And the consumer can protect themselves how against having a credit card, like many with a balance they can not afford to currently pay off, and have a pamphlet come in the mail saying we just raised your interest on said card by another 15%.... that is a farce and such bull...

also, to give you a little more background on maine b&t, they were sold to chittenden in 2001 for $50 million in cash (not a bad return for a 10-year investment). chittenden (vt-based portfolio of community banks) was then acquired by people's united for $2 billion in 2008.

her main reason for starting the bank? a concern that banking was being dominated by out-of-state institutions & pretty soon there wouldn't be any local institutions. in 5 years time, she doubled her investment. she has since passed on & ironically, as of 01/01/09, maine b&t is now a part of peoples united (a conn. bank). sellouts.

anyway, i think today's market requires a more substantial investment - largely due to an enormous increase in the reliance on technology (in 1991, banks didn't need a website, online banking, billpay, electronic check clearing - even ATMs were relatively new to the banking scene) & rising costs overall.

i think $20 million would be a pretty solid start for a one-branch operation. naturally, that's used as a reserve to sell stock, which could generate 5-20x that in operational capital for the company. interested? if you've got the funds & you know a few good local bankers/investors - maybe owning the town bank is right for you!

More like a fist job with a smile.

So, I'm guessing BOA wants to have their cake and eat it too. Instead of pissing off people with good credit by closing the accounts altogether (knowing they wouldn't make any money off them anyway), they raise the rate in case any of those people do start to run a balance and become profitable. They see the opt-outs as acceptable losses, and if people just start not using their cards, they'll eventually close them due to inactivity, still not losing anything.

I thought it was asinine to offer me a new card instead of keeping my rate, but if I opened that new card, they could show the government that they're opening new accounts. (With MC instead of Amex, who probably takes less of a cut.)

This is what I'm thinking anyway.

A: Entirely

But the* eally* annoying part isthe reams of inane boilerplate - no matter what I send in an e-mail to customer service, I get slop back. Is anyone actually awake over there?

But of course I forget the fact that many people think they're entitled to a no-interest loan on that 56" plasma screen TV even though they're flipping burgers or mopping floors for a living because they work hard.

Wow... just wow... and the government isn't impressed by what happened. We were not shocked nor surprised.

I guess the government should have just kept our money and let the banks fight it out amongst themselves.

There would have been many that went into the toilet but at this point, if they were not in the toilet, they should have been by now.

Hey goverment: Fix your own stupidity first.

Henwy,

Paid back faster? Paid back? That's a joke, right?

Do you honestly think that the taxpayers in the US are going to see a single penny repaid? How, exactly, would they do that? Do you expect a check in the mail? Do you expect the tax rate to lessen?

The US is quickly going the way of the Roman Empire. We've become so interested in protecting our borders against the barbarian horde that we've lost sight of the rotting corruption that has become Washington D.C. And yet, we continue to elect the same people year after year.

The U.S. is all bread and circuses right now.

@PunditGuy: What he means is the line "the gov't said give mortgages to the po' folks to buy houses back in the 1980s-1990s" that alot of conservative pundits hold. They fail to explain over-extended people who lose $1.2 million homes, though...

@jpdanzig: I disagree. Banks do use violence by using the government. Sure a bank won't come to your home and aim a gun at you, they send a sheriff to do it.

@laserjobs: I wouldn't go that off the deep end in the description.

I would say the personell at these companies function as cells of the overall a-moral organism that only functions to eat more and more money in the easiest and fastest ways. If the consumer throws out a block (law, etc)it dedicates money to reduce, remove, or run around the block so it can keep eating even more money. And it will keep harvesting money from its victims (debtors) even if it kills the victim in the end (bankruptcy or paid off credit accounts). It has even made bankruptcty less of a tool to eliminate debt now so that it can keep feeding.

@LegoMan322: I wish I could stop bailing out our government.

