Big Banks Blackmail little citizens to prevent testimony before congress

Four credit card victims were ordered to sign waivers allowing their creditors to release their private financial records to the public before they could testify before the House Financial Services Committee. The consumers had flown in from across the country to share their stories at a hearing on the Credit Card Bill of Rights, but credit card companies insisted—and Republicans and Democrats agreed—that it would only be fair to release documents like credit scores and a list of recent purchases in order to rebut the consumer's claims. "Fair is fair," Congressman Spencer Bauchus (R-AL) barked, as he defended the absurd request. Ultimately, the consumers didn't testify, but one invitee, Steven Autrey, released his prepared statement, which slams creditors for their abusive and predatory business practices.

The Credit Card Bill of Rights is an excellent pro-consumer piece of legislation that would:
Ban arbitrary rate increases
Force creditors to provide 45 days notice of any rate increase
Ban double-cycle billing
Empower cardholders to set limits on their cards and ban over-the-limit fees once that ceiling is reached
Ban excessive fees
Ban lending to subprime borrowers
Require creditors to mail bills at least 25 days before the due date, instead of 14 days as currently required
Require creditors to apply payments first towards high interest itemsYou can see why the credit card companies were pulling out all the stops to harm this bill in any way possible. What is more surprising and disappointing is that members of the Financial Service Committee would help muzzle consumers whose only desire was to share their personal experiences. Congresswoman Maloney has vowed that "regular people" will testify at a future date.

Credit Slips Goes to Washington [Credit Slips]

Mr. Autrey Speaks for Himself [Credit Slips]

Credit Card Hearing Starts With a Surprise [Alpha Consumer]

http://www.washingtonindependent.com/view/questions-of-waivers

Adding Insult to Injury: VISA Plans what Could be the Largest Stock Sale in U.S. History

COULD THIS CREATED MORE PRESSURE ON THE BANKS TO USE PREDATORY CREDIT CARD PRACTICES?
Visa: Bailing Out The Banks New York Times

Visa plans to go publc this spring, and the prospectus filed today indicates that it will get $15.6 billion (after deducting about $481 million in underwriting fees) from the offering if it is sold at $39.50 a share, the mid-point of its offering range.
Of that money, how much do you think will stay in Visa to help the company grow?
In round numbers, zero.
This offering is evidently intended to serve two purposes. First, to bail out the banks that now own Visa from the financial responsibility of antitrust violations involved in Visa’s effort to keep its member banks from offering American Express or Discover cards. The first $3 billion raised goes into an escrow account to pay damages.
The second purpose is to get cash to banks that may need additional capital, which is to say a lot of banks. Essentially all the remaining cash from the offering will end up with the banks, from repurchasing stock from them. The banks can use the extra capital.
Whatever else this prospectus does, it lays out one of the most convoluted capital structures you will ever see. (MORE FINE PRINT THAT BENEFITS THE BANKS) It has Class A shares — the ones the public is being asked to buy — Class B shares, which go to banks, and no fewer than four different kinds of Class C shares, which also go to banks.
One bloggers comment on the NYT piece:
Round and round she goes, where she stops,… only a few know. The public will buy this, especially the “institutional public”. P.T. Barnum had nothing on Wall Street.

CREDIT CARD COMPANIES: AMERICA'S NEW LOAN SHARKS

onecitizenspeaking.com
The innovative industry marketing ploy of a 0% teaser rate offer is said to be the brainchild of Andrew Kahr, an industry credit card consultant who realized that in a world of competitive offers, a zero percent rate was a surefire means to attract your attention and get you to open the envelope. Even though the teaser rate will be honored by the credit card issuer through the specified period, the fine print makes it perfectly clear that if you miss a payment, go over limit or bounce a payment check, the teaser rate can instantly convert to the highest rates allowed by law.
The disclosure goes on to state that there is a different rate 3.99%) for balance transfers and the teaser rate is only available for three billing cycles instead of the six billing cycles mentioned for the teaser rate. It is as if the bank is relying on your first impressions of the advertising BOLD print and counting on the fact that you will let the rest slide under the radar. And again with the weasel words, "depending on how you meet our credit criteria."

