Bailed - Out Banks Face Probe Over Fee Hikes: Report

[elleng]

Source: NYT/Reuters

U.S. banks that received money under the Troubled Asset Relief Program (TARP) are facing a probe over increases in rates and fees, the Wall Street Journal said. The Congressional Oversight Panel, the body named by Congress to oversee the federal bailout, is working on a report examining instances of potentially inappropriate lending by banks that got taxpayer capital, according to the paper.

"The people who are subsidizing the activities of the banks through their tax dollars are the same people who are furnishing the high profits through consumer lending," Elizabeth Warren, chairwoman of the Congressional Oversight Panel told the Journal in an interview.

"In a sense, we're asking taxpayers to pay twice," Warren told the paper.



Read more: http://nytimes.com/reuters/2009/04/13/business/business-us-banks-probe.html

[ixion]

1. Not 'in a sense' we ARE paying on both sides

and it's crap.

[Betty]

5. and they're not ASKING us

they are forcing us.

[Divine Discontent]

27. exactly - it is financial rape. eom

[katty]

32. yes, over and over again

[Divine Discontent]

36. yep... and sadly, just like I've read, when poor victims have that happen to them

in the physical sense, they become 'dead inside' and numb to reality - I believe our country has just fallen into a deep dark denial. Sadly, I don't see the current admin. helping as much as I'd hoped. There is plenty of time for correction, but more and more, I don't like Geithner - I think he's a cancer on the O Admin.

[pam4water]

2. Yeah if you want to stimulate the economy quickley cap the interest rates and fees on the cards.

The money people are paying in high interest on the cards is going into a black hole. They could be spending that money on essentials or recapitalizing the banks by saving or repaying mortgages.

I'd like to see where all the money on cards go because the credit card companies already charge hefty fees to the merchants that accept credit card. There was a local gas station owner on the news the other night saying he payed $2000 a month to the credit card providers plus a pertransation fee of 35 cents and then the another fee, just so he could take credit card purchases. Then people pay monthly interest on the cash borrowed. And the float bonces sell stock in their companies and get government bailouts. There should be a geyser of cash appearing in on the Island of Manhattan. If you can't stay solvent on cash flows like that you need to get out of the business.

Wasn't it Reagan who repealed the old usury laws.

[No More Bushbots]

22. The Beginning Of The End Of The Middle Class

Yes it was Raygun that repealed the Usury Laws in the country as one of the first steps of the class war. Forcing lower wages and increasing credit was necessary to place the middle class into wage slavery to the elite.
Now we have banks that are taking our tax dollars and then lowering people's credit amount to below the amount they currently owe on the cards, while raising interest rates.
This is nothing more than the same style of cash grab that we saw last summer with Big Oil artificially inflating prices to score record profits while they had the opportunity to do it.
One of the first things that the Obama Administration needs to do to restructure the American Economy for long term stability is to reinstate the Usury Laws.
Currently the banks are allowed to charge rates that would be considered loan sharking.

[jbnow]

3. Hurray! I've been reading about Chase credit cards

and how Cuomo made them stop charging the $10 monthly
I didn't read the posts I saw on Chase, maybe that's what they were about along with the hiked rates and minimum payments.
I was just reading complaints. It's creepy, they picked out people who owed a lot for a longer time even if they had not been late. They really screwed everyone who had a Washington Mutual card by hiking rates crazily high.

I have Chase cards because they ate my smaller companies. I also have BOA because they ate everything including my mortgage and bank account (that weren't with the same place).

None of my rates have gone up, no new fees (yet) but I couldn't stop reading. I can't believe the way people were treated. They went from making their payments and getting by OK to having payments they can't possibly meet because of the bigger percentage due with a huge interest rate on a large amount.
They're being set up to default and I can't help wondering if they have those credit default swaps on these bundled debts...so besides the bank getting paid that way their hedge funds might have multiple CDS on the same debts so they can make that person fail and they can really profit.

If they just wanted more money in rates and fees why pick on the burdened people? If they want to get paid why not leave those rates alone? The people were paying and if it takes longer, well you get more interest. They want them to default. It needs investigating

[Dr.Phool]

21. I think the banks are starting to feel a little heat.

I'll make this a separate post.

Maybe they're feeling a little heat.

I have 3 Chase credit cards. I never applied for one, but they bought out banks that I had cards with. Two of the accounts have high limits and a zero balance. Haven't used them in years, and they just sit in a safe deposit box. The third one has a high limit, at prime rate. I've had it for about 15 years, and use it for major purchases, and usually carry a balance. I'm just trying to pay it off, be done with them. I've never been late, and I send a payment before I even get my statement.

In January, I got a letter telling me that the terms would change in March to prime + 4 1/2%. I called them then, and told them I wasn't going to cancel my accounts now, but if my rate went up, I'd cancel them all and pay it off. They weren't budging then. I checked my statement online on the closing date last week, and the rate hadn't changed, so I sent my usual payment.