@Silversmok3: There ~used~ to be a selection of laws against these type of practices. Until the banks/ credit card companies hired lawyers and lobbiests to defeat the laws in the name of capitalist commerce...

On either end the taxpayers are getting squeezed. I want to know why so many of these bankers were paid huge bonuses on bets that went bad. Why aren't they paying that money back? Why is no one in jail over this?

Oh, that's right - they gave lots of money to politicians.

BOOT TO DA HEAD!

@trujunglist: They didn't get us into it, but they promised to get us out. Still waiting on that particular campaign promise...and many others...waiting...waiting...

Only difference is that drugs and dealing drugs are illegal.

Everyone has the fear of the word socialism, but really, we're pretty much there anyway. We just have enough differences to make sure that those in power can collect a handsome profit.

And on another topic: I am so sick of banks saying that TARP money wasn't used for XXX. If I am broke, I can't say that I have money set aside or this or that, but claim that I need help pay my obligations. If they can't remain afloat without government money, then they are in effect using TARP money.

You got it! My 3 yr old went nuts yesterday when he didnt get *ALL* of the easter eggs in the easter egg hunt.

So, who is the 3 yr old here? The government or the banks?

I pick C, all of the above.

Yeah really, those fuckers can't even get us out of Iraq after getting us into that clusterfuck!

unfortunately, it's not an easy proposition. whereas banks are definitely very profitable for investors, i wager you'd need at least $20 million in capital to start a banking op. today.

Make those loans unlawful, unavailable, and downright impossible to obtain. It's honestly got to happen - so long as there is a market, there will be people out there to supply the need.

If you are really interested in change, stop giving them your money and stop using their credit card.

Oh wait - they were failing so our government handed them money. So much for the free market system.

@Terraxsu: Agree, but with the footnote that for charge offs and possibly other write downs, there is a huge tax break that covers some of the costs. I guess my real beef with it is that the people getting charged with huge rate hikes are subsidizing the deadbeats and speculators. I know that is how its supposed to work normally, but when you're talking 30%, thats not something I can overlook.

@Silversmok3 - They certainly are out to get us. But the way it is and the way it should be are different things. Like TEW said, I'll have a lawyer look my paperwork over but there's no reason we shouldn't regulate the behavior as illegal and give the consumer a hand.

There is a class of people in this country that feels entitled.They feel entitled to your earnings,they feel entitled to government subsidy,and they feel entitled to government benefits that have no chance of ever being repaid.
This class of people also feel that we taxpayers should have no say in how they use our tax money.Once the check is mailed,it's theirs to do with as they see fit.They are a dependent class that feels that Washington,D.C. i the answer tothe poor circumstance that they find themselves in.

Welfare queens ? Nope.
Illegals, sucking the sugary teat of Uncle Sam ? No again.
Single mothers ? Get real.

This class of people are called "bankers".And the next time you hear or see their ilk complain about "interference from Washington",just remember,they are all on the mooch.

@KyleOrton: That is why you get EVERYTHING in writing.

@HRHKingFridayXX:
I agree in principle. The problem is that they are making money on the majority of people with these rates, it is the ever-increasing number of individuals who are delinquent that seriously cuts into that potential profit. Delinquency rates are going up and up and the banks are forced to reserve for the potential loss (expense), attempt to collect on them (expense), then turn it over to a collection agency (expense), then possibly charge it off (big expense). In part, the people not paying back their loans/credit cards are partially causing the banks to increase rates as they try to recover from those losses. I'm not saying its right, just a reality.

The only thing distinguishing these usurer banks from loan sharks is the fact that presumably the banks don't use violence to encourage payment... yet.

Otherwise these household names are ruining the lives of ordinary Americans just the same, and it's disgraceful.

And these pigs award themselves staggering bonuses...

@LegoMan322: ...Then doesn't it make sense to mention it when we notice them being dishonest jerkfaces? To inform people? And to work to change it?