"Other APRsBalance Transfer APR: 3.99% fixed for the life of the balance on

Balance Transfers made in the first 3 billing cycles after your account is opened.†

After that, 9.99% APR, 13.99% APR, or 17.99% APR as of 02/01/2008 depending on

how you meet our credit criteria.†*" But notice the exorbitant rate of interest for

cash advances, especially if you should meet any of their default or

penalty provisions... "Cash Advance APR: 23.75% as of 02/01/2008.†*"
"Penalty Rate APR: up to 31.75% as of 02/01/2008 (see explanation below).†*"

Again each item carries a footnote often indicating more unpleasantness to come rather than a further explanation of the footnoted item.

Credit Card Reform Is Coming

HoweStreet.com - Vancouver ,British Columbia, Canada
Like it or not (banks won't but consumers will) credit card reform is coming.Rep. Carolyn Maloney (D-NY) with backing from Rep. Barney Frank (D-MA), chair of the House Financial Services committee, introduced the Credit Cardholders' Bill of Rights while the Stop Unfair Practices In Credit Cards Act was introduced last May by Senators Carl Levin (D-MI) and Claire McCaskill (D-MO).There you have it. Both the senate and house are sponsoring credit card reform. One version or other is sure to pass in 2009. Keeping Card Companies HonestMSNBC is reporting Bill would keep credit card companies honest.
Could it be? Is Congress really ready to put an end to the credit card industry’s most abusive practices? A bill introduced a few weeks ago by Rep. Carolyn Maloney (D-NY), would change the way most credit card companies do business and provide significant consumer protection for every cardholder. “In recent years the playing field between credit card companies and credit cardholders has become very one-sided,” Maloney said. “A credit card agreement is supposed to be a contract, but what good is a contract when only one party has the power to make decisions? ”The Credit Cardholders’ Bill of Rights Act of 2008, known as H.R. 5244, would protect cardholders from arbitrary interest rate increases and unfair fees. Maloney, who chairs the House Financial Institutions and Consumer Credit Subcommittee, is quick to point out that her bill does not have any price controls. It does not cap rates or fees.

Could Bankruptcy Reform Be the Cause for the Dramatic Increase

in Predatory Practices by Credit Card Companies?

Some aspects of this legislation have little to do with the free market, but then again many of the abuses it is attempting to correct have nothing to do with the free market either. For example, the Bankruptcy Reform Act of 2005 attempted to make people debt slaves forever, even after bankruptcy. That legislation fueled a massive increase in predatory credit card lending that would not have occurred in a free market where lenders would have been more concerned about the credit risks they were lending to. Legislation on top of legislation is where we are today, each attempting to undo previous wrongs. The best thing to do would be to scrap everything and start over, but realistically that is not going to happen.
The rules keep changing. Chances are the contract you have with your credit card company gives it the right to change the terms of the deal at any time and for any reason with just 15 days written notice. That includes increasing your interest rate."No other business in America could raise the price on something after you purchased it,” says Travis Plunkett, legislative director at the Consumer Federation of America. “But that’s exactly what credit card companies do when they increase your interest rate on an outstanding balance.”
My Comment: I am not a legal scholar but self modifying one sided contracts written in fine print no one could possibly read seems questionable at a minimum.
And then there’s “double-cycle billing.” It lets the bank charge interest on balances you’ve already paid. Here’s how it works. Let’s assume you had a credit card bill of $1,200 and you paid off all but $100. With double-cycle billing you’ll be charged interest on the entire $1,200 the following month, not just on the $100 you carried over.“That seems unfair to us and it seems unfair to a lot of consumers,” says Consumers Union’s Jeannine Kenney.

When We Loan Money to Corporations why Do they Get to set The Interest Rates? Sometimes at 0%

globaleconomicanalysis.blogspot.com
CNNMoney is reporting MBIA eliminates quarterly dividend, saving $174M annually.
MBIA Inc. (MBI) said late Monday its board voted to eliminate its quarterly dividend. The Armonk, N.Y.-based bond insurer said the elimination will save roughly $174 million annually, which is the amount that the company paid out in dividends in 2007.MBIA said the action was taken at the recommendation of Chairman and Chief Executive Jay Brown 'to further strengthen the company's financial resources and to increase its operating flexibility.' The dividend was reduced on Jan. 9 to 13 cents, although no dividends were paid out at that rate. 'MBIA will continue to take reasonable and prudent actions such as this dividend elimination in an effort to retain and strengthen our Triple-A ratings,' said Brown in a statement.

