Credit analyst for a bank.

You’re wrong. We don’t like increasing interest rates and it usually doesn’t have a large effect on net earnings. Although we collect more interest our default rate climbs and it usually wipes out any gains we make. In fact, a rising rate environment can lead to increased bank consolidation because banks with poor management and underwriting standards have their default rates climb faster than interest payments can cover. This leads to a bigger bank buying them out or worst of all the FDIC shutting them down and auctioning them off to another bank.

Furthermore, what you call “financially illiterate” are often people dealt a bad hand or in a really hard place (minorities especially). What do you want us to do? Return to a system that basically red lines entire groups of people because they’re struggling? Lines of credit are extremely important for not only businesses but giving people some flexibility. There are absolutely people that can’t handle their debt and that’s exactly why banks have credit departments monitoring underwriting and making sure the bank is in compliance with the FDIC or other regulatory agencies.