Klarinet Archive - Posting 000679.txt from 1996/03

From: "Dan Leeson: LEESON@-----.EDU>
Subj: Federation Goodies
Date: Tue, 26 Mar 1996 13:02:33 -0500

Every now and then I get a letter from the American Federation of
Musicians that advertises something as being under their auspices.
Yesterday it was a personal loan program from a group called
"Union Privilege Loan Program, PO Box 17296, Baltimore, MD 21298."

That is to say, the offices of the Federation were used to announce
this program so that the members of the federation can take
advantage of some largesse that gives the appearance of not being
available to the ordinary folk, only AF of M folk.

It is an interesting document. No human being can get up the strength
to read the details of the credit application, and only someone with
great powers of understanding can comprehend it. Well, that's no
different from a lot of junk mail that I get.

Since I am anal, I always double check things, and I could not get
the quotedpercentage rates to agree with a standard compound interest
rate calculation I did for any of the 8 advertised loan amounts.

For example, a loan of $3,000 for 48 months is said to require a
monthly payment from you, the loaner, of $84 and that is not 14.75%,
the advertised rate, but is 15.34%, a non trivial amount higher
than what one is supposed to pay. Alternatively, a loan of $10,000
for 84 months is said to require a monthly payment from you of $192,
and that is not 14.75% either, it is higher. In fact, all 8 of the
requested loan amounts were in error, the smallest being .0002% and
the largest .0059%. This may seem like a trivial amount to you, but
it adds up to amounts equal to another half-payment at the end of the
loan. And if that is what is going to pay, then one should know about
it, don't you think?

So I began to read the fine print and there it was, sitting like a
coiled rattlesnake: "Payments are rounded up to the nearest whole
dollar."

I am surprised that the AF of M would give its imprimatur to a program
that rattles enough loose change from a Federation member to add up
to almost half an extra payment. That's where the difference comes
from. To the loaner, the extra change taken is trivial. To a
compound interest calculation, it is not.

It is bad enough when strangers try to get their hand in your pocket,
but when the American Federation of Musicians give the appearance of
helping them, it is discouraging.

====================================
Dan Leeson, Los Altos, California
(leeson@-----.edu)
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