The corporations can stop paying interest just in order to keep a AAA rating not to avoid bankruptcy. However, American families who are cashed strapped and on the edge, must endure usery increases in the credit card rates charged by the large banks. The banks can up them on just a whim or the need to increase their own profits. If that's not bad enough, Bank of America has asked congress for a $739 billion bail-out. In practice, taxpayers would almost certainly view such a move as a bailout.
To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates. If lawmakers and the Bush administration agreed to this step, it could be on a scale similar to the government’s $200 billion bailout of the savings and loan industry in the 1990s. The arguments against a bailout are powerful. It would mostly benefit banks and Wall Street firms that earned huge fees by packaging trillions of dollars in risky mortgages, often without documenting the incomes of borrowers and often turning a blind eye to clear fraud by borrowers or mortgage brokers.
Why is it when we loan money to corporations that they only pay us interest in the form of dividends and increased stock value based on what THEY can afford. Seems pretty lopsided to me. Sometimes, they don't even pay us back the principal. (Enron, etc.)

In Love Affair With Credit Cards Is On The Rocks it is noted how Bank of America (BAC) and other lenders have raised interest rates on credit cards out of fear of rising defaults.Citigroup (C) put a Strange New Definition On "High Risk" by canceling customers who actually paid their bills on time.In regards to Home Equity Lines, Countrywide And Chase Shut Off The Cash Spigot. Now, the Washington Post is noting that Bank of America (BAC) and USAA Federal Savings Bank are following suit.

globaleconomicanalysis.blogspot.comhtml

Housing crash fuels rise in card debt

USATODAY.COM - 02/22/2008
As more homeowners struggle with skyrocketing house payments, several experts expect many of them to start using their credit cards as a means to get by. Once unpaid balances reach five figures and interest rates creep past 20% or even 30%, however, credit card users face trouble.
"Anybody who is having trouble servicing their mortgage is going to try using credit cards to finance those other expenditures," said Tom Cargill, an economics professor at the University of Nevada, Reno. Nationwide, the use of revolving credit — fueled largely by credit cards — kept increasing throughout 2007, according to a recent consumer credit report by the Federal Reserve. Use of revolving credit rose 11.3% in November. In comparison, revolving credit increased 6.1% in 2006 and 3.1% in 2005. A large part of the problem is how easy it is for consumers to obtain credit cards, said Mark Pingle, an economics professor at the University of Nevada, Reno. But large unpaid balances can be trouble. A $50,000 credit card debt at 24% interest, for example, means users will need to pay an extra $12,000 per year on top of their regular payment, Cargill said. Add extra fees and all sorts of penalties to the mix, and credit card owners can dig themselves a very deep hole. Even credit card debt that's only in the hundreds can be a big deal for consumers with low incomes.

Fed's Rate Cuts Bring No Relief For Consumers' Credit Card Bills

By Nancy TrejosWashington Post Staff Writer Monday, February 11, 2008; Page A01

The increases have perplexed customers such as Richard Davis, an insurance agent who lives in Fairfax County who said the annual percentage rate on his Chase Business Visa card went from 8 percent to 24 percent in December, three months after the Fed's first rate cut. "That just floored me," he said. Card companies say they are exercising their right to protect themselves from risky borrowers and market conditions. But their actions have attracted the attention of Congress, which is considering several bills that would crack down on lending practices. Consumer advocates and analysts worry that higher interest rates will make it more difficult for borrowers to pay down their debt, which could slow consumer spending and further weaken the economy. Last week, the Federal Reserve reported that borrowing slowed in December, with revolving debt totaling $944 billion, most of it on credit cards. That was a seasonally adjusted annualized increase of 2.7 percent, down significantly from a growth rate of 13.7 percent in November.

