We've 'truth in lending'-- How about 'truth in borrowing'?

Ronald Blum

November 05, 1991|By Ronald Blum

I RECENTLY had occasion to apply unto a bank for a mortgage, and the experience put me in mind of poet Ogden Nash's deathless lines:

L They look at you like Tarzan at an uppity ape in the jungle,

And tell you to go get it from your rich aunt or ungle.

It was not the warmest encounter of my life, and after enduring the bank's pecuniary paranoia, I thought: We have "truth in lending" laws.Perhaps we also need "truth in borrowing" laws. I mean, when a bank borrows money from me by taking my deposits, I think I should have a right to know who gets it and what for.

After all, when I borrow, I am investigated from top to bottom, up, down, and sideways. If I were ever overdue on a credit card or mortgage payment in the past 20 years, they know -- and they want to know why.

So I want to know if I am entrusting my savings to another American, someone who can be tracked down if he does a bunk and lights out for parts unknown with my life savings. Someone whose house and car, wife and kids, can be attached until I get my money back. Or am I bestowing my worldly weal upon the Absconders & Defaulters Cartel, managed by shadowy figures who can melt in a trice into the mysterious souks and bazaars of the Orient or the teeming cities of the Asian-Pacific littoral?

Why should I not be told into whose hands I am consigning my life savings, my physical and emotional well-being and the future of my family?

If the CEO of my bank is a penguin from Antarctica, I want to know where he was hatched, his citizenship and if he can fly. If he represents a foreign bank, I should have the right to know what fixed real assests it has in the United States, whether it is maintaining a reserve of frozen herring on some ice floe in the Weddell Sea and if it falls within the jurisdiction of a friendly country with responsible banking laws.

Banks, despite their pose as beyond frailty and reproof, are no less human than their owners and executives. I want to know who these people are, because the integrity of the system is too important to me and mine to be taken on faith.

I want to know whether my bank is made in the U.S.A., and who is minding the store. I do not want to find out too late that 80 percent of the board of directors served with distinction in World War II, flying Messerschmitts.

Manufactured goods are stamped, "Made in ." Similarly, every major banking executive should have or his or her citizenship stamped on his or her bottom.

The banking industry is the great heart pumping the life blood of our economic system, underpinning our democracy and free-enterprise philosophy, which is currently enjoying such a sentimental revival in the Soviet Union. It is unwise to allow great chunks of bankdom to fall into the hands of foreign nationals with no personal stake in our country, except as a cash cow to be milked.

If our government has not the resolve to properly regulate foreign banking interests in the United States, we should at least require that their ownership be divulged to the American people, who can make their own choices. It would also give foreign-owned banks an incentive to be cleaner than clean, in order to maintain their very lucrative positions in our economy, still the world's greatest.

In these days of shaky financial structures, depositors need more protection than ever. At least give our citizens the information to select their risks themselves.

Such a program to protect the public could hardly be objected to by free-trade pundits. Anyway, not by those who had money with BCCI.

Ronald Blum teaches physics at Towson State University.

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