Flanked by leaders from the credit industry and Congress, President Barack Obama announced today that he has signed an executive order designed to open up the consumer credit markets and give a boost to the still anemic American economy. For a three-month period, every American will get a perfect credit score, and the federal government will guarantee all loans made as a result of this “score stimulus.”
“This is perhaps the boldest public and private sector initiative in the history of this nation. We’re going to kick start the retail, construction and housing industries – all at no risk to our financial institutions.” The President said, “Today we can truly say that all Americans will be treated as equals in the eyes of lenders.”
Appearing in the Rose Garden with Vice President Joe Biden, Senate Majority Leader Harry Reid (D-NV), House Speaker John Boehner (R-OH), along with various members of the credit and financial services industry, the President announced that for three months, beginning on April 15th, the credit score of every American will be raised to a perfect 850.
For approximately 100 days every person over 21 will be afforded the opportunity to apply and be approved for the credit product of their choice. As 850 represents the highest score one can achieve, it is guaranteed that most applicants will be approved at the best rate for whatever product or service they choose. Should those borrowers ever default on these loans, the Federal government will pick up the tab.
Executives at banks, credit unions and credit card companies are bracing for an unprecedented influx of credit applications as Americans will undoubtedly respond by the millions to this once-in-a-lifetime opportunity to finally obtain the auto and personal loans, credit cards and mortgages they had seen slipping further away from them as a result of the Great Recession.
Speaker Boehner described the credit scoring initiative as “shock and awe” for the economy, hailing the program as an amazing example of how we can put America back to work without the aid of big government. “Now we will grow this economy without Washington having to impose more taxes on small business and wealthier Americans.”
When a reporter asked the President, Speaker Boehner and Majority Leader Reid how much the loan guarantees would cost American taxpayers, and whether or not this was really just a mechanism to infuse billions of dollars into the banks, no one immediately answered. Following about four seconds of uncomfortable silence, the President spoke.
“Listen, if we want to improve the economy, we’ve got to get banks lending more,” the President said. “And this is definitely going to do that.”
At that point, Speaker Boehner chimed in. “We don’t even know if there are going to be any defaults. What if there are none? What are we going to do? Budget for zero? Who budgets for zero? Makes no sense. Am I right?”
By this point, Majority Leader Reid had slipped out the back.
The sentiment in the business community was overwhelmingly and unsurprisingly positive. A senior representative of the U.S. Chamber of Commerce was present at the announcement and said, “This score stimulus initiative shows that when it is crunch time, American business and the American government stand up for American consumers.”
Others, however, expressed some concern.
The Chairman of the Community Financial Services Association of America, a payday lenders trade group, passed out and was rushed to the hospital when she heard about the plan. She held a press conference from her hospital room, and told reporters, “I am very concerned that this program will create a false sense of empowerment among consumers and ultimately lead us back into the same quagmire from which we are in the process of emerging.”
“I’ll be honest with you,” she continued, “This is a colossal misstep, and not just because it could hurt the payday lending industry. I guarantee it will have unintended consequences and those consequences will destroy the people it is intended to help – not to mention bring down the American economy yet again.”
When told about the comments of the CFSAA, former Senator Christopher Dodd (D-CT) and former Representative Barney Frank (architects of the Dodd-Frank Act), released a joint statement that included the following: “Hell must have frozen over. We actually agree completely with the head of the payday lending industry. We feel like we’re taking crazy pills.”
Bank stocks soared on the news of the deal. Shares of JP Morgan Chase were up 52% by mid-day, and Jamie Dimon, CEO of JPMC, upon hearing the news, said, “Seriously?!” Grinning, he continued. “This is pretty much the best day ever. And the greatest thing about this is that we can loan to anyone, and we don’t even have to ask for a bailout later. The bailout is built in. It’s a pre-crash bailout. Much easier. I think the government learned its lesson after the last debacle.”
He and the JPMC board celebrated the news later by dining on an entire baby seal, consumed atop the Eiffel Tower, which they later bought.
“We always celebrate big wins with a bottle of Macallan ’26 and baby seal,” Dimon later tweeted.
Regular Americans are also celebrating the news. An impromptu gathering has begun to form in New York’s Times Square, as well as other cities across the country. An NYPD spokesperson estimates that upwards of one million consumers will attend.
Arnold Pawderuski, an unemployed construction worker from the Bronx, was in Times Square to celebrate. Having recently declared bankruptcy because of “suffocating mortgage and auto payments,” an ebullient Pawderuski said, “This is like Christmas in April. Thanks to the score guys and the government I can get my life back and borrow another $300,000.”
A spokesperson for the National Retail Federation, told Credit.com that NRF members were accepting applications for new sales staff in anticipation of an unprecedented wave of buying. “This is a true vote of confidence for American borrowers. Today, our public and private sector leaders have declared in one loud and clear voice, ‘Yes we can!'”
Happy April Fool’s Day!
Remember folks, this kind of thing actually happened from 2004-2007.
No borrower left behind = No borrower left standing.
Originally posted at the Huffington Post.
