The word responsible seems to get used to convey different meanings: blame and duty being the two big ones. It also gets used to say a reaction, which isn’t a responsible one if the person reacting is ignoring their involvement in whatever they are reacting to.
Does that make sense?
I got taught that responsibility means being able to respond and ability to take a response. So what went on with the lending sector?
It seems, before 2008, for a while people could get 100% mortgages and lending rates were ridiculous, i.e. the 1% mortgage, anything to shift that money. I worked on Financial Adviser magazines at the time.
Recently I applied for a mortgage to buy a house. Firstly, to comply with government regulations to prevent money laundering, I had to have my name on the deeds of the property I wanted to remortgage for 6 months. Fair enough. What about a mortgage? I’ve got enough coming in to pay for it.
The IFA said that a few years ago, it would have been no problem me getting a mortgage. However because unscrupulous lenders were giving them out without care if these people could pay them back (therein lies responsibility), now there were all sorts of criteria to stop this happening.
What they’ve stopped happening is people who are responsible and able to make their payments (that is a responsibility – in the duty sense of the word – of the borrower) being able to prove this and take out a mortgage.
So, because lenders gave out money without taking responsibility – the response here being payments made – lives have been ruined, families have had their homes repossessed, then the banks crashed and the government bailed them out with taxpayers money.
You’d then think someone would come in with a strategy to prevent this happening again and to rebuild the economy, wouldn’t you? How many economists are there in politics? Most of them did economics as part of their degree at Oxford, so where’s the strategy?
A few years ago, I applied for a new credit card from Natwest. I got a letter back saying ‘due to reasons of banking responsibility, we have declined your application for a credit card.’
That is such an innocuous sentence: ‘due to reasons of banking responsibility’. Is banking responsibility the reason? Have I been given reasons? I’m not sure. Could I get to hear those reasons? I doubt there are any.
Are there reasons for Natwest to believe it would be irresponsible to let me have a credit card because it has been shown I run up debt and don’t pay my bills? Absolutely not.
Therefore, a lender that has given out too much money without using a system to decide who can make their payments on time RESPONDS by not letting someone who has never been late paying a single bill in their life take out a credit card? Hang on. (*&%$£@^&*)
The recession or credit crunch has continued now unabated for 5 years. The government bailed the banks out and the banks and the government have turned around put all the responsibility for their own actions onto the public. We now have to show three months of payslips to get a mortgage or THREE YEARS of profitable self employment on tax returns.
What about if banks showed similar evidence that they are going to be able to honour pensions or, unlike Northern Rock and other financial institutions, not go bust on customers? If I borrow from you, for reasons of responsible borrowing I want to see evidence that you aren’t going to start lending recklessly if there is another economic boom and then go bust when there’s another crash?
What happens to people who can’t get mortgages? One friend of mine [inserting her story here] couldn’t borrow so ended up spending all her capital for a deposit in renting.
If banks and lenders want to know about responsibility, they should find out how a borrower is planning on being responsible about making their payments. The last few years have shown anyone can lose their job. However, funnily enough, rental income is disregarded when showing how much income you have to a borrower. Most tenants sign a year, 18 month or 2 year rental of a property, but who gets a guarantee like that for a full time fully paid job?
If lenders were being responsible they would:
* Put their hands up and say THEY lent money which they couldn’t recoup and caused a debt problem.
* THEY put lives at risk and let people who weren’t stable enough financially to face rack and ruin because they believed if they were lent money, they could pay it back. Historically it is difficult to borrow so suddenly being given wods of cash is going to suggest trust from the lender.
* THEY didn’t have the right system to identify people who can pay, despite the technological world we live in, which could let someone prove that they have enough income to make their payments. They’ve obviously got enough money to rent, which can often amount to more.
* THEY have now let the government make policies which tie their hands, with regulations to ensure very careful (much more suitable word than responsible) even to people who can obviously pay because of THEIR actions.
What we have now is Austerity ‘N’ Anal Lending (ANAL). Except the people who caused all the problems have lumped all the onus on clearing up their mess onto the people who had no control over the situation: the public. What are governments and organisations for, if it is not to govern and organise. These guys couldn’t even organise a bank robbery in their own bank. Even though ironically that’s exactly what they do.