I got this letter in the mail this morning.

Dear (Dr, Phool),

In reviewing your account, we learned (real Einstein's here) that a change in terms notice was sent to you in error in January or February of this year. The notice stated that the new terms would effective on your account in March of this year. Please disregard the notice you received--those new terms will not be applied to your account. If you elected to close your account when you received the notice and would like to re-open it, please call us at the toll-free number found on the back of your card and the top of your billing statement. We'll be happy to assist you.

Your satisfaction is important to us, and we apologize for any inconvenience this issue may have caused you. If you have any questions please call us. For your convenience, we are available 24 hours a day.

Sincerely,
Cardmember Service.

-------------------------------------

There certainly is a change in their tone. Are a lot of people dumping them? Is Congress finally putting some heat on?

I went through the same shit with HSBC on my Union Plus card. They threatened to raise the rates, but didn't do it.

I hope this is a trend, because they've been fucking a lot of good customers.

So, to celebrate, sometime this month I'll charge $.99 at i-tunes and buy a new song. What should I get?

[Iowa]

37. Why continue patronizing them?

When there are plenty of credit unions available, why do progressives help prop up the banking industry by continuing to do business with them? Why not switch to a credit union as a matter of principle, and tell the bankers to go f*ck themselves? I can get everything I need from my local credit union. I haven't used a bank in many years, and I get better service, lower costs, and my money is more likely to be recycled into my local area instead of enriching some mega-wealthy right-wing bankers - who will use my money to screw over the little guy in countless ways. Is there a good reason NOT to switch that supersedes these things? What am I missing?

[jbnow]

38. Almost everything I had started local, smaller banks

I noted in my post that it all ended up with Chase and BOA.
The banks it started with had been here for years and years then a few years ago they started being taken over...a series until after several steps I ended up with the big two. My mortgage is the last one to get the BOA name but they already own it.
I opened these accounts in the 80's or early 90's.
OI did not sell my local banks to bigger and bigger ones. The banks were also in walking distance. At that time I was not eligible for a credit union. Once eligibility opened up I was settled in, all was smooth and all the credit unions were out of the way.

And now? Lazy is likely part. My income has dropped and applying for new things not in my best interest and putting that on the record. Lastly my rates are mostly between 3% to 6% and I like that

[yy4me]

24. Chase and the others are very short thinking. They are double

dipping and that will backfire. People like me will not charge anymore and if possible, pay off any credit cards. What puzzles me is why it hurts your credit rating if you close an account. I was recently told that.

First we're supposed to spend, then we're supposed to save. Either way, the credit card companies win. Higher rates all around. At what point are the Usury laws applicable or are there any laws like that left?. These bandits are demanding too much. They got themselves into a mess that they expect their customers to fix. Sorry Chase, you've already lost me(took meager savings and paid them off/closed acct.) and B of A will be next as soon as I find a job and can scrape up the $$$.

Uncle Sam needs to stop this now.

[nradisic]

4. Time to pay us...

Big banks are totally screwed no matter what happens. They have been shafting the good customers that are paying on time, because, well because they can.That is after a bunch of their customers stopped paying bills or defaulted, the banks figured they would screw a bunch of their paying customers....good long term business move. Why are we keeping these banks afloat....who is going to want to bank with b of A, Chase and Citi when this is all done and said? Who? The people who got screwed? Nope...The people who stopped paying their bills? Nope? The existing bank customers who are still getting shafted by the banks? Nope. Then who? Why are we bailing them out? To benefit who? The big banks and dying a slow death and will bleed this country. We need to eviscerate them and form new banks that will serve the people and not the other way around.

[sarcasmo]

6. All Credit Cards should have a 15 percent interest rate or lower, stop the loan sharking NOW.

[pattmarty]

9. I believe Bernie Sanders introduced a bill in the Senate to....................

............do just that. Wonder what the odds that will pass???

[imdjh]

23. Chase claims that they need an AVERAGE of 12% to make money

Since their better-rated customers can go elsewhere if the rate exceeds 8% then obviously they try to make it up by charging others 16%-28%.

So who do they charge the higher rate to and what would those demographics look like? You guessed it.

[ooglymoogly]

30. 15% is loan sharking

that is more than 300% on the money they are lending.

[ooglymoogly]

35. By one swell foop they have and are eliminating

competition, as they did in the great depression. The same players are doing it again and again and again and we never learn. The key to getting away with this vacuuming up all the cash around every 15-30 years, is owning the government with whom they share a minuscule % of the usurious profit (theft) and by way of owning the propaganda mills. Sometimes they over reach on a massive scale, as in the great depression and as they are doing now under the nose of their selectively and conveniently blind media.

