rely on payday loans, car title loans, or have no access to emergency money at all. Out of all the issues the poor have, this is a relatively minor one, and frankly articles like this are just another form of virtue signaling. "Oh yes, even though I've never been poor, I obviously know best how poor people should be living their lives, and those expensive credit cards have just got to go..." is how it reads. Yes, borrowers need more protections (rolling back the changes to bankruptcy law from 2002-4 is a good starting point), but that mythical person who couldn't get to work without using their card for car repairs? That was me at one point.
- coolgeek 7y ago
  I'm disappointed that this is the top rated comment. "than need to rely on payday loans, car title loans, or have no access to emergency money at all" You'll get no argument from anyone but the purveyors of such predatory products. But it's a false dichotomy argument along the lines of "you have to overlook all of the evil things Uber does because they're the only option for people going to poor neighborhoods." The reality is that both of these things are true - credit cards are the best option for emergencies, AND that consumers (not just the poor ones) are encouraged to outspend their means, often finding themselves falling into catastrophic debt spirals. I didn't bother reading the article, so I can't say whether or not its guilty of virtue signalling. But if it does in fact explain how they "Justified Piling Debt on Poor Customers", it's eminently reasonable to overlook any virtue signalling.
  - Aloha 7y ago
    My suggestion was to change bankruptcy law so these products are less predatory - the fact that its very very hard for the poor to discharge excessive debt via bankruptcy is a huge issue and traps people in a cycle of poverty. Access to credit, real revolving credit, is a boon to the poor, if you can teach yourself the skills to use it wisely, it can provide that cushion that you otherwise wouldn't have. I literally started over again at 27, with my slate clean by waiting 7 years, then I started fresh with a secured card from C1, and built my credit from there - but at some point about a decade ago, I used one of my cards to put tires on my car, which ensured that I had a functional vehicle to continue to use to work - even though I was not of traditional credit worthiness, that purchase allowed me to keep that job, and gave me the skills to find a far better one later. Yes, some do fall into a perpetuity trap, but we need to fix the system to allow for an escape for that, not just change the system so you cant take any risk at all.
PeterStuer 7y ago
How amoral has your socioeconomic policy become when a credit card with a 27 percent interest rate and a $39 late fee marketed to people whose credit is so bad they can’t get a credit limit without putting down a security deposit is even legal?
RickJWagner 7y ago
I wondered if this piece was from an institute of higher learning.
timwaagh 7y ago
You know, some people's destiny is to teach yoga and make pictures with cute African-looking kids. Other people are destined to optimize financial services so there are cute African-looking kids willing to take pictures with mediocre yoga teachers in the first place. All is balanced in a perfect world.
refurb 7y ago
I have a great credit rating and my interest rate is 25% and late fee is $25. Doesn’t sound like the poor are being offered something that drastically different.
- WrtCdEvrydy 7y ago
  Halfway through, I realized they were talking about the 'Bullshit Jobs' book in application.

144 points by smn1234 7y ago

> It was common to hear analysts say things like, “I just love to solve problems.” But what they were really doing was solving something closer to puzzles. It’s clear to me, for example, that the janitor at my middle school solved problems when she cleaned up trash. It’s far less clear whether analysts at Capital One are solving problems or creating them. > The rise of data science, machine learning, and artificial intelligence means that you don’t need venal corporate tycoons wearing Monopoly Man hats to grind the faces of the poor into the dirt. Under the data-driven directives of Capitalism 2.0, you can have a bunch of friendly data scientists who don’t think too deeply about the models they’re building, while tutoring low-income kids on the side. As far as they’re concerned, they’re refining a bunch of computer algorithms. Let us all remain vigilant that the puzzles we solve in code are actually solving problems, and not creating them.