I'm not a finance policy wonk, so maybe some could help me understand why the Fed doesn't operate a banking system similar to a credit union--just on a national scale. As long as you're a taxpayer, say, you can enroll and get loans at some of these super low rates the banks all enjoy. This way the Fed could cut out the middleman and we could access our money that we pay in taxes and/or elect to keep in accounts without having to pay a few extra CEOs. I know socialism is a scary word, but I'd trust a collective American banking system (with plenty of private competition out there working hard to earn our business, too) more than the options we currently have. I mean, sometimes private schools are superior, but sometimes public schools are just as good, and I think that having several options in regards to education is great--so why not finance, too?

@KyleOrton:
That is why you pay a lawyer to read over the loan. He will know the stunts that the broker might pull and if they change the terms on you then you already have a lawyer. $500 is nothing when you are buying a 500 K house.

They're over-reacting to perceived risk and making the consumer pay for it especially since they can't hedge their bets with insurance anymore.

Most of the time they'll find someone and try to sell them a loan, often a loan they can't afford, rather than waiting for them to come to them.

Definitely don't get one opinion when it comes to taking any kind of loan.

@pecan 3.14159265: Seriously, who didn't see this coming?

Democrats?

Really, how hard can it be to turn a profit from essentially a zero % fed target rate. Are the banks that far in the red that they need to make 30% back on loans? I understand those rates when the fed rate is jacked up, but it makes no sense today.

the way i look at it, this is the price you pay for convenience. if you want all your banking needs served by one large national bank, be prepared to get hosed on loan rates. savvy consumers shop banks just like they shop purchases.

@KyleOrton:

We live in a day and age where an intelligent consumer must assume theyre being screwed by any company they deal with.

It sucks, but its the reality of today's consumer market.

As such, a small education on what youre buying and some common sense will go along way to keeping money in your pockets.Remember-its not paranoia when they really ARE trying to rip you off. ;-)

@Esquire99: Personal responsibility is great and all, but shouldn't banks, etc., ASLO have personal responsibility to you know, be honest?

Plain ans simple, we are at war with the banking oligarchs and people are just discoving this truth. Slavery was never abolished, it was just morphed into central banking. Sadly our goverment is now under their control.

"8% is the best rate a bank will offer to someone with your credit" while jacking the rate up more. That's dishonest.

prime is at 3.25%, fed overnite is at 0-0.25%, but the "market price" for consumer lending is in the 20-30% range? something's wrong here.

And if all banks are "pulling the same games," how would anyone know if a rate is "insane?"

I don't know how a consumer could possibly know enough to protect them from every dirty person in every field. Reading through a contract is not enough when they're battling with an experienced person who wants to cheat them. If mortgage brokers aren't bound to be ethical or honest, most consumers without a finance degree are helpless against. them.

Anyway, we need to have usury laws rewritten back to the way they used to be, i.e., subject to the laws in the states where the CUSTOMERS reside, not in a state chosen by the issuer which happens to allow enormously high rates.

I presume bank and CC lobbyist were responsible for "convincing" congressmen/women to butcher the old law. Return the law to state level and give the lobbyists a run for their money!

Seriously, who didn't see this coming? There is no reform, these companies are not better just because they're sinking a little. They know if they start taking on water, the government will throw them a life vest. So guess what - dishonest companies continue being dishonest because so far, it's paying off for them.

To play devils advocate, its the consumers responsibility to read the paperwork before agreeing to the loan. If the interest rate is insane, leave and get a better deal elsewhere. If the other banks are pulling the same games, find another way to get the money-or do without what youre trying to buy.

Its still OK to say NO if you youre being hustled by the fine print.

Banks said to Gov: "Because you gave us the money you f*cking morons,....and you are not going to do anything about it anyway!"

Just that statement of "... making predatory loans with taxpayer money" is all wrong. They did it with our money and without our money. Did the government really think it was just going to stop?

Government..... FAIL!