Bank of America, for instance, notified some customers recently that their rates would increase as a result of a periodic review of their credit risk. Chase late last year increased the rate paid by new customers of its Freedom card. Bank of America and Chase are also among some banks that have increased ATM fees for other banks' customers to as much as $3 per visit. Capital One has raised its cash-advance fee for new customers from 19 percent to 23 percent. Davis, the insurance agent, said he called Chase when his rate skyrocketed on his balance of $4,500, which he said he was paying more than the minimum on time every month. Davis was told that he should have received a letter giving him the option to close the account if he did not want the new rate, he said. He did not recall seeing that letter. He wrote to the bank requesting that his previous rate be restored. Last month, he said, he received a letter from Chase notifying him that the account was closed. "It was either that or pay the higher APR," he said. "You gotta do what you gotta do." Jessica Hougentogler, a spokeswoman for Chase card services, said she could not comment on specific cases but that "there are a few reasons why a customer may see an increase in their rate including, a violation of the terms of their . . . agreement, making a late payment, exceeding their credit limit, paying with insufficient funds."
Davis said he did not commit any such violations.

A Credit Card You Want to Toss[BusinessWeek]

Bank of America abruptly notified cardholders in good standing their rates would skyrocket if they didn't opt out fast. Is BofA greedy or needy?

kittyscattitude.spaces.live.com/
They didn't even buy us dinner..."Boosting rates on existing credit-card holders is one of the quickest levers a bank can pull to try to boost earnings," says one analyst. "A Credit Card You Want to Toss" [BusinessWeek]
Why is Bank of America raising it's interest rates on it's good customers?

BusinessWeek has just published an article about Bank of America's recent surprise mailings in January to some of its customers, announcing "that it would more than double their rates to as high as 28%, without giving an explanation for the increase." These customers have good credit scores and hadn't made any late payments, and those who called Bank of America to ask why this was happening weren't given clear reasons. Industry experts say Bank of America has reached a "new level" of "lack of transparency in raising rates," beyond anything Citigroup and JP Morgan Chase currently practice, because BoA is apparently using some undisclosed internal metric to determine who gets the rate hike.

Banks Increase Profits at Our Expense

NEWS.COM.AU By Nick Gardner February 17, 2008

BANKS have hit both savers and borrowers in a bid to please their shareholders and maintain profits. According to data compiled by financial researcher Cannex, many institutions that have announced rate increases have passed on more than the recent 0.25 per cent rise in the cash rate to mortgage customers - and have refused to give savers the full benefit of the increase.
Credit card customers have also been walloped, with rate rises of as much as 1 per cent...

As for credit cards, Bankwest has raised rates across its range by as much as one per cent, while Commonwealth Bank has hiked rates by 0.84 per cent and NAB by 0.44 per cent. The hikes will pile on the pain for many borrowers, already struggling under record amounts of unsecured debt...

Consumers Lobby Congress to End Credit Card Abuses

By Truman LewisConsumerAffairs.Com
February 15, 2008
Congress got a special Valentine’s Day message from Americans fed up with unfair credit card interest rates and fees yesterday.
Consumers Union, Service Employees International Union, and the Consumer Federation of America delivered over 120,000 “Kiss Credit Card Abuses Goodbye” Valentine’s Day postcards along with Hershey’s Kisses to members of Congress signed by constituents demanding credit card reform.
The Valentine’s Day delivery was part of an intensifying push by consumer groups and lawmakers in Washington to rein in credit card lending practices that unfairly penalize Americans and contribute to increasing debt during an economic downturn. The effort comes amid new reports that some banks are arbitrarily and sharply raising credit card interest rates.
“Consumers are sick and tried of credit card company gotchas that result in unfair penalties and interest rates that climb through-the-roof,” said Jeannine Kenney, senior policy analyst at Consumers Union, the nonprofit publisher of Consumer Reports. “These practices have always been abusive, but now consumers are being hurt even more at a time when the economy is worsening and they can least afford it.”
In mid-January, Bank of America sent notices of steep rate hikes to many of its cardholders. The move has prompted a storm of protest from consumers who face rate hikes even though they’re in good standing with Bank of America.
• Credit Tips And Tricks
• Get Control of What You Owe
• No Easy Way Out Of Credit Card Debt
• Penalty Fees, Interest Rate Hikes, and Misleading Contracts Await Credit Card Shoppers
• "Convenience Checks" Carry a Heavy Price Tag
• New Forms of Credit Scoring
• Understanding Credit
• Credit Bureaus: Who You're Dealing With
• Credit Card Debt Climbs Worldwide
• As Credit Delinquency Rises, So Does Credit Relief Scrutiny
• Congress Calls Out Credit Card Companies
• College Students Warned Against Credit Card Trap
• High-Fee, Low-Credit Charge Cards Prey Upon the Poor
• Senate Bill Would Curb Abusive Credit Card Practices•