anon1m0us 7y ago
I heard a story on the radio the other day about the debate of whether or not we should allow robots to kill people. I wonder if ever in history there was a time when we needed to kill people faster and set our engineering minds to solve that problem. Would there be any lessons to learn we could apply to our current problem of automated human life destruction. I just can't believe there are human beings who would actually write that code! Edit: Clarification, Yes, robots that kill automatically with no human intervention. Programmed to seek and kill the enemy.
- inreplytothat 7y ago
  How about the machine gun?
  - anon1m0us 7y ago
    Humans aim and pull the trigger -- and they aren't self-motive. Robots are different.
    - PhilWright 7y ago
      There is no difference between a machine gun and a robot. A person designs a machine gun but does not pull the actual trigger. There is an army officer that orders the weapon be deployed and the rules of engagement for when it can be used. A person designs a killer robot but does not activate it. There is an army officer that orders the weapon be deployed and the rules of engagement for when it can be used. There is always a person that is responsible for the use of a munition. Maybe that person is higher up the chain with a killer robot than a machine gun. If you want to launch a nuclear bomb then it goes all the way to the top of the chain. But there is always a person that is responsible for the death caused by the munition.
- QuercusMax 7y ago
  I mean, you have people who design weapons. They're explicitly intended to kill people. Is programing a robot to kill people any different from programming a weapon targeting system? I'm not endorsing this, mind you, but it's not really any different that what we've been doing to each other for millenia.
  - evancox100 7y ago
    I wonder if OP meant “deciding whether or not to kill people”.
    - anon1m0us 7y ago
      Yes, thank you, I did. To clarify, the debate was about allowing robots to kill without a human in the loop. Basically, drop the robots in and let them start killing by whatever algorithm has been programmed into them.
  - anon1m0us 7y ago
    That's my point. There's been a steady trend toward global annihilation and as a species we are running toward it. I was out with a bunch of friends who worked for Northrup Grumman and I was like, "Why do you guys work there building things designed to kill people?" Synchronized response: The money is good.
    - tonyedgecombe 7y ago
      >Synchronized response: The money is good. It has to be because many people wouldn't work there.
  - onemoresoop 7y ago
    But the responsibility of “pulling the trigger” makes these engineers sheltered from any guilt. However, engineering the cases for triggering the robots to kill and the resulting bugs can be directly attributed to the team that designs it. Whether they care or not, or ever have a hard time falling asleep at night is a different story..
- pessimizer 7y ago
  Oppenheimer and Einstein were very nice people who in general weren't in agreement with most of the policies of the governments that they helped develop killing machines for. Those governments knew this, and distrusted them for it. Only some of us are sociopaths (a lot of people in tech, sadly), but most of us just compartmentalize and rationalize, with a special pitfall for the math-oriented is the truism that technology doesn't have moral implications in and of itself, just the uses to which it is put. The last is one of those things that people never bother to justify, they just think of it as an obvious implication of a impenetrable division between abstraction and the material world that is nevertheless marked by humans shuttling information between the two. To me, thinking of people this way is just warmed-over dualism. If you introduce a technology into the world, you have to consider the possibilities every type of person with every possible aim having control of that technology. Not doing this is simply not scientific.
  - PavlovsCat 7y ago
    > People have a series of rationalizations. People say for example that science and technology have their own logic, that they are in fact autonomous. This particular rationalization is profoundly false. It is not true that science marches on in defiance of human will, independent of human will, that just is not the case. But it is comfortable, as I said: it leads to the position that "if I don't do it, someone else will." > Of course if one takes that as an ethical principle then obviously it can serve as a license to do anything at all. "People will be murdered; if I don't do it, someone else will." "Women will be raped; if I don't do it, someone else will." That is just a license for violence. > Other people say, and I think this is a widely used rationalization, that fundamentally the tools we work on are "mere" tools; This means that whether they get use for good or evil depends on the person who ultimately buys them and so on. > There's nothing bad about working in computer vision, for example. Computer vision may very well some day be used to heal people who would otherwise die. Of course, it could also be used to guide missiles, cruise missiles for example, to their destination, and all that. You see, the technology itself is neutral and value-free and it just depends how one uses it. And besides -- consistent with that -- we can't know, we scientists cannot know how it is going to be used. So therefore we have no responsibility. > Well, that is false. It is true that a computer, for example, can be used for good or evil. It is true that a helicopter can be used as a gunship and it can also be used to rescue people from a mountain pass. And if the question arises of how a specific device is going to be used, in what I call an abstract ideal society, then one might very well say one cannot know. > But we live in a concrete society, [and] with concrete social and historical circumstances and political realities in this society, it is perfectly obvious that when something like a computer is invented, then it is going to be adopted will be for military purposes. It follows from the concrete realities in which we live, it does not follow from pure logic. But we're not living in an abstract society, we're living in the society in which we in fact live. > If you look at the enormous fruits of human genius that mankind has developed in the last 50 years, atomic energy and rocketry and flying to the moon and coherent light, and it goes on and on and on -- and then it turns out that every one of these triumphs is used primarily in military terms. So it is not reasonable for a scientist or technologist to insist that he or she does not know -- or cannot know -- how it is going to be used. -- Joseph Weizenbaum, http://tech.mit.edu/V105/N16/weisen.16n.html http://tech.mit.edu/V105/N16/weisen.16n.html
