The Two-Income Trap - Elizabeth Warren [125]
8 By 1997, the outstanding home equity debt of American homeowners had reached one-third the size of total nonmortgage consumer debt. Glenn B. Canner, Thomas A. Durkin, and Charles A. Luckett, “Recent Developments in Home Equity Lending,” Federal Reserve Bulletin 74 (April 1998), pp. 242, 248.
9 Eric Gillin, “Events Conspire Against Bankruptcy Reform,” in The Street.com, January 10, 2002. Available at http://www.thestreet.com/markets/ericgillin/10006456.html [3/2/2003].
10 Among first-time home buyers a generation ago, 70.9 percent reported that their down payments came entirely from savings, and 20.4 percent said they also had help from relatives. U.S. Bureau of the Census, Data User Services Division, Statistical Abstract of the United States 1982-83, 103rd ed. National Data Book and Guide to Sources, compiled by Glenn W. King under the direction of Paul T. Zeisset (Washington, DC, 1982), p. 762, Table 1367, Recent Home Buyers—General Characteristics and Downpayments, 1976 to 1981.
11 Chris Pummer, “GOP in Danger of Misreading Election ‘Mandate’,” in CBS-Marketwatch. com, November 6, 2002.
12 See, e.g., Kathleen C. Engel and Patricia A. McCoy, “A Tale of Three Markets: The Law and Economics of Predatory Lending,” Texas Law Review 80 (May 2002): 1255, 1271-1279, in which the authors describe the mortgage market of the 1970s as a limited steady business, not aimed toward attracting high-risk borrowers.
13 Diane Ellis, “The Effect of Consumer Interest Rate Deregulation on Credit Card Volumes, Charge-Offs, and the Personal Bankruptcy Rate,” Bank Trends, no. 98-05 (March 1998). Available at http://www.fdic.gov/bank/analytical/bank/bt_9805.html [3/3/2003]. See also Christopher C. DeMuth, “The Case Against Credit Card Interest Rate Regulation,” Yale Journal on Regulation (Spring 1986): 200-244.
14 The Supreme Court ruling in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation in 1978 allowed a Nebraska bank to export credit card rates to Minnesota. 439 U.S. 299 (1978). The federal government approved this reinterpretation of the McFadden Act in 1983. Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), U.S. Code, vol. 12, sec. 1831d (1994).
15 In the late 1970s, the usury cap in New York was 18 percent on the first $500 and 12 percent for loans above that amount. Robert D. Manning, Credit Card Nation: The Consequences of America’s Addiction to Credit (New York: Basic Books, 2000), p. 88. For a review of the calculations behind and evolution of New York’s usury statute, see New York, General Obligations Law, Compiled (Bender 2002), sec. 5-501.
16 Manning, Credit Card Nation, p. 94.
17 For example, Citibank moved its credit card headquarters from New York to South Dakota in 1981. Manning, Credit Card Nation, p. 89.
18 Credit card delinquencies were at or below 3 percent for most of the early 1980s, compared with more than 4 percent in 2001 and 2002. “Delinquency Tumbles,” in Cardweb.com, September 30, 2002. Available at http://www.cardweb.com/cardtrak/2002/september.html [2/12/2003]. Even as delinquencies climbed, credit card lending has remained about twice as profitable as other forms of lending. The Profitability of Credit Card Operations of Depository Institutions, Annual Report submitted to Congress (2002). For longer-term profitability trends, see Lawrence M. Ausubel, “Credit Card Defaults, Credit Card Profits, and Bankruptcy,” American Bankruptcy Law Journal 71 (Spring 1997): 258-260.
19 Calculation