I’ve been hard on Occupy in the past. Their refusal to participate in our political process was disturbing to me, as was their refusal to offer solutions to their complaints.
This new scheme does not really address either of those complaints on a macro level, however, they may be onto something that other non-government entities could mimic.
Its new initiative, called Rolling Jubilee, is being spearheaded by Occupy’s Strike Debt team to protest a “predatory” lending system, according to its website. The group will hold a telethon and variety show called “The People’s Bailout” in New York on Nov. 15 to raise money for the cause, and the proceeds will be used to buy defaulted debts — such as unpaid student loans and medical bills — and erase them.“The basic premise is simple: people shouldn’t have to go into debt for an education, because they need medical care, or because they have to put food on the table during hardtimes,”Occupy’s website says.
When a bank, lender or other company deems that it is unable to collect on a debt, it typically sells it to debt buyers or debt collectors — often at a much lower price than the original amount owed since the odds of collecting the money are low. Whoever buys the debt then attempts to get the money from the debtor themselves.
The Strike Debt campaign plans to keep the debts “out of the hands of debt collectors,” by buying them “for pennies on the dollar.” Then, instead of trying to collect the money owed, they’re forgiving the debts.
Not bad, right? Education and medical debts can be crushing. By acting as a debt collector and buying these defaulted loans they accomplish what is effectively a “Main Street Bailout,” except unlike the big banks, Main Street won’t have to pay this one back.
I see this as something other groups could imitate to an extent. When debts are defaulted on, banks sell them to collector for pennies on the dollar. The only risk of a flood of new groups looking to buy bad debt is that the market will push prices up on defaulted loans eventually. Other than that, this is actually a pretty good idea.
Their website is rollingjubilee.org.
UPDATE: Now I remember why Occupy is so annoying: