Prime Minister Perry Christie
By KHRISNA VIRGIL
Tribune Staff Reporter
kvirgil@tribunemedia.net
PRIME Minister Perry Christie yesterday chastised lending institutions for breeding a culture of “modern day economic slaves”.
Mr Christie further accused those institutions of “cajoling and sweet talking” customers to sign on to personal loans for things that they cannot afford.
The prime minister said banks and other lending institutions were getting richer by imposing excessive interest rates on customers driven by a high volume of employees with salary deductions.
To combat this, Mr Christie appealed to bank executives to work with the government to bring a new Consumer Lending Act to Parliament. He said successive administrations had failed to pass the legislation, despite promising to do so.
He was speaking during the Royal Fidelity Bahamas Economic Outlook Conference in the Crown Ball Room at the Atlantis Resort.
“We are now in an age of growing economic slavery,” Mr Christie said, “driven by excessive unmanageable personal debt. There is simply too much personal debt that is being taken on by too many people in our country.
“We need to break out of that because it can’t go on much longer like this.”
“Banks and other lending institutions are getting richer, particularly with the excessive interest rates that are being charged by some. It is turning too many people in our country into, what I characterise while I am making the point, into modern day slaves.”
He added: “Indeed with the prevalence of salary deductions you have a whole bunch of folks who are taking home literally just a few dollars every month, hardly enough to feed their families, to keep the lights on and keep the water running. The rest of what they earn is going towards personal debt service.”
Mr Christie said he was disappointed that banks would not support young entrepreneurs, but choose to lend money for vacations and furniture among other things.
“You can borrow money for a car or fridge or stove or furniture. But you can’t borrow a dollar if you are a young entrepreneur with a small idea who has a solid business plan to start a new venture that will end up hiring people.
“Today we have people taking out loans for vacations that they will end up taking seven years to pay back or taking out loans for large weddings or for cars that they really don’t need to change right now. They are taking out loans for this and loans for that.
“They are piling up these loans and piling up their credit cards and pay at 18, 20 or 22 per interest and whatever other charges that might exist.”
Mr Christie insisted that there is now a compelling urgency to address this issue. He said the amount of salary deductions for loans should be limited.
He added that banks and lending institutions should also take steps to encourage saving with a view to lessening the appetite for personal debt. Mr Christie encouraged banks to lead the way in refraining from charging excessive interest rates.
Comments
GBQ949 9 years, 2 months ago
this is the most admirable thing i heard Mr. Christie say all year. You go PM
GrassRoot 9 years, 2 months ago
Perry don't wish for it. you are giving away our future and the one of our kids by begging the Chinese to give you money. You think this is free? Who is going to pay those interest rates? our kids that dont get a good education in exchange for it? You are aiming at the wrong target when you go after the banks. This is just a cheesy and cheap PR stunt to steer the banks into your uneconomic idea of a mortgage relief plan.
KM 9 years, 2 months ago
I know right, who is this man trying to fool ?
Economist 9 years, 2 months ago
If we had no Exchange Control and were allowed to borrow in US dollars we would not be having this problem. The banks would then have to lend at 4% and 5%.
So PM, you are the Minister of Finance, you have the power to abolish Exchange Control and let Bahamians borrow in US dollars.
Free us please!
GrassRoot 9 years, 2 months ago
100% agree and put away with the BSD. It will protect our savings from getting devalued at one day in the near future. It works in Ecuador and Panama just fine.
spoitier 9 years, 2 months ago
100% agree, and also if you believe the banks are getting away with predatory lending then put a max on what a bank can charge.
TheMadHatter 9 years, 2 months ago
Economist - wow looks like this is something we can agree on. Yes, we should abolish our dollar and use US, like Grassroot says they do in Panama etc.
The PM does not need a new Act of Parliament to limit salary deductions of Government employees. I knew of a lady in the Ministry I worked at for 4 years whose take home pay monthly was $14 (yes fourteen). These are all approved internally. The banks as for a letter of salary assignment. The Ministry of FInance can make their own policy and simply say from today forward no employee shall get a salary assignment letter if such assignement would take their total assignments to be more than 25% of their salary. Their take home pay must be 75% of their salary. They could do it with one stroke of a pen.
However, here they are playing innocent. Christie is the Minister of Finance (in his spare time from being PM). He could do it in ONE DAY.
Also - what does he mean 22%? The Bank Act limits any loan interest including fees and any other names that banks want to call charges to a TOTAL of 20% per annum on the principal.
Anyone finding that they are paying more than 20% on a loan (or I should say being charged interest and fees totalling more than that) should telephone the police.
TheMadHatter
Well_mudda_take_sic 9 years, 2 months ago
Christie has the most forked tongue of just about any politician on our planet today. If he truly believed many Bahamians are "modern day economic slaves" he never would have introduced the highly regressive VAT that so grossly and disproportionately fleeces poorer Bahamians of what few dollars they may have left at the end of each work week (assuming they even have a job!). This demon Christie has the gall to ask the banks in our country to give poor Bahamians a break while his government is taxing middle and lower class Bahamians to death! Christie is a blithering ugly looking oaf of an idiot!!!!
realfreethinker 9 years, 2 months ago
Wow when will he go away. Please. The government has done more to screw us than all banks and lending institution combined. Is there nothing we can do to make him vanish POOF
chairarranger 9 years, 2 months ago
If a household borrows (or has in the past borrowed) to buy things they cannot really afford, the only way out of the debt spiral is to generate more income now to pay for the excessive (and often, on reflection, unwise) spending decisions of the past.
Maybe it was your ex-wife, long since departed, with a penchant for Gucci handbags; perhaps it was a "necessity" for the kids growing up like education costs, a new roof, or that "essential" overseas vacation to Disneyland; or perhaps it was just the dizziness of imagined wealth and the desire to prove something to somebody, to follow a fashion trend or to "keep up" with the next door neighbors or a more prosperous sibling. Either way, you have a debt in your household and you need to pay it back so the kids aren't lumped with it or, worse still, the lender forecloses, calls in your debt in full, or sells the debt to another less scrupulous lender.
Now re-read all of the first paragraph replacing the word "household" with "government".
We have a $6 billion national debt. There is approximately 380,000 of us who are ultimately responsible for it. Its really no different to a national "mortgage" or an enormous credit card bill racked up by someone in our household. Its time to begin paying it back.
There is massive irony in both the Prime Minister chastizing moneylenders and members of the community complaining about VAT, duties and other revenue collecting by government to pay back decades of grossly irresponsible borrowing by a nation addicted to credit. The only way a government can "earn more income now" is to raise revenue through tax. And unfortunately that's the bitter pill we now need to swallow instead of expecting someone else to deal with it. We need to live within our means, by demanding balanced government budgets, and cut up the national credit card, via a comprehensive Fiscal Responsibility Act, instead of whining and buck-passing.
CDMortimer 9 years, 2 months ago
Amen! The problem is not solely the Banks' "indiscriminate-manner of lending" or their lending-principles; it's a combination--the other contributor being the Government's deficiencies to inject or foster any economic growth for the average-Bahamian. "Average-Bahamian", being the masses, that don't have the $ 3,000.00+/mnth salary, that live and are expected to survive pay check-to-pay check. Concessions have to be made to assist the middle-lower/poor classes, although the $ 3,000.00+ salary few, believes that concession shouldn't be...because to them the masses should learn how to budget and save.
BUDGET and SAVE darn WHAT?
Not enough is made to budget nor save, so what are they to do...continue to suffer, whilst you stand aside and scorn and look-down upon them. They're not what's wrong with nor making this country what it is now....the neglect by all in power is!
Economist 9 years, 2 months ago
The PM has the power to keep us slaves or set us free. Let's see what he really wants.
duppyVAT 9 years, 2 months ago
Perry is right on this one though ............. Bahamians have to stop supporting these foreign based banks and become members of their local credit unions where they can become OWNERS instead of SLAVES in the economy.
Will the politicians ever support their own or continue to suck up to the foreigners??????
Perry need to say "Take your money out of the banks and put it in the credit unions" But then again, the average Bahamian doesnt have $1000 in the bank........... and the rich Bahamians will never support "local" banking institutions................. so we remain in the catch22
GrassRoot 9 years, 2 months ago
ha seems the Bahamian owned banking model didn't work that well neither, ey?
duppyVAT 9 years, 2 months ago
Credit unions are not banks ................... banks exploit, credit unions empower
ohdrap4 9 years, 2 months ago
the credeit unions empower their own directors.
take your money from foreign banks and put in the bank of the bahamas so they can ngive it away to politicians.