- PavlovsCat 7y ago
  [beaming smile] "Zat could be eezily done with a compjutah!" One person writes calculate_attitudes(person) Another writes calculate_abilities(person) Another writes calculate_desirability(person, calculated_attitudes, calculated_abilities) Another writes determine_spatial_location(person) Another writes parse_list_of_protected_persons(whitelist) Another writes move_to_safe_vantage_point(drone, picked_target, whitelist) Another writes aim_cannon(cannon, spatial_location) Another writes fire_cannon(cannon) Another writes determine_witnesses(spatial_location, timestamp) Then you just feed witness_person, witness_attitudes, witness_abilities into calculate_desirability, and loop it forever, killing the least obedient n%. No involved person really did much, or even anything, as far as they are aware. Especially since you can, as Joseph Weizenbaum -- the one person HN really should know, but really doesn't -- pointed out, design/build/train those algorithms and machines with all sorts of rather benign stuff. E.g. you train for finding missing persons, but then you can also just feed it names and photos of dissidents instead of missing persons. The people "refitting" may know about the people who build them in the first place, but not the other way around.
  - anon1m0us 7y ago
    Yes, that's correct. That's the idea. That is the goal. People are working on this right now. Writing basically, exactly those functions. The survival of humanity has escaped ALL tribal boundaries. The human beings with the most power are the ones contributing the most to our assured destruction. It's basically inevitable. I am not a religious person, but ... has this happened before? Have we destroyed ourselves before? On another planet? Millions of years ago, before the dinosaurs? How could revelations have predicted it so well thousands of years ago, hundreds maybe, before there was any evidence all of this would be happening right now. Lots of religions have these stories about ourselves destroying ourselves and our planet. Indian religions describe it too I know for sure. Battles of the gods in ships with laser like weapons. It's like we are uncontrollably, knowingly, ... desiring of self-destruction as a species. Why are we like this and how do we change us? Maybe I'm insane.
    - PavlovsCat 7y ago
      To give credit where it's due, I kind of took this and ran with it: > It should be noted that no ethically-trained software engineer would ever consent to write a DestroyBaghdad procedure. Basic professional ethics would instead require him to write a DestroyCity procedure, to which Baghdad could be given as a parameter. -- Nathaniel Borenstein > Why are we like this and how do we change us? Don't take this the wrong way, because I totally "feel you", to put it briefly, but my first thought is, there is no "us": > When all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing. -- Hannah Arendt For me it's important to not forget that sociopaths are weak rather than strong, and bluffing rather than laughing. Outside of forms of communications they can dictate and manipulate, that is, without some form of violence or dishonesty, on their own and as themselves, they have nothing, and can be made to implode rather easily. A murdering SS officer is not what sums up this phenomenon, Hitler, in his bunker, blowing his brains out, after blaming everyone with words that are obviously garbage once the claqueurs are gone, is. No, I'm not saying I'm innocent and others are the sole source of evil. But we're still not all the same, it's a spectrum and we're not all in the same spot, and I reject that it's some "average human" doing everything. That's an abstraction, only the actually existing individuals are real, and the worst thing that can happen is not resisting and realizing it was "in vain" (and it never is when it comes to what it makes you as a person), the worst thing that can happen is that we realize we fell for rather mediocre people who faked it until they made it, and that we could have resisted easily (in comparison to the titanium steel gravity well humanity would be in then).
- deleted 7y ago
  [deleted]
- quotemstr 7y ago
  I'd write that code. I don't believe that violence is wrong. I don't believe that defense work is wrong. I don't have to lean on my ported ignorance of a technology's applications because I don't buy into the moral framework that says that this use or that use is wrong. Every technology not forbidden by physics is inevitable. If somebody else is going to get a powerful tool to use against me, I'll damn well make sure I have that tool too. And if I can, I'll get it first. You want safety from killer robots? Make more and better killer robots than the other guy.
- Noos 7y ago
  > Yes, robots that kill automatically with no human intervention. Programmed to seek and kill the enemy. You know what those robots can't do? They can't rape the enemy. They can't kill their superior officers, traffic in or get addicted to drugs, and ideally, they won't be killing anyone but their target. They can't be made prisoners of war and tortured, and they can't really be hostages, either captured or because of proximity to the combat theater. If the robot is destroyed, you don't need to tell someone's mother their son isn't coming home. It may even stop wars because the other side is only destroying materiel that can be replaced instead of lives. A deterrent. I know the negative arguments against them very well, and I also agree with them; you can't do this because it can and will spread and it makes killing much "cheaper" for the same reasons. But why is it so hard to imagine why people would write that code? It's really the same reaasons why people here love self-driving cars; to remove human error that causes waste and death.
  - timoth3y 7y ago
    > They can't be made prisoners of war and tortured, and they can't really be hostages, either captured or because of proximity to the combat theater. That sounds like a feature, but it has a very important downside. One of the biggest reasons that politicians hesitate to send in the troops is for the very reason you mention. Killing from afar with no accountability or political downside is a recipe for permanent warfare. In fact, there is a significant upside to them from the defense contractors. You could argue (and many have) that we have already seen the start of this with the US drone program.
- hkai 7y ago
  Would you program robots to kill Nazis?
- wademealing 7y ago
  There is almost 0% reason why this can't be done already.
- deleted 7y ago
  [deleted]

