GA Recommendation Archive: Vote FOR 'Minimum Payment Act' | OWL

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[size=150] [background=#109AED] [color=#FFF][b]GENERAL ASSEMBLY[/b][/color] [/background] [url=page=dispatch/id=1333073][color=#FFF]SECURITY COUNCIL[/color][/url] [/size][/background-block][/centre]
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[size=120] [url=#reco][color=#FFF]Recommendation[/color][/url]   [url=#analysis][color=#FFF]Analysis[/color][/url] [/size]
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[size=150]Minimum Payment Act[/size][/font][/centre][hr][table=plain]
[tr][td][font=Avenir, Segoe UI]Author:[/font][/td][td][font=Avenir, Segoe UI][nation]Imperium Anglorum[/nation][/font][/td][/tr]
[tr][td][font=Avenir, Segoe UI]Discussion Links:[/font][/td][td][font=Avenir, Segoe UI][url=https://forum.nationstates.net/viewtopic.php?f=9&t=523061][color=#FF9900][b]Forum thread[/b][/color][/url]
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[/table][hr][background-block=#4572A7][centre][size=150][color=#4572A7] [/color][url=page=ga#WA_livevote_myvote][color=#FFF]✓ [b]VOTE FOR[/b][/color][/url][color=#4572A7] [/color][/size][/centre][/background-block][/sidebar][anchor=recommendation][/anchor][align=justify][size=200][color=#109AED][font=nationstates][/font] [font=Avenir, Segoe UI][b]Recommendation[/b][/font][/color][/size]

[size=120][font=Avenir, Segoe UI]OWL recommends voting [background=#4572A7][color=#FFF][b] FOR [/b][/color][/background] the at-vote resolution, "Minimum Payment Act". The Delegate has been asked to cast their vote accordingly.[/font][/size]

[size=120][font=Avenir, Segoe UI]Please find below the Office's Analysis for an examination of the resolution and the reasons for the final recommendation.[/font][/size][/align][hr]

[anchor=analysis][/anchor][align=justify][size=200][color=#109AED][font=nationstates][/font] [font=Avenir, Segoe UI][b]The Office's Analysis[/b][/font][/color][/size]

[size=120][font=Avenir, Segoe UI][tab=30]More or less directly understandable to non-economists, the "Minimum Payment Act" ultimately codifies what most would consider common sense. It orders that for business such as private loans, the loan-giver may not set the minimum payment to be below the sum of money that would be owed additionally due to incurred interest; furthermore, as a disincentive for loan-givers who consider ignoring this threshold, any set payment below this bar is to be considered to have met it, effectively netting delinquent loan-givers the loss of the incurred interest.[/tab]
[tab=30]While this all may sound intimidating at first, the Office finds [url=https://forum.nationstates.net/viewtopic.php?p=39904935#p39904935][color=#FF9900][b]the author's simplified example calculation[/b][/color][/url] extremely helpful. In case the interest incurred is not wholly covered by a payment, the effective sum owed to the loan-giver increases ‒ which, in turn, increases the sum of the interest on the loan and, if repeated for a few periods of the loan repayment, sends the borrower down a spiral of ever-increasing debt.[/tab]
[tab=30]The proposal tackles this unacceptable practice very effectively. Particularly, the treatment of any non-compliant payment as a compliant payment is a quite strong argument for loan-givers to adhere to the resolution's terms ‒ after all, the non-paid interest would be forfeit, and what stronger incentive to comply is there for a professional loan-giver, other than the very fate of their profits?[/tab][/font][/size]

[size=120][font=Avenir, Segoe UI]Thus, OWL recommends to vote [b]FOR[/b] the at-vote resolution, "Minimum Payment Act".[/font][/size][/align][/box]

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