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What's also bad news is that I heard the Fed is cashing BofA's check at a nearby check-cashing place, so they can also pay their cell-phone bill at the same time...
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Well, maybe they can at least finally pay off the cash they own to that Payday Loans place that they borrowed a while back.
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Thanks, I needed a good laugh. :)
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I used to admire BoA.
My sister used to work for BoA.
Then she got laid off around Dec-January 2008, on the eve of Merril Lynch acquisition, citing poor economy. The week after she packed her stuffs, they threw the god damn million dollar sport party and paid bonuses to the big wig... Screw them.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-537475-100x100.png\")
Isn't that just the worst thing an employer can do? When I got laid off, the CEO came to talk to everyone about the new direction the company was going in - new direction apparently meant the laying off of 200+ people. And he proceeded to say that they were expanding, spending more energy and resources to new ventures, and all of us who knew we were being laid off were glaring daggers at the man as he talked about investing in new ventures.
When the company a friend works at laid off a bunch of people, they still held a holiday party - and wanted all the laid off people to come. They had talked about cut backs, and problems with revenue - and threw a lavish Christmas party a week later. The way my friend described it, most of the staff was extremely angry with upper management.
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Yes, and this will never change. If you try to tax or regulate a large corporation, it always ends up affecting the lower level employees or the cost of the goods/services you buy. The CEO's salary isn't going down anytime soon, since the CEO just sit on each other's boards. It's a circle jerk.
That's why I view taxation of the ultra-wealthy and use of that money for healthcare, education, etc. as our only viable equalizer. Meaning, they're not going to pay the regular Joe more money, so I figure if we give him \"free\" healthcare and education, that a few less things he/she has to worry about and can use the pittancee that they make on other things. People go nuts when you talk about raising taxes on the wealthy, and talk about socialism. But we've capped salaries in the 40's and 70's and the tax rates have gone as high as 90%. During the \"golden age\" of the 50's, the highest tax rates were in the 70's. So, we've been socialist for most of our income tax history? How did our economy expand under such an oppressive regime? I don't think its a irrelevant that our middle class started to quickly shrink in the 80's when Reagan created what many now view as the \"norm\" in tax rates.
/rant
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-4119-100x100.png\")
Let's also add that 90% of Americans have been living under a salary/wage cap since the 1980s.
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What you mean being paid a flat rate in which no matter how much you work you will always get the same money in the end is fair?
Remember unions are evil and do nothing for people.
Audit the Fed.
Are lions laying down with lambs? This is probably the first time we agree on this. I get that the Fed needs to try to be quasi-independent to maintain economic confidence. I even get that there should be some level of confidentiality about some transactions (to prevent people from running on a bank). But they've gone way too far.
Well, what a clusterf**k.
I'm really, really glad I bank with a credit union, and really, really pissed my tax money ended up in the pockets of BoA and ING.
Well, your money could still end up in the hands of Bank of America, considering some Credit Unions deposit their money to the account at some big bank.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-1523317-100x100.png\")
What are you talking about with ING? Did I miss something? I thought the only bailout ING got was from the Dutch government. When did they get any from the US?
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-1523889-100x100.png\")
My thoughts too... isn't ING OK?
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I took the advice I received on Consumerist and joined a credit union. Unfortunately, it must have been the worst credit union on the planet. They were even worse than B of A, with which I'd never had a problem. The straw that broke the camel's back happened when they screwed up an e-payment to Qwest that ended up with me in collections for a phone bill I'd already paid. It was an absolute nightmare; the credit union was completely unhelpful and unsympathetic to my plight.
Anyway, I went back to a regular bank - although it's not B of A - and will never go back to a credit union. My point is, I'm sure there are great credit unions, but some of them are really crappy. People here are always giving that advice: \"Use a credit union; use a credit union.\" They're not all perfect, you know.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-1425332-100x100.png\")
In comparison, this is the FIRST I've heard of a bad credit union. I hear about bad banks all the time.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-1183672-100x100.png\")
I can tell you of a terrible one, its initials are KSFCU. Their policies are Byzatine to put it mildly. They actually charged me a 'dormancy fee' where they took $2 out of my account every month for NOT doing anything with them. I got a job 100 miles away from home and moved to the new city. As a result, I never had a chance to go to that bank to close the account and have them stop taking money for literally doing nothing. Last time I checked, banks are supposed to give you interest for not touching your money. I was able to eventually close the account when I visited my mom over the holidays, but not until after they had sucked down $30 out of my account.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-498964-100x100.png\")
Really? Well here is another one: Right after hurricane Ike, while we were low on money because of missed work and having to replace everything in our fridge, my \"friendly\" credit union, sent me one of those fabulous letters you keep hearing about where they arbitrarilly raise your credit card intrest rate for no reason whatsoever.
My mom received the same letter about her card with them as well. Credit Unions are NOT all good.. a lot of them are (I work for one) but just because it says FCU on the door doesn't mean it's all peaches inside.
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EXACTLY. I always have to scoff when I see the much-loved \"JOIN A CREDIT UNION! BANKS R EVIL!\" line in comment to a Consumerist story because, just like with anything else, there are good banks and credit unions and there are bad banks and credit unions. There is nothing about a credit union that inherently makes it better or worse than a bank and vice versa.
I personally have had an AWFUL credit union that my family had been at for years. Once I got my job a couple years ago, I needed a bank account and also wanted a credit card for emergencies and to start building some credit. They jerked me around for about 6 months over giving me the card and basically accused me of being a liar over why the previous loan officer wanted me to apply at a specific date. At three months on the job (she still put the application through, knowing I'd be denied...my second denial from them), she said they \"usually want at least 6 months on the job before extending credit\" and that she'd approve me for one at six months. She was going to be on vacation at the six month mark, however, and rather than letting me come in before her two week vacation and letting me get it a couple days early, she wanted me to wait over 10 more days until she got back.
I didn't want to wait till she got back just so she could get the commission herself, and went in on the day that marked my sixth month and saw another loan officer. She noted that the first officer had noted on my account that I wasn't supposed to apply again until after the date her vacation had ended. When I explained why, she seemed shocked that it could have anything to do with her vacation because \"any loan officer here can process the application for you\", so the first must have had a good reason for making the notation (Uhh...yeah...the fact she wanted the commission, moron.), and refused to even take the application for me. When I got up to angrily leave, she hurriedly produced an application, and then had the nerve to sound critical when asked what to put for housing status since I live with and take care of my grandma. She ran it through with no consideration at all and quickly gave me a denial.
I closed my account that day (as I had sworn to myself I would if they screwed me over on the credit card the last time they intentionally put through an app they knew would be denied) and had a credit card for use in emergencies from National City by the end of the week. They lost out on giving a credit card for a measly $300 to someone that regularly had $1000+ in their account and, as they clearly knew from the app, had no bills and was all disposible income, because they repeatedly jerked me around and lied. They've also taken away and refused to give my grandma back a debit card for her account without giving reason why, despite having charged her a fee to give it back to her. TERRIBLE CU.
In addition to my personal experience with an awful one, the job I mentioned up there was for a credit union call center. Not a call center for just one CU, but for hundreds. Our service was horrible, and not because of poor jobs done by us. Our hands were very much tied, with many of the CUs not allowing us to do much of anything at all. For some CUs, we were pretty much a glorified \"Call back during business hours\" recording. Even ignoring out impotence with regards to being able to help people, half the time when we would email escalations over to the CUs, we'd have members call back yelling about how they were never called back or the CU screwed something up or any other number of CU employee screwups and indifference. Most of the CUs we dealt with were pretty awful and pissed off their members on a regular basis.
Many credit unions actually exist as arms of big banks, which may be what you experienced. I have
My credit union is fairly large as credit unions go, and I love them. I haven't ever used a bank though, so I don't know how different it would be.
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Interesting story. I think a lot of people in the online world slam big banks for a multitude of reasons, but first and foremost is because they got hit with an overdraft fee.
How confident are you that this is bad news? Confident enough to short Bank of America's stock?
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It's not bad news FOR BofA. It's bad news FROM BofA. Bad news for American Taxpayers.
It's worth pointing out (he doesn't make it entirely clear here), that they are reducing total loans from the Federal Gov't by $19BN, so, instead of owing the taxpayer $45BN, they'll owe $26BN.
Yes. But the only reason they're not doing it all is that the government is probably forcing them to keep some TARP money instead of converting to a Fed loan.
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The aren't being forced to hold TARP money. If they owe TARP money, they are held by TARP restrictions. This includes the capped CEO bonus/salary. They paid the TARP loan off to free them from these restrictions. (The CEO is retiring at the end of the year and they fear they won't be able to attract a \"talented\" CEO with the bonus and salary restrictions.) Fed loans are status quo in the banking world.
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That doesn't make any sense. BofA is paying back ALL of it's TARP money. In order to do so, BofA is borrowing money from another Fed loan facility. Essentially, BofA is taking $26bil from the Fed's left pocket, and putting it in the Fed's right pocket, along with $19bil of money raised via a stock offering. BofA will be completely free of the TARP program and its restrictions, but is still indebted to the Govt.
Definitely a good thing. The less they owe us the better.
Don't tell me, the check which they'll send by Western Union is for a little over $45b but that's okay because we get to keep that little extra...
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Doesn't the FED as a lender have the right to tell BofA at some point (if necessary) that their loan needs to be paid in full? Besides, I was always under the impression that banks borrow money from the FED on a regular basis.
TARP was an equity interest I believe. Money from the Fed is a loan.
It was preferred stock and warrants, not common equity stock. Still a form of equity, but not the same as common stock.
\"The Fed\" is an abbreviation, not an acronym. Pls to not capitalize, kthx.
Where I work we use so many acronyms that I capitalized FED.. my bad.. it's The Fed
Though we could say FED stands for \"Filch Every Dollar\"
Banks do borrow from the Fed on a regular basis, which is why this isn't extraordinary. TARP was an extraordinary loan; loans from the Fed are not. While it does seem a bit illogical (from the Govt.'s standpoint) that BofA