When was easy credit really affordable?

I just read Fortune magazine's article on famed financial forecaster Meredith Whitney's predictions on the future of credit, of which she says there will be little to go 'round.

In case you aren't familiar with Whitney, Fortune writer Scott Cendrowski encapsulates her success as such: "Whitney's warning shot in 2007 made her one of Wall Street's first analysts to see that bad lending and rating standards across America had artificially raised the U.S. homeownership rate, and that banks weren't financially prepared for the equally unprecedented rates of consumer default."

To sum up the article quickly, Whitney says the new Credit CARD Act's restrictions on card issuers -- especially in regard to restrictions on instant interest rate increases -- will, in effect, prevent banks from lending "en masse" like they had before.

Her conclusion: small businesses, the unbanked population and consumers who rely on credit cards to make ends meet will turn to predatory lenders and end up paying dearly in fees and interest rates.

But weren't we already paying dearly for our debt? I mean, c'mon, those credit card fees could add several more years of life to your debt repayment. And before the economic meltdown, the only way to even afford a home in the overly heated housing market was to over-leverage yourself -- and the banks were there to help you do just that. To me, it was just one big pyramid scheme, and if you didn't get in early or out in time, you got caught with your pants down.

Whitney portrays this doom-and-gloom scenario of a greater majority of U.S. consumers having to rough it without access to easy, affordable credit. But when was credit truly affordable? It was easy to get, but before regulation, the lack of transparency and back-door fee traps made it so tough to get out of. A report released today by the Washington, D.C.-based Hispanic Institute goes so far as to say that for poor Hispanics, payday loans are a rational choice when you look at the high cost of traditional banking.

The recession has had its share of valuable lessons, for both banks and for consumers. One of those lessons: Not everyone can afford a mortgage or a credit card, even if you can package the products to fool everyone into thinking they can. Why would we even want to return to the old days of easy credit?

I realize access to credit is imperative for economic growth  -- especially for small business growth -- but personally, I found our "en masse" consumerism a bit unenlightening.

Whitney was quoted as saying, "What I worry about, despite all these noble intentions, is what these policies are doing is actually pushing down the middle class into a really unfortunate position where it gets a lot more expensive to be poor."

I have a news flash for Ms. Whitney: It has always been expensive to be poor; credit cards and easy credit just made you appear to be less so.