If it just causes banks to not extend consumer debt to poor people then at the risk of sounding like Daddy Knows Best it might not be such a bad thing. Keep in

If it just causes banks to not extend consumer debt to poor people then at the risk of sounding like Daddy Knows Best it might not be such a bad thing. Keep in mind these are small debts. Not like a home loan (ignoring the edge case of the person who paid off 95% of their home loan but can't pay off the last couple of thousand dollars). If it's just credit card debt left over from a plasma TV purchase then once-bitten-twice-shy banks not extending these kind of loans to the poor any more could force the poor to save money required before making a purchase in future. Having said that, I'm thinking out loud here and not convinced of it myself. Mainly because whenever the government steps in like this it means that someone somewhere is getting screwed. Agree that the free (black) market will move to fill the gap.