UNRESTRAINED BANKING IN BELIZE & THE PUP RESPONSE
Banking in the USA found a loophole in which they could turn into mafia style loan sharking. This was the Equity Loan system based on the equity, or payments of principal you had made on your mortgage. Unfortunately, such loans were not restrained by legislated mortgage rates, but were used more as Credit Card type loans with exorbitant fees, charges and interest rates.
Many states in the USA are now outlawing these type loans, or passing laws to restrict them. You change the name on the loan and find a new wayof approach and for some years, there are no legal restraints on how much money you can extort. In the USA this developed into "a steal your house and property" scam. You ended up paying exorbitant fees, charges and interest rates, so that you actually could owe more than the original loan in two years, and the whole value of the property in five years time, because of various fees, charges and interest charged on interest.
In Colombia, the situation also has gotten out of hand, with millions of people being thrown out on the street, from homes they once owned, because they took out a Home Equity Loan. Interest rates got so bad, they were as high as 70% with no controlling government legislation. The banks are literally stealing peoples houses, if they are so foolish as to take out a loan with their home as security.
In Belize, this type of affair was not tackled by government legislation either. The politicians and bureaucrats are notoriously stupid when it comes to banking systems. Nor do they want to learn, the figures and knowledge of finance makes their minds spin in turmoil. What the PUP did in Belize, is adopt a different method to making legislation. They run the mortgage home business through the Development Finance Corporation and thus take away the banking mortgage business. They are also creating all kinds of alternative loan sytems, like Farmers Lending Organizations and lending money to expand Credit Union cash for loans from the Social Security Board Trust. While all these things are good, they are not the solution to reining in the local banks that operate in Belize and exploit the local market for foreign exchange profit export. Sometime, the PUP are going to have to tackle banking legislation on a continuing basis. As fast as they make interest rate controls, the banks will find alternatives. It is a continuing battle. But if you can control the price of a local fisherman's catch of fish, or the price of a can of milk, or the price of bread, surely the PUP can control interest rates and fees and charges that the local BANKS are socking customers with in a flurry of exploitive profit mongering.
From the Reporter newspaper, Sunday, September 10, 2000
In response to a public outcry, the Social Security Board has released information about its investment portfolio, which today has a value of 172 million dollars.
The largest chunks of these investments have gone into housing (nearly $60 million), utilities -telephone and electricity second in line with $47 million, and agriculture a distant third with $17.4 million.
With an interest spread varying widely from 8 1/2 percent to 12 percent, the investments range from good to poor, with roughly 5 percent unrecoverable.
The following chart shows how the moneys are invested and in what amounts.
Mortgage loans $26,749,609.99 BTh Shares 25,972,209.42 Development Finance Corp. 25,122,990.64 Belize Electricity Limited 16,600,762.50 Real Estate Investments 8,737,244.46 Citrus Growers Association 8,800,000.00 Banana Growers Association 6,000,000.00 Belize Electric Company 4,680,000.00 Belize Airport Authonty 4,235,225.25 Belize Hotels Development 2,775,886,68 St. John's Credit Union 2,591,568.84 National Dcv. Foundation 2,577,974.76 Toledo Fish Farming Co. 2,000,000.00 DFC Student Loans 1,608,479.77 St. Francis Xavier Credit Union 1,464,891.80 Mayaland Enterprises 1,462,300.00 Belize Odyssey Limited 1,461,144.86 St. Martin's Credit Union 1,197,691.12 St. James Building Society 1,156,617.74 Belize Investment Management 985,641.11 Reconstuction & Dev.Department 766,829.09 Spanish Lookout Community 639,207.24 BNBS Burrel Boom Housing 600,000.00 Border Management Agency 500,000.00 Civil Service Credit Union 434,567.77 Belize Elementary School 181,258.26 Atlantic Bank Shares 152,490.00 BRC Printing 145,211.04 National Teachers Union 125,000.00 Evagel Credit Union 96,489.18 J.V. Hyde & Company Ltd. 90,935.00 Urbina Brothers 65,486.93 Universal Travel Services 51,788.77 YWCA 14,599.59 Coverup writeoff to Courtenay alleged embezzlement scandal by the same scoundrels in the cabinet. 3,430,000.00
A SIMILAR REPORTING FROM MINISTER OF FINANCE RALPH FONSECA IS REQUIRED, OUTLINING ALL THE GOVERNMENT OUTSTANDING LOANS TO INTERNATIONAL LENDERS!
Give us a report of ALL our International Loans with balances outstanding and to who? Tell us the balance owing, the amount of interest being paid, the amount of interest and principal actually paid this year so far. Who do we owe mon? How much are we paying in interest? How is our standing for this year on loan payments?
C'mon mon, do your job, or quit, or take a cut in pay of 75% because you cannot do your job! The voters want to know!