Return of the banking predators

As America’s economic collapse disappears in the rear-view mirror, perhaps this is a good time to ask: What exactly did we learn from it?

The New York Times today reports that many states are easing laws that were intended to protect people with poor credit scores from themselves.

All it took was intense lobbying and campaign contributions.

The companies say they need the laws relaxed to reflect the high cost of doing business, but the Times say it found at least one filing showing the profit margin on loans to the poor top 30 percent.

OneMain, which has 1.3 million customer accounts, offers its borrowers unsecured, installment loans with interest rates of up to 36 percent. Borrowers pay both interest and principal in monthly installments until the loan is paid off, usually within a few years. But many of its borrowers refinance their outstanding balance.

About 60 percent of OneMain’s loans are so-called renewals — a trend one analyst called “default masking” because borrowers may be able to refinance before they run into trouble paying back their current balance.

In the regulatory filing, OneMain said it re-evaluates the creditworthiness of existing customers before it renews their loans.

“Importantly, our branch employees typically live in the communities they serve,” Mark Costiglio, a Citigroup spokesman, said in a statement. “This face-to-face interaction significantly enhances our value to customers as we work together to assess their household budgets and ability to repay their loans.”

In North Carolina, the state lawmaker who helped shepherd a law’s relaxation and is now running for the U.S. Senate with help from the financial industry.