[MannyGoldstein]

7. Uh-Oh! A Smell A Sternly-Worded Letter!

Followed by another trillion or two of taxpayer cash for the Paulson/Summers/Geithner Banker Bailout.

[spotbird]

8. Any bets as to how long Elizabeth Warren

will keep her job?

[elleng]

10. Don't know exactly how she was named,

but she works for Congress. Her group has struggled with Treasury from the beginning.

[Timefortruth]

11. She is definately a progressive populist

They must not have explored her background before her selection. Or, as someone said above, maybe she has no authority to do anything beyond a strongly worded letter.

[elleng]

13. They've certainly explored her background;

Harvard prof, I think. The authority of group she leads is probably, as you suggest, simply to report to Congress. She has been 'complaining' that they're getting little cooperation from Treasury.

[JDPriestly]

12. And, impoverishing seniors who have saved all their lives while they are at it,

the banks are paying next to no interest on savings deposits and money markets. CDs do a little better in some cases. And don't tell me that we have deflation. I certainly do not see it in the grocery store. The increases from last summer -- that were ascribed to the rise in gas prices -- have never gone down, and the prices of some food items have risen. So, we seniors are tightening our belts too -- a lot.

[xchrom]

14. recommend

[Wizard777]

15. Banks will go out of business if we force them to accept money without charging a fee for it.

The other thing that is threatening the very existence of the banking industry. Not being able to capitalize on Tellers that fart while processing transactions. They should be allowed to charge fees for that effort as well.

:sarcasm:

Congress should charge the banks the fees they force their customers to pay. Except that by the time the money got into the banks hands. Their billion dollar bailout would be 1.00.

[Bluenorthwest]

16. This is the heart of my pissed offedness

BofA Visa. Loads of open credit, always pay more than the minimum, never near the limit. Always paid not just on time, but early. One day for no reason they upped my interest rates to like 24%. They were so rude on the phone I can not really explain how vile they were.
Same day, I open my newspaper and read that B of A had gone to the government asking for billions because they thought their credit card customers were about to default enmass. So they set their customers up to default, then complained that they might default, and begged with a straight face for billions of customer tax money to 'save them'.
Such a clear cut scam, and I am simply livid at the B of A, and at the government who refuses to address such open fraud. Talk about pirates, I give you B of A. And not a Naval vessel in sight. To me, this is a situation that strikes directly at my trust in our society. Collusion and fraud against the people.

[FailureToCommunicate]

18. 'Talk about pirates: B of A. And no navy in sight'. We're screwed. We're all in

in the same shark and (bank) pirate infested waters, but alone in our little boats. Seldom a happy ending for the little guys.

[Bluenorthwest]

19. Actualy, credit is a product they sell

and this little guy got up off his lazy and started moving the business elsewhere, mostly to my credit union. Tiny interest, non profit, tied to my Union. Enough little guys like me, and the big guys will be gone.
They sell a financial tool. They don't want to price it fairly, I buy elsewhere.

[FailureToCommunicate]

25. Good idea. But some of us will have a lot of bailing our boat before jumping ship

[xxqqqzme]

26. I'm w/ you.

I closed my last CD account w/ Wells Fargo over a year ago. I walked out feeling like a weight had been lifted off my shoulders.

In March, I used my ATM/debit card to buy some seeds - persian cucumbers. The charge made it to my credit union last Thursday and they called me because it was a new vendor in my history and they wanted to make certain I made the transaction. All that for less than a $10 purchase.

[Kindigger]

34. I finally got my notice Saturday

I have three cards. Have never been late. Have always paid immediately upon receipt of the bill. Always way more than minimum, and sometimes if I had extra, I'd pay some more at the end of the month.

Paid them all off about two months ago. So I get my notice from B of A that my interest rate is going up I guess 'because its in the user agreement that they can change things when they want for no apparent reason'. :shrug:

[Joanne98]

17. Fees and INTEREST RATES!

[barbtries]

20. in a sense,

they're not really asking; we don't have much of a choice.

[Hulk]

28. Time to take these white collar scum bags over!!

Anyone else tired of being ripped off by the banks and their deceptive practices, blood sucking of the population that need financial assistance? I've been upset with the banks for most of my life. Bleed the populace dry, create dumb ass fees and give nothing in return.

It's time the government DOES take them over. Maybe it would be no better, but it couldn't be any worse. And at least the profits would be going to pay the national debt, etc.

[harmonicon]

29. no shit

[katty]

31. yep, tax slave bend over once, twice-and stop yer bitching

[TheEuclideanOne]

33. Well, you can rest easy now, we are probing them.

I feel so much better now. They can actually hand this investigation over to the new guy. After all, this is easier to figure out than "The Earth is being probed to determine if it is flat or not".

[Zhade]

39. See, this is why you don't reward the extortionists that fucked up the economy, Obama.

NT!