rossdavidh 7y ago

I believe (although I can't find it now) that it was Nassim Taleb who said something like, "Every truly long-lived civilization has banned interest."

xhkkffbf 7y ago
Examples? Islam is not as old as Christianity. Nor Judaism. This seems wrong on the face of it. Oh sure, there might be some lost tribe in the Amazon but I don't accept it, even if it is technically long-lived. Interest is how we pay people to save and share their savings with others. Growth and reinvestment is much easier with it. This is why the Muslim world has come up with financial gymnastics to reward savers without technically paying some interest.
- _bxg1 7y ago
  > Islam is not as old as Christianity. Nor Judaism. This seems wrong on the face of it. Sorry, what? What does that have to do with anything?
  - TeMPOraL 7y ago
    If you're looking for examples of "long-lived civilizations" on Earth, you might be interested in the longest-living cultural institutions. Islam, Christianity and Judaism are such millennia-old institutions. And, a bit contrary to GP's point, all of them have, or had, limited bans on interest.
    - rubyskills 7y ago
      I think this is because of the context at the time. Your borrower should be aware of what they're signing up for. Debtor's prisons also existed. There is a lot different then than now and I think lending is a much safer activity today if is regulated properly. I like to think of religion as early law. Pork was also probably not a very healthy meat to eat at the time. Now it is probably an outdated thing.

