• scoobford
    link
    fedilink
    arrow-up
    4
    ·
    9 months ago

    Oh, if you’re trying to prevent usury, it would be far simpler to either cap interest rates or ban compound interest in favor of simple interest.

    Rate caps are the simplest solution least likely to backfire, but unfortunately they tend to push people away from legitimate sources of lending, so you do have to be careful that they aren’t too low.

    Like I said, forming a corporation isn’t a simple thing, doing it to organize a personal loan would take up an enormous amount of time and money, and result in substantially fewer consumer protections.

    • Hamartiogonic@sopuli.xyz
      link
      fedilink
      arrow-up
      1
      ·
      9 months ago

      Well, now that taking a loan is fast and easy, people tend to spend the money they don’t have and buy the things they can’t afford. Having some sort of a speed bump along the way should make people think a little more and avoid getting into unnecessary debt.

      • scoobford
        link
        fedilink
        arrow-up
        2
        ·
        9 months ago

        I agree, but forming a corp is time consuming in an expensive way, you need (usually) retain lawyers and an accounting firm.

        I think it would be better if getting credit were subject to income and asset verification, and most importantly that the government make sure eligibility verification is not abusive, discriminatory, or inconsistent in nature.

    • FfaerieOxide@kbin.social
      link
      fedilink
      arrow-up
      1
      ·
      9 months ago

      if you’re trying to prevent usury

      Muslims got you.

      Anyone’s guess if it works, but they’ve been doing the complicated “riba bad” maths for a while now.

      • scoobford
        link
        fedilink
        arrow-up
        2
        ·
        9 months ago

        I have some professional awareness of Islamic banking. It kind of works, but it’s definitely a kludge to make modern-ish finance possible without violating religious law.