TalRussell 9 years, 2 months ago
Comrades, once you know how government payroll "secured" deductions and loan sharks work together, you'll know how and why you want to do anything you can to avoid them and what they can do to your government employee public treasury "secured" paychecks. I'm sorry PM Christie but how could you not know you are being disingenuous, because it is YOU who heads a government that continues a policy, fostering a culture that attracts sub prime lenders, only more than eager to line up to lend exclusively to "secured paychecks" government employees. Lenders of all shades only too eager get their hands on the government's "secured paychecks" payroll deductions, more often than not to finance over priced items and interest charges for anything from houses, cars, furniture, electronics, vacations, small loans, appliances to funerals and debt consolations. In truth it can be said, the government's policy of allowing payroll deductions, makes them a "willing collector for loan sharks" in disguise. PM, you must know you can order a stop today to be put to this rip-off, that will continue to bury deep in debt, even more generations of government "secured paychecks" employees. PM, today with a simple directive from the PM's office, YOU can protect the next generation of government "secured" paychecks employees, by TODAY issuing a prime ministerial directive, that from this day forth, there will be NO new "secured paychecks" payroll deductions ....period.
by TalRussell
DonAnthony 9 years, 2 months ago
Well said, and I agree with your comment completely. Just to add, a govt study was done prior to the implementation of vat, and found that for civil servants after salary deductions their take home pay was only 30% of their original salary. Truly frightening and sad.
IslandTransPlant 9 years, 2 months ago
This guy is a dumb ass between him and Ingram they have set the Bahamas so far back that you guys will spend years trying climb out of the whole that they created with that being said it's painful to say this but the voting public Also has a hand in this fight you guys for the last twenty years have only elected these two guys that's still stuck in the 19th country and have not done anything to help the Bahamian people the only thing that they have done is line there pockets and sold out the future of the people.
Economist 9 years, 2 months ago
The Central Bank of The Bahamas regulates the banks. The banks are licensed by the Central Bank. The Central Bank issues guidelines on what banks may and may not do.
The Central Bank monitors the interest rates, the total amounts of loans and deposits etc.
The Central Bank has played its part in allowing the interest rates to be this high.
The Central Bank comes under the Prime Minister.
Sickened 9 years, 2 months ago
I have to correct you... nothing comes under Perry... everything goes over his head!!!
TalRussell 9 years, 2 months ago
Comrades when the PM orders an "independent audit" on the rate of interest charged to loans extended to government employees, provided they agreed to the secured' payroll deductions loan conditions, only then will I begin take him seriously. I am told a great number of government workers have maxed-out completely the limit allowed on the repayment of payments, they have obligated their "secured" paychecks against. And, the PM and every member of his PLP cabinet knows its reached alarming levels.
The_Oracle 9 years, 2 months ago
Best to take a look in a mirror, Before starting a witch hunt!
DEDDIE 9 years, 2 months ago
The problem is that the Bahamas Central Bank is totally ignorant of monetary policy. The Federal Reserve in the United States have adjusted interest rates thousands of times to control the economy as compared to the Central Bank which have done it less than 30 time from its inception.Drop the discount rate and the mortgage rate falls automatically. The Government and its agent the Central Bank are culpable in the slavery mentioned by the PM.
ThisIsOurs 9 years, 2 months ago
Is he referring to the gambling boys?
Economist 9 years, 2 months ago
Main point is..."Prime Minister, you have the power to fix this."
PM, are you going to free us, or leave us as slaves? We are in your hands.
stoner 7 years, 3 months ago
It is going to get worst not much Better. The Central Bank has the power and does nothing to control the borrowing for the locals.The crime and poor among the locals are getting out of control and has been since 1972.Your country kicked most of the expats and a lot of the British out after independence and thought you could run a Country on your own. The majority could run an outhouse let known a Govt. Education is needed and not what is thought in schools in the Bahamas. It is just basic education with grade X1 in Nassau equal to a grade four or five in most industrial countries.You have up grade the education system and not with the present day programs.Education is also part of family planning. There were cases where six of my employees under the age of twenty had two kids each and did not no who the father was and had no support while their Mom looked after the kids. What a life??Education early and enforced by Govt and the Family planning dept in Govt if their is one. Otherwise ,it will get worst and not better.A suggestion to have your tubes tied is not the way to go.Planning and education of family s for the Govt to education right at the beginning.
Sign in to comment
Or login with:
OpenID