jessriedel 7y ago

> But the morality of the credit card executive is a morality of autonomy: If I’m giving people choices, that’s a good thing. “How could I be making this customer worse off,” a credit card executive asks herself, “if nobody is forced to use this product?” I guess I'm an evil executive, because I do think that the default assumption is that people are better with more choices. There are obviously exceptions, but I'd want some evidence to the contrary before I started blaming others for offering them choices. And I'd want especially strong evidence if banning those choices is damn near impossible (since loan sharks will just appear), so that unilaterally deciding to not offer choices makes people even worse off (because they go to the loan shark instead). I went searching in this article for evidence, but couldn't find much. This seems to be the extent of it (am I missing something substantive?): > As Scott Schuh and Scott Fulford have shown in a paper for the Federal Reserve of Boston, people who get credit limit increases tend to keep their “utilization” constant. In other words: If a person is carrying a $1,500 balance when they have a $3,000 credit limit, you’d expect them to start carrying a $4,000 balance if the limit is raised to $8,000. If most people use the full credit-limit increases they are offered, the thinking goes, that must mean that most people want to borrow more money. Isn't this consistent with poor people needing loans, and yet them also wanting to make keep some of their credit limit in case things get even worse? The author's main argument seems to be that Capital One has a lot of research resources, and if they were making their subprime customers better off they would be able to prove it with data, but they can't so they must not be. > If [CEO] Fairbank cared to know the answer to any question—such as, “How many of the loans that we give out actually make the borrower’s life better?” or “What are the consequences of raising our credit card interest from the prime rate plus 19 percent to the prime rate plus 23 percent on child hunger in America?”—he could have gotten thoroughly researched answers. But those are the kinds of questions that the entire Capital One workplace was designed to drive out of view. The author concludes > When I was at Capital One, I wanted to understand if it was possible to keep loans as an option for the people who have exhausted all their better alternatives—without also causing suffering for those who would be better off forgoing purchases or borrowing money from friends and family. After five years, I concluded it was more or less possible to achieve that goal—to do the good loans without doing the bad loans. But I can't see why she thinks that.

7y ago

xhkkffbf 7y ago

When it comes down to it, pretty much every service takes advantage of someone's need. Someone needs to borrow money? Sure, lending the money at an interest rate takes advantage of them. But so does billing for emergency room services or, heck, charging for a bottle of water on a hot day. Get over yourself-- and good luck finding a job where you're not pandering to someone's needs and then exploiting it to make a living.

_bxg1 7y ago
But in those transactions both parties end up better-off than they were before. Predatory loans are more akin to gambling or heroine: they intentionally undermine a person's rational decision-making in order to leech value from them, without any reciprocity. This undermines capitalism itself, in a way.
maximente 7y ago
honest question: do you think $23B interest is just "making a living"? because if not, then you acknowledge there's an opportunity to charge a teeny bit less, and maybe not move in to an uber chic building, to completely maximize potential profit according to the altar of profit-seeking. hell, according to this whole "efficient allocation of resources" "hypothesis" we should have long ago arrived at a point where the only way for these poor, poor banks to make a nickel is to massively innovate on risk models, technology, etc. because there's so much money (=> competition) that hundreds of firms are competing by lowering interest rate and there's barely any revenue to be made to pay for things like employees and computers. so why aren't we there yet?
- xhkkffbf 7y ago
  It's a fair point, but this $28b is not for one person. There are probably hundreds of thousands of people working at Capital One. All of the profit is spread out amoungst them. (Not evenly, of course). Many of them are making a pretty average salary. So yes, for them it's just making a living.

mjevans 7y ago

"... over the long run, a publicly traded company wasn’t going to sacrifice a meaningful amount of income to avoid destroying lives—unless the law required it." Emphasis mine; I believe that's the true point of the article. I also believe that banks, and lending institutions generally, as experts in that field (rather than average consumers which should not be expected to be experts in that field) should have a legal duty to the customer to act in the customer's best interests first.

