Big Banks

I came across the following question:
Are big banks ethical, or not?

Simple enough question, right? Well, it comes with a simple enough answer: not. Big banks are not ethical. Here's my reasoning:

Merrian-Webster defines ethical as:

1. of or relating to ethics
2. involving or expressing moral approval or disapproval
3. conforming to accepted standards of conduct
4. of a drug: restricted to sale only on a doctor's presription

Admittedly, that last one doesn't really apply here.
Ethics, here, is defined as: the discipline dealing with what is good and bad and with moral duty and obligation. Again, more definitions follow, but these deal with things like work ethic, which isn't what we're looking at. In short, ethical deals with right and wrong.

Let's take a look at right and wrong. Where do we get these ideas? Where do we turn to for a list of rights and wrongs? Let's look at some major religions and philosophies:

Buddhism
"One discerns wrong livelihood as wrong livelihood, and right livelihood as right livelihood. And what is wrong livelihood? Scheming, persuading, hinting, belittling, and charging interest. This is wrong livelihood."
--Siddharta Gautama Buddha in his sermon on the Eightfold Path (Majjhima Nikaya Suttra 117)

Islam
O you who believe, you shall not take interest, compounded over and over. Observe God, that you may succeed.
(Quran 3:130)

Christianity and Judaism
“You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest."
(Deuteronomy 23:19

I know these things get taken out of context way too often, but I think the idea is pretty clear: lending for profit isn't viewed too fondly in most structured schools of thought. On an entirely unrelated sidenote, Scientology doesn't care one way or the other about this. I digress. While lending for profit is not unique to big banks, it is certainly prevalent there. After all, the prompting question dealt with big banks, not banks in general.

Perhaps you think to yourself, "maybe my ethics don't come from some major philosophy or religion." (Another sidenote, free of charge: try to think of just where these ideas do come from. It's not as easy as it sounds.) Maybe you carefully weigh what's best for people, or even society as a whole. Maybe you calculate the effects of each action so meticulously that you can say, for certain, that something is Right or Wrong. Or maybe, it's just a feeling. I feel, on some level that I may not fully understand, that this is Right and that is Wrong. Great. I'd say, as long as you have some sense of right and wrong, and that sense isn't simply self-serving, doesn't put people unnecessarily in harm's way, etc., that's all anyone can really ask for.

So maybe the question is, doesn't this just feel wrong? Doesn't it feel kind of sleazy? Variable interest rates. They're a gamble, to be sure, and, depending on economic trends, one may need to be fairly dumb to jump in. That, or rather desperate. Let's leave dumb alone for a second.

Say you're a single parent, trying to raise a couple of kids. Say your ex decided to walk out, maybe run away with a flight attendant, I don't know. Say that, rather than be some kind of responsible (however loosely this word is being used in this case), said ex now neglects child support. And say that this house that you bought together is no longer something you can afford. You do what you can, as a single parent, to work while your kids are at school (if they're old enough), to do data-entry from home at night, trying to scrape together enough money for food, heat, electricity, and a mortgage. Then there's some unexpected expense: a hospital bill, car breaks down, whatever. You miss a payment. Suddenly, you're behind. And of course, now the ball is rolling. Soon enough, foreclosure looms. Too bad.

These circumstances, while rather severe, are not that unlikely. The flight attendant thing may narrow the scope a bit, but so it goes. Here's where I think the evil of big banks blossoms. In a small bank or credit union, you're an account holder, but you're one of a relatively small pool. You can push for a meeting with someone who has the authority to stay the foreclosure, perhaps, or suspend or restructure the repayment of such-and-such loan, or what have you. In a small enough pool, your voice is more likely to be heard. If you have this meeting and are thrilled with how accommodating this bank was, you spread that word, and this works well for the bank as well. If this goes poorly, negative publicity has more effect as well. In a big bank situation, you may get that meeting, but you just don't matter. Bad publicity, good publicity, you're a number, and not one that's likely to ever be viewed by an actual person. Again, this is true of many large-scale institutions, but it's banks I'm addressing.

Doesn't it just feel wrong, to be so indifferent to someone's desperation? Or worse, to take advantage of it? I see the bind you're in, and can offer you a loan at such-and-such that will, in the short term, allow you to care for your family, but, in the long term, destroy you. Doesn't it feel wrong to take advantage of this sort of desperation? And, while we're at it, it's not so great to take advantage of someone who doesn't know what they're getting themselves into. Targeting young people with little or no experience in these contracts, or old people with little or no means to retaliate, sounds an awful lot like picking off the weak. Is this where we are? Are we right back on animal survival instincts, turning anywhere we can, exploiting who we can, to turn a profit? You know what's more? We allow this to continue.