Very interesting news over the weekend about how our esteemed govt is tightening laws on protests to prevent any harm to our society. Although countries like S. Korea, Malaysia and many around the world have allowed protests without seeing any violence, Singapore has chosen to pre-emptively enact laws because our extraordinary govt is extremely concerned about our well being. It is because our govt is so extraordinary in caring for us that I urge them to do something for the ordinary people of Singapore - something they might have forgotten....it is time to stop predatory lending!
If you're familiar with the work of Harvard Professor Elizabeth Warren (she does very interesting work look her up on the web), allowing banks to charge beyond 20% in credit card interest rates will lead to something known as predatory lending. Banks will be willind to lend to people who will struggle to pay and will impose hefty fees for late payments. This will eventually lead to a debt trap in which a large number of people in the population struggle to service their loan. The harm to society is great....yet our govt is more concerned about imposing laws to repress protests because it hurts them politically instead doing what is good for Singaporeans. Rollover credit card debt has increased to record levels as Singaporeans borrow to cover their household expenses in this recession. Our banks have learnt "American style" predatory banking by imposing all sorts of fees, charges etc on unsecured loan causing fees, interest, charges to go up to near 30% per annum.
The Malaysian govt and many around the world have recognised this harmful trend 3 years ago and has limited interest chargeable to 15% [Link]. Studies have shown that at around this level predatory lending can be curbed. Predatory lending has caused plenty of harm to people, society and economies (just look at what happened in US, UK) yet nothing has been done about it in Singapore. However, every single major positive transformation in society (women's rights, racial equality, etc) has been brought about by protests yet the PAP govt introduces more laws to curb it. They tell us it is for our own good to prevent social disorder.....but we know why they did it. 3-4 powerless protestors caused plenty of embarassment to the PAP when the IMF & World Bank came here a year ago and that was enough for them to introduce new legislation ahead of the APAC meeting ...yet for the hundreds of thousands of Singaporeans struggling as a result of predatory lending nothing is done. The Malaysian govt may be accused of corruption, cronyism, and incompetence but even when they lost elections, they never resorted to curbing protests...and whatever it is, they got these 2 things done right.
Over the weekend I met up with quite a few friends and the lack of sympathy for MP Seng was quite shocking even for me. I believe nobody deserved the harm done to MP Seng-his family must be in great pain. I wish his family well. The lack of sympathy among Singaporeans reflects a shift that has taken place in our society that makes the words of our PM ring hollow among Singaporeans - "Staying together, moving ahead", "We are in this together"....never has the govt and the people drifted further apart. Some people are saying why should there be sympathy for the MP when there was none when Singaporeans who couldn't afford their bill had the electricity cut off, struggling famillies are asked to pay for neverending price hikes imposed by govt bodies and govt linked companies. The lack of sympathy goes both ways.
Today, I was greeted by this big Straits Times headline "Govt MAY tap reserves" about the govt dipping into reserves to limit the downside for the economy 1 or 2...maybe $5 billion. It talks about the govt needing to be VERY VERY careful to dip into reserves to help Singaporeans. I was wondering why we even bother to debate this when we had no debates about giving tens of billions to trouble western banks and losing a substantial part of our reserves on risky investments .....why they are so disproportionately careful when it comes to helping Singaporeans when they can just dump billions into those Western banks and Shin Corp without any check and balance. There is an urgent need for reform here and it will never come as long as the PAP maintain this elitist system ...the GIC and Temasek is a source of high paying jobs for many of these elites and our leaders will try to preserve the lack of accountability and transparency to serve their own interests.
Look at credit-card interest rates
MOST credit-card companies charge 2 per cent on rollover balance on a daily basis, if card holders do not pay the full amount on due date.
One intriguing piece of legislation I wish to draw attention to is the Moneylenders' Act.
The Act was passed to protect common people from unscrupulous moneylenders or loan sharks. The maximum interest rate a legal moneylender can charge a borrower on an unsecured loan is 18 per cent. And for only $1, the debtor can request a statement of his loan.
It is not the same with credit-card companies. Card holders have to pay a higher fee to print an old statement, if they lose their copy.
Credit-card companies also make a spread if card holders buy goods in foreign currencies. That spread is not favourable to card holders compared to the over-counter rate.
While moneylenders and credit-card companies are different service providers, they both primarily provide a credit service to the public. Of course, one difference of credit cards is that they are also convenient to use.
I applaud the recent decision by lawmakers in the United States to scrutinise credit-card companies on their interest rate charging practices.
Singapore lawmakers should also look at how credit-card companies charge their customers for card usage and the maximum interest payable. That goes for unsecured lines of credit.
Do remember to look closely at the fine-print terms and conditions on your credit cards and lines of credit. You may be in for a shock if you forget to pay on time.