breck 7y ago
Big companies are good at following laws and great at following unfair laws.
harryh 7y ago
should have a legal duty to the customer to act in the customer's best interests first What does this even mean though? Say I'm getting a loan from a bank. It's in my best interest to get that loan for 0%. But it's obviously not in the bank's best interest.
- manicdee 7y ago
  We used to define this using heuristics like limiting loans to amounts that can be serviced on ⅓ of the primary household income. We could go back to using those rules, the catch is that people desperate for finance will shop around to find a less principled lender, so FOMO leads to acquiring customers who are one bad week away from defaulting.
- absherwin 7y ago
  That's a zero sum game. Let's consider two possibilities that aren't zero sum. Late payments: A credit card company might make slightly more money when people pay late than it costs them in servicing and default costs while the cost of the fees alone may exceed that benefit even ignoring the cost of a diminished credit score Increasing spending and borrowing: A company does marketing that convinces people to spend an amount (either through marketing a new card, a line increase or straight up marketing spend), that nets the issuer $100 in value and creates $30 a month in interest for the customer for six years. The argument is the same as any other case of information asymmetries that create negative externalities. How should we regulate marketing cigarettes? How should we regulate marketing cotton candy? A purist would argue we ought to tax those activities.

NTDF9 7y ago

There is a place for debt in society. And that is: emergencies. But why the hell does debt have to be the only way of creating money is totally beyond me.

faissaloo 7y ago
One person borrows to afford something, which drives the price of that thing up creating further incentive for the person who wants to compete with that person to go into more debt to obtain said thing repeat ad infinitum.
rubyskills 7y ago
How does one acquire the necessary funds for larger projects when one does not personally have the funds to do so? Debt always needs to be measured against the value of brings. Does the interest make up for the value you were able to generate today and throughout the lifetime of the debt repayment? IMO, there is good debt and bad debt (and a gray area in between). My personal rule of thumb is, does that debt render me revenue above the monthly repayment and will it do so through the lifetime I hold it? That is good debt. The rest is bad. Now, you can argue that other debts provide more than monetary benefit. That is where the gray area is. That is a personal decision.
- NTDF9 7y ago
  > How does one acquire the necessary funds for larger projects when one does not personally have the funds to do so? Good point. As a thought experiment, can you answer why the larger project costs more that what an average person can already afford?
  - rubyskills 7y ago
    Great question! As it applies to new real estate specifically, you have a lot of materials, labor taxes etc to deal with. These are the most common sorts of business debts that I've been exposed to. For existing real estate, I see value of things going up in value largely due to population increase in a certain area combined with the fed printing money (which it claims to do so constantly because the population will always be increasing?). I also see values wildly inflated due to foreign investment. A big issue in general is also due to the banking sector. I think the US government allows banks to go a little crazy with lending to everyone on anything without recourse. That being said, I personally benefit from the system allowing me to borrow money so cheaply. Sorry if this post was a bit disorganized. I have a lot of thoughts on it and it is a great thought experiment. :)

harryh 7y ago

My natural tendencies are definitely in the libertarian/capitalist direction. I think that people should be able to whatever they damn well please with their money. I think that they will get it right more often than not and that when the government steps in to make laws restricting the free exchange of goods/services/money it's almost always a bad idea. But I'm also a personal finance nerd, so eventually I found myself reading https://www.reddit.com/r/personalfinance/ https://www.reddit.com/r/personalfinance/ And then I read different versions of the same story over and over and over again. People with far more credit card debt than they could ever pay off. More than a year's salary worth of debt. People that we just stupid about money, and bought way more stuff than they could afford encouraged all the way by the credit card companies and advertising and keeping up with the Joneses. So now, from time to time, I sometimes find myself wondering if credit cards should just be illegal. Such thoughts are heresy in my own mind, and I don't know how to deal with them really especially because I know that credit cards have been great for me with my 2% cash back and airline points. And I know that they can be great for people who get into a temporary cash crunch and know how to be wise about such things. But then I read another couple of pages of /r/personalfinance and I wonder again. Maybe people do need protecting from themselves. It certainly looks like some of the people posting there do. I find myself very sympathetic to the author's views.

