According to an article in today’s la Razon, Vice-President Jose Vicente Rangel has asked President Chavez not to approve the mortgage debtor’s bill that I described last week. The Bill has already been discussed twice in the full Assembly and would need only the President’s signature to become the law.
It would be very positive if the story is true, as the Bill would not be in the best interests of the country and would in the end benefit those that don’t need it. I find myself in Rangel’s side, something which does not happen very often.
The article by Luisa Elena Martinez in la Razon is actually very critical of Rangel’s position. It is full of sentences that have become clichés in the last few years like “the bill favors those that are judicially weak and gives them their right to housing”. “What is being done is establishing rules by mandate of the Constitution which reivindicates the Social State and where there is no room for financial speculation”
What the banks oppose is not that the bill does not allow for indexed mortgages as the article makes believe, but the fact that the Bill forces banks to lend a fixed percentage of their credit portfolio to these mortgages at very low interest rates, which would not be a good business proposition for banks, or anyone for that matter. In fact, there is a similar preferential rate for agricultural loans, most of which go to rich farmers and not to those that it should go to. I know a guy who has a cattle ranch that borrows at these preferential rates and turns around and places the funds in CD’s at another bank making two or three percentage points in the process.
Mind you, these loans are not new, they have existed for decades, but the National Assembly now wants to extend it to mortgages and “microcredits”. If all of these are approved, banks would have to set aside 48% of their credit portfolio for these credits for special interests which in the end don’t do what they were meant to do.
The Devil's Excrement 
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