By Oumie Joof, Jubilee Communications Intern
It has been an exciting couple of weeks at Jubilee--not everybody gets to help poor nations through debt cancellation, visit the Supreme Court, go to Congressional hearings about the IMF and eat at Good Stuff where Michelle Obama went to eat a good old fashioned burger.
Today Jubilee is asking its grassroots to call their Representatives in support of the Stop VULTURES act. Yes....I said "Vulture." The first time I saw it on the agenda for the staff meeting, I really wondered what it could mean. Now I can explain it to you:
There’s a practice where a creditor sells the debt of a poor country that’s struggling to pay its debts to a private creditor. These debts are usually bought for much cheaper than they are worth, pennies on a dollar. If the new creditor is a Vulture Fund, it patiently waits for the poor country to get debt cancellation and then sues them in a British or American court for much more than they bought the debt for, often for the original amount of debt and more. This way, they can make up to tens of millions in profit. Although it’s not illegal, it’s ridiculous and unjust! It prevents these countries from harnessing the benefits of debt cancellation to improve health care, education, infrastructure and other basic necessities.
As expected, these countries have to be saved from these scavengers. Luckily, the "Stop VULTURE Funds Act"(HR 2932) has come to the rescue. Introduced by Representatives Maxine Waters and Spencer Bachus, this act will prevent Vulture Funds from collecting more than 6% interest above the original purchase price of the debt through US courts. Vulture Funds would also be required to operate in a more transparent and fair manner. A limit of 6% profit is not attractive enough for “Vulture Funds” to remain in this line of business for much longer.
YOU! can help this Act get passed. Just pick up your phone, dial 202-224-3121 (Capitol switchboard) and ask your US Representative to co-sponsor the bill!(Click here for help)
One last thing before I forget: my name is Oumie Joof, the proud Data Management and Communications Intern at Jubilee USA. I am from The Gambia, grew up in Nigeria and attend Ohio Wesleyan University.