New Endangered Species: The American Credit Card Customer

Many Americans are saying that when you get little pieces of plastic from Chase or Bank of America, you are stuck with Credit Cards from Hell. I agree. After thirty years of good credit scores and no late payments on any bills, They both have the gall to raise my interest rate to over 30%. PLEASE POST YOUR STORIES HERE OR EMAIL THEM TO CREDITCARDHELL@HOTMAIL.COM. OUR VOICES MUST BE HEARD.Thanks to Chase and BOA, the American consumer may be the next endangered species. The DEVIL is not just in the fine print it is also in the lack of support and protection provided to us by Congress and the Whitehouse. They had no problem spending billions of our tax dollars to bail out rich people who put more than $100,000 into savings and loans even though the sign on the door told them that was all that was insured. But why can't they help the millions of hard working Americans that live from paycheck to paycheck and who are being taken to the cleaners by the Big Banks. We must demand a BILL of Rights for Credit Card Customers!Please visit http://abcnews.go.com/GMA/story?id=4277250&page=1 for the story that ABC's Good Morning America did on the problem on February 12, 2008. The reporters were CHRIS CUOMO, JIM BUNN AND IMAEYEN IBANGA.You can also let Congress hear your stories or opinions please visit http://levin.senate.gov/senate/investigations/index.html

The Permanent Subcommittee on Investigations initiated an investigation into unfair practices within the credit card industry. As part of this investigation, They commissioned a report by the Government Accountability Office (GAO) that was released in September 2006 and held a hearing in March 2007 that focused on three fundamental issues: grace periods, interest rates, and fees. The subcommittee plans to hold more hearings on other unfair credit card practices. If you would like to tell the subcommittee's investigative staff about an unfair credit card practice that you have experienced, please send an e-mail to mailto:creditcards@hsgac.senate.gov

Are we just peasants living in a feudal society created by BIG Banks? Now we know how repressed coal miners felt when they lived in company houses and owed their souls to the company store. They have taken our jobs overseas, sucked the profits out of American corporations, gutted the bankruptcy laws, destroyed the mortgage markets, and are trying to squeeze the last drop of blood from hard-working Americans.Some Important Points We Need to Consider:

1 - When I went to check my credit scores and get my credit reports from the three CRA's Experian, TransUnion, and Equifax and found many discrepancies on my records. It is tedious work to even try to read them - not to mention try to get them corrected. Here they are selling false information about me and getting paid for it. What do I get? Higher interest rates and other problems.

2 - The federal government should mandate a specific easy to read format for all three to use so all Americans can understand them and make it easier to get them corrected.
3 - We should get a copy of any reports that our sold by the CRA's.

4 - I am looking for an attorney that can help me copyright our family's personal financial information so I can permanently restrict access and charge a fee for its use. If the CRA's can make money off of my information why shouldn't I.

5 - Also in 2007, our auto insurance company said that they would now base our premiums on the use of credit scores also. How does my credit score affect my ability to drive? The federal government should regulate or ban this practice also. Credit scores can impact auto insurance rates

6 - We should support Senator Levin's legislative efforts. On May 15, 2007, Senator Levin introduced the Stop Unfair Practices in Credit Cards Act, S. 1395, [PDF] in an effort to ban the unfair practices exposed in this investigation and to protect consumers who seek to pay off their debts in good faith.

7 - If Chase and BOA felt the need to raise my interest rates to what amount to usury fees, then why do I get offers in the mail almost everyday from my current credit card companies that want to increase my limit and from other companies including American Express that want to give us their cards? We have received over 70 offers in the last six months.

8 - Why is it when we loan money to corporations that they only pay us interest in the form of dividends and increased stock value based on what THEY can afford. Seems pretty lopsided to me.

Go Figure and stay in touch.