save_ferris 7y ago
There’s a simple solution here that doesn’t require banning credit cards: requiring borrowers to demonstrate ability to pay before signing off on a loan. Most creditors do this, it’s usually only the ethically challenged lenders that ignore this. The previous administration passed regulations requiring payday lenders to verify ability to pay before handing out loans, which was promptly crushed by the current admin at the request of the payday loan lobby. Another solution is to cap the max interest rate far below current thresholds. The problem with these loans is that lenders are hoping you’ll get into debt, they’re in no way trying to create a mutually beneficial relationship with their borrowers.
- lostdog 7y ago
  I'm partial to an even simpler solution: Make it easier to go into bankruptcy, and discharge the loan in bankruptcy. If your debt load is unsustainable, such that your interest payments are more than XX% of your income, then you effectively already are bankrupt. We can either try to get people back on their feet, or let their debtors grind them into the dirt for a while longer.

DoreenMichele 7y ago

So, we don't want to give homeless people jobs because that's uncompassionate. Everyone knows they are charity cases and the only kind thing to do is give them charity, not opportunity. And we don't want to give loans to poor people because that's clearly predatory lending. They would be better off without the option to decide for themselves because everyone knows how stupid they are and how incapable they are if making any kind of decent decision. That's a recipe for a permanent underclass. Opinion of a formerly homeless person who took out a Payday loan to go stay at a dive of a hotel for three nights to escape a deadly storm. My logic: three nights in a hotel was cheaper than replacing my laptop, which I needed to keep earning money. I had no idea how I would eat for the rest of the month and didn't care after walking past a river about six times wider than I had ever seen it and my "safe" campsite for weathering the storm that was currently under probably six to ten feet of water -- before the worst part of the storm rolled in. I just knew I would be in a hotel that night if there was any means whatsoever to arrange it so I wouldn't die that weekend.

randogogogo 7y ago
I think the author of the story aptly addressed this as an all to common justification. The tricky ethical bit isn't whether or not cases like your own do exist, but rather really how many of them are there on the whole?
- DoreenMichele 7y ago
  The more you chip away at the human rights of poor people, the more you succeed in making sure "cases like my own" cannot possibly exist. And that's exactly my point. Your assumption that I'm some weird statistical outlier is exactly the problem. It comes across to me roughly like this: "Oh, Doreen is actually smart or something. But that's the rare exception among the poor. So fuck the rest of 'em!"
  - fzeroracer 7y ago
    The fact of the matter is that things like payday loans exist to exploit the poor and homeless in a way that ensures that they live perpetually in debt. To take your argument to its rational extreme, it would be a bad idea to disallow poor people literally selling themselves to a corporation because that's taking away their basic rights. And this is literally something that happens when you don't put regulations to stop it [1]. The fact that the poor predominately are people who take payday loans which often end up exploitative of their situation should tell you that payday loans might be a bad thing! The norm is that people are not escaping payday loans. Payday loans need to go and we need an actual safety net in place. [1] https://www.theguardian.com/us-news/2015/may/09/us-payday-loans-crisis-borrow-100-to-make-ends-meet-owe-36-times-that-sum https://www.theguardian.com/us-news/2015/may/09/us-payday-lo...

shishy 7y ago

Recently quit working at C1 as well, and share the author's sentiments exactly. Whenever I brought up whether the work we were doing might actually be harmful (even as a general question), coworkers would reflexively quip about what they're doing giving back to the community through outreach, or some other vague response that obfuscated the people behind the problems they were solving. And of course, executives would just spam you with "Change Banking for Good". I couldn't stand it.

d-sc 7y ago
Sounds like cognitive dissonance. Your coworkers felt like they are nice people, but nice people don’t steel from the poor, so their brain didn’t know what to do.

arduanika 7y ago

At last a university bureaucrat comes clean! Oh nvm, it's a Capital One employee. False alarm.

bmer 7y ago
I'm not from the US (Canada), so it sometimes confuses me when people talk about the cost of college. Doesn't the US have public universities? Are they super expensive too?
- orionblastar 7y ago
  Just the books are expensive in the USA but inexpensive in the rest of the world. Tuition has gone up even in public schools. Unless the student finds a good paying job after graduation they will struggle with student loan payments.

anm89 7y ago

This is a nice sounding well intentioned pile of crap. This guy doesn't like the concept of credit cards. That's all this boils down to. Instead of making a detailed structured argument about what he feels the problem is, he tells a couple anecdotes about times credit cards didn't work about for people and about his personal feeling that credit cards aren't that great. Ok fine. But then what's the takeaway? Not that there is any structural problem here or that something needs to change but that credit cards make this guy feel bad. This kind of personal therapy masquerading as systemic or policy critique does nothing but rile people up with vague sentiments and directionless anger. It's a net loss for everybody involved. For the record I'm not some kind of bank apologist, but the fact that there are serious structural problems with the way banks operate in the US makes this sort of infectual critique all the more frustrating

Shaddox 7y ago

Forgive my ignorance on the subject of matter, but aren't these credits so expensive precisely because they're handed to unreliable debtors? There is obviously a need for such a product since it's so popular, but it can't be cheap to manage and collect them especially since they're so small.

Aloha 7y ago

I feel like the person who wrote this has never experienced being poor. I used to be poor, I'd much rather have a credit card than need to rely on payday loans, car title loans, or have no access to emergency money at all. Out of all the issues the poor have, this is a relatively minor one, and frankly articles like this are just another form of virtue signaling. "Oh yes, even though I've never been poor, I obviously know best how poor people should be living their lives, and those expensive credit cards have just got to go..." is how it reads. Yes, borrowers need more protections (rolling back the changes to bankruptcy law from 2002-4 is a good starting point), but that mythical person who couldn't get to work without using their card for car repairs? That was me at one point.

coolgeek 7y ago
I'm disappointed that this is the top rated comment. "than need to rely on payday loans, car title loans, or have no access to emergency money at all" You'll get no argument from anyone but the purveyors of such predatory products. But it's a false dichotomy argument along the lines of "you have to overlook all of the evil things Uber does because they're the only option for people going to poor neighborhoods." The reality is that both of these things are true - credit cards are the best option for emergencies, AND that consumers (not just the poor ones) are encouraged to outspend their means, often finding themselves falling into catastrophic debt spirals. I didn't bother reading the article, so I can't say whether or not its guilty of virtue signalling. But if it does in fact explain how they "Justified Piling Debt on Poor Customers", it's eminently reasonable to overlook any virtue signalling.
- Aloha 7y ago
  My suggestion was to change bankruptcy law so these products are less predatory - the fact that its very very hard for the poor to discharge excessive debt via bankruptcy is a huge issue and traps people in a cycle of poverty. Access to credit, real revolving credit, is a boon to the poor, if you can teach yourself the skills to use it wisely, it can provide that cushion that you otherwise wouldn't have. I literally started over again at 27, with my slate clean by waiting 7 years, then I started fresh with a secured card from C1, and built my credit from there - but at some point about a decade ago, I used one of my cards to put tires on my car, which ensured that I had a functional vehicle to continue to use to work - even though I was not of traditional credit worthiness, that purchase allowed me to keep that job, and gave me the skills to find a far better one later. Yes, some do fall into a perpetuity trap, but we need to fix the system to allow for an escape for that, not just change the system so you cant take any risk at all.

PeterStuer 7y ago

How amoral has your socioeconomic policy become when a credit card with a 27 percent interest rate and a $39 late fee marketed to people whose credit is so bad they can’t get a credit limit without putting down a security deposit is even legal?

RickJWagner 7y ago

I wondered if this piece was from an institute of higher learning.

timwaagh 7y ago

You know, some people's destiny is to teach yoga and make pictures with cute African-looking kids. Other people are destined to optimize financial services so there are cute African-looking kids willing to take pictures with mediocre yoga teachers in the first place. All is balanced in a perfect world.

refurb 7y ago

I have a great credit rating and my interest rate is 25% and late fee is $25. Doesn’t sound like the poor are being offered something that drastically different.

WrtCdEvrydy 7y ago
Halfway through, I realized they were talking about the 'Bullshit Jobs' book in application.