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Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders

1 rating: 1.0
A movie directed by James D. Scurlock

Author and filmmaker James D. Scurlock takes on the powerful financial industry in an insightful and infuriating documentary about credit card debt in America. As he crisscrosses the United States, Scurlock interviews average Americans whose lives have … see full wiki

Tags: Movies, documentaries, General Interest, Credit Card Debt
Release Date: 2007
MPAA Rating: Unrated
1 review about Maxed Out: Hard Times, Easy Credit and the...

A bit against type for me, but this is not a simple issue

  • Aug 29, 2007
Pros: Does a very good job of making its point

Cons: Not balanced, glides too quickly of complex issues, offers no solutions

The Bottom Line: Talking about Americans and credit cards is like talking to any gambler, oh the stories they could tell.

Plot Details: This opinion reveals minor details about the movie''s plot.

Americans are not encouraged to save in a liquid manner. We are encouraged to invest in a home and through retirement accounts (well some of us fit that last bill). Other than that, the US economy wants each of us as individuals to spend-spend-spend.

Maxed Out, a documentary by auteur James D. Schrulock, examines several problems with regards to credit. He has two foci. The first is the prodigious amounts of so-called easy credit. One of the folks interviewed explained that in 1970, with 2 incomes, they couldn’t get a credit card; however 20 years later, her college student daughter with a miniscule income could get 4. This is obviously a problem. The documentary calls this predatory—I’ll get to that below. The second focus is the payday loan companies who charge phenomenal fees that are intended to get the person trapped in an endless cycle of having to spend more money to pay off the interest which means more loans and more interest in that horrid cycle. Mr. Schrulock explains that many of these places are owned by large banks. This is called predatory. I guess it is time to get to that.

Before I get to it, however, it is worth mentioning that identity theft isn’t covered at all despite this being an issue during the time covered by the documentary. Further, the film gives attention to the fact that many credit reports contain at least one datum of false information, and that it is difficult to change, it stops there—no larger amount of time is given to this topic.

I am going to sound completely against type for anyone familiar with most of my essays on this site, but only for a couple of paragraphs. The vast majority of people interviewed had options before they did anything financially threatening with credit cards. For the people who had been of means before would not be in a situation where they were going to lose their house if they had called the bank and tried to work something out. A bank, even a crappy one, would prefer you pay something rather than foreclose because they would almost certainly take a loss there where they wouldn’t necessarily do the same if some kind of payment was made. If you have a problem that is going to make paying bills hard, then call the owners of the debt and work something out rather than get more credit cards. If you are already in a debt ocean where you can barely keep your nose up, why pick up more rocks thinking they would bring you to the top? I have sympathy for the people I’m lambasting but sympathy can only go so far when there were many options before going deeper and deeper into debt.

Now back to my normal self. There were a few people who were certainly taken advantage of by lenders that were no better than landowners or mine-owners creating de facto slavery by making the workers owe most of their income to the landowner or company store. This has gone on for as long as there have been poor and disadvantaged. This sucks terribly, but I don’t think any level of legislation would stop it. One loophole or another would allow another form of that sort of lender to pop up. Rather than push for an unlikely legislative action, money would be better spent on community education. This is not an easy task, but it would be well spent effort.

The documentary covered the passage of the bill that made it harder for middle and lower income Americans to file for bankruptcy. I was entirely, and remain, against this law. The reason is that it was, no surprise for Washington, sold incorrectly. Remember Reagan’s comment about so-called “Welfare queens?” A very few people took advantage of a situation to gain a level of wealth beyond what Welfare was designed for and far more than was their share. Because a few people abuse something doesn’t mean it should be taken away from all. CEOs spend beyond their and their company’s means regularly yet the banks don’t cut off the credit nor are other companies denied credit when Enron, WorldCom, Tyco, Healthsouth and so on default and declare bankruptcy. Yes Welfare is federal. But think about this: what is the affect on the economy when companies the size of Enron and WorldCom fail? Investors take a huge hit so they have less money to spend and invest. Former employees have to take jobs often paying significantly less than what they made before (less tax revenue) and the supporting infrastructure of stores and other businesses around these massive companies also lose money or have to close down. Local economies all the way up to the federal economy suffer. So, why should lenders to large companies be allowed to continue when the impact to every economy touched by a failure is so great? Welfare queens or Corporate Welfare queens, neither are common but one helps dismantling a federal system while the other keeps going no matter what.

According to non-partisan figures given at the time, two-thirds of bankruptcies in the country were filed not because people overspent but because there was a medical emergency either not covered by insurance or because there was no insurance in the first place. There was an amendment (more than one if memory serves) for a medical exception to the rule. This would have exempted those who were good with credit but who had something crippling and unforeseen (unforeseeable?) happen to them or a family member. I didn’t support this bill because there was no exception given to people who were not, in fact, taking advantage of anything. Instead of focusing only on the ones who were, in fact, purposely racking up debt with no intention to pay because they could use bankruptcy as an eraser of sorts, the bill covers everyone.

Here are the film’s failings. They left this medical issue out entirely. It must also be noted that this isn’t at all balanced. This is fine, so long as everyone going in knows that. There is enough information in the majority of the film to make anyone angry for any number of reasons; however, the film gave no indication of what to do other than just not spend money on plastic, and even that is just implied. I didn’t hate the film, I just think that things were glossed over or left out either because they were against the hypothesis or because they were too complicated for the 90 minutes allotted.


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