America has a debt problem. Everyone knows it. Over extended. Late payments. High interest rates. Foreclosure. Bankruptcy. The divide between the very rich and the very poor is getting wider. In 'Maxed Out', documentarian James Scurlock points the finger at predatory lenders for this phenomenon and breaks down exactly how many Americans are sucked into this vicious cycle of escalating, insurmountable debt.
Interspersed throughout the film is a vintage 1950s vignette, featuring the character 'Mr. Money', as he explains the intricacies of money management and the concept of credit to two high school students. At one point Mr. Money explains that credit is based one three things: Character (the personal character and integrity of the person being extended credit), capacity (the ability to repay the credit extended) and capital (the collateral against which credit is extended). And it is upon these very principles that most credit card companies ensnare their 'prey'.
One segment in the film featured Mike, an investigative journalist who admittedly set out to prove that banks and credit card companies were not the bad guy. However, in his investigations, he learned that they in fact were. Interviews with people from Mississippi to New York City reveals all types of stories from banks changing loan terms at the eleventh hour, to high interest rates being risen after adding co-signer, to credit card companies extending beyond an individual's personal capital. However, when a person falls behind, they are happy to foreclose in the house, no matter what it is worth.
Two mothers represent 'The Activists' in this documentary. Janne and Trisha from Oklahoma each had a child in college who became overwhelmed with the easy access to credit cards in campus and eventually killed themselves. The mothers have since embarked on a campaign to remove credit card kiosks from college campuses, arguing that these companies do not evaluate a candidate's capacity to repay the debt their created, a debt enabled by the companies themselves. Credit card companies intentionally credit limits beyond the own ability of the borrower to pay. However the Comptroller of Currency also argued before Congress that guidelines are in place. Madam Comptroller stated (with an ambiguity reminiscent of the FCC) that although she could not tell them what those guidelines are, there are minimum criteria that applicants have to meet to be issued a credit charge.
The documentary shows how the principle of good character is the one of the best weapons used by 'The Debt collectors', companies that have purchased bad debts from larger credit card companies and have set up call centers to badger people into 'meeting their obligations'. Private companies like People First Recoveries pride themselves in playing upon a person's 'pride, fear, integrity and honor'. One caller grinned as he spoke of leaving a message with a debtee's neighbor and the humiliation that was sure to ensue. But don't blame the collectors. They are providing a way for you to meet your obligations, even if they present it to their callers as a contest of competitive sells.
In an attempt to be balanced, 'The Radio Host', Dave Ramsey provides his no-nonsense point of view to listeners far and wide. He believes you created your debt, you should repay it. He knows this is possible because he personally had everything, then lost it, then dug his way back to success and wealth. Moreover, the film quotes the statistic that one in four families do not struggle with credit card debt.
The cast of characters in this film is many. There is 'The Professor', from Harvard, Elizabeth Warren who passionately grapples with the idea that Banks and Congress (of 2005) are not interested in fixing this problem, but rather solidifying it with tougher backruptcy legislation. There is 'The Lawyer', David Szwak that reminds us that the standards and practices are decidedly different for the have than they are for the have-nots. There is Robin Leach 'The Voyeur', who reminds us that everyone wants to have more, be king for a day, and that is why everyone is always looking up, and in many cases living beyond their means. 'Maxed Out' tells its audience lots of things that the general public already knows. There are lots of things that we just accept as fact, as shown in snippets through a wry stand-up comic in his playfully routine about excessive over-draft fees. It entertains and educates.
Perhaps the most important idea that this film can be applauded for illuminating: In these times of easy credit and high interest, there is no room for error. We are invited to indulge in credit spending beyond our limits, and that is the ultimate pitfall, because one never expects to get sick, or to lose a spouse, or to be mistakenly assumed dead. But these things do happen. And in many instances, fast cash from credit card is often just a band-aid on a bullet wound. Personally, I walked away from this film with two thoughts: Contrary to what some recent television ads might suggest, Cash is not a four-letter word. And patience is an even better one.
Running Time: 1 hr. 25 min.
Release Date: March 9th, 2007 (limited)
Distributors: Magnolia Pictures