Prime Minister, would you call the banks again?

It was March 26. Canada and scores of other countries were plunged into the jaws of a pandemic. Canadian infections were reported at 3,845 up 436 in 24 hours but it was the predictions of what to expect in the next few weeks that frightened most of us because of their uncertainty.

The Prime Minister was holding numerous meetings and holding forth publicly about the rapidly moving pandemic. His daily briefings were designed to keep the nation informed and reassured. A quick World-o-Meter check easily neutralized suggestions by some medical experts that Canada would some how duck the haymaker COVID 19 had unloaded in places like New York, 35,000 infections and Italy, 92, 472 – up almost 6 thousand in 24 hours. The Prime Minister’s daily seemed to be more reassuring. He was talking about immediate Federal relief and bringing needed medical supplies (PPE) solicited from China and Australia.

He also revealed the Big Banks were going to help with corporate interest rates and yes, his office had been in touch with the BBs asking the financial giants to ease the crunch of credit cards, most of which charge between 20% and 30% a month. “Would they please reduce the interest rate burden,” he asked. The request came at exactly the time most households across the country were making plans for numerous on-line purchases, most of which required credit cards. Obviously, a windfall situation for the Bankers. Unanticipated credit card charges as thousands ordered in groceries, pet supplies,wine and beer, and so much bathroom tissue some stores ran out and others restricted purchases, all of these necessities of life paid for on credit. And how did the bankers react? As George Bailey in Capra’s It’s a Wonderful Life? Or as that horrible skinflint Mr. Potter? Guess!

Would have loved to been a bug in the telephone calls the Prime Minister received from incredulous bankers who I imagine declared with substantial venom, that a request asking for relief on credit card debt for hoi polloi was not on anybody’s table. Period. And Prime Minister don’t bring it up again. And guess what, he never did!

You can look it up. For their part the banks reluctantly gazed at their millions of card holders and came up with a plan. If they discussed the generous position of car insurance companies we don’t know. The insurance companies as you know without asking for proof that drivers were driving less because of the lockdowns in March and April sent along a rebate cheque representing part of your insurance premium.

The Bank’s plan was designed to get maximum publicity out of an interest rate reduction gambit. On the face of it it looked a little like a George Bailey plan but a second glance clearly reflected the image of OLD MAN POTTER.

The big 5 said they would be reducing interest rates on credit cards but there’s a catch. Card interest would be reduced by half and there could be a deferral of payments for up to six months. Doubtful you could have been granted both. The big catch of course, unlike the car insurance people, you, the card carrying sap, would have to apply for relief . And let’s face it, Covid 19 or not, calling your credit card “buddies” asking for deferment or rate reduction because of hardship real or imagined is not good optics. It might be real to you but more imagined by your lender.

As we have come to know them the Banker gives nothing away. You will humble yourself to get that interest rate relief or deferment but all the prime minister was asking the banks to do is knock off the exorbitant credit rates while the lending rates to the banks dropped to near zero.

Simple request but the banks see it as complicated because reducing interest rates frustrates the head office bean counters and screws up the bottom line. But I don’t think the bankers approved every request for lower interest and/or payment deferral. Why do I think this? Because in some cases card holders have been asking their lenders to raise their spending limit in order to buy the necessities of life. A request to raise the debt limit means re-negotiating and there could be some Bankers Covid 19 or not, would feel that is not what the Banking fraternity pledged. Raising the credit limit, lowering the interest rate and granting a payment deferral alters the stakes. It can complicate matters and you probably have first hand experience with bankers. They don’t welcome complications.

Funny how that works even in a pandemic!

The Prime Minister made his pitch to the banks on March 26. And the interest reductions and payment deferments made it to Media April 4 but with the catch.

You prove to us you need the relief.

These days we are moving into the Second WAVE with gusto but the interest reductions and payment deferrals are long gone. Now what?!?

Hello, Prime Minister, hello,hello.hello. Was that a dial tone I heard or was it a click, or both?