Why is it OK for a bank to charge interest on thin air credit?

[Paul.Bearer.of.Injustice]

And compound interest at that.

Why is it a right of a bank to charge exponential interest for something it creates at the click of a mouse? Isn't a small transaction fee for bookkeeping labor good enough?
Seems to me that amortization and compound interest is a great way to ensure obedience through never-ending future obligations.

[RonPaulVolunteer]

I read a story recently where a person who had been foreclosed on took the bank to court. He alleged the bank could not take his house because for the contract to be valid, both parties had to put something up, and since the bank did not put any money of its own into the house, but simply created it from thin air, the contract (mortgage) was null and void. He won.

[Paul.Bearer.of.Injustice]

maybe i'm naive but that makes sense. only loans coming from savings and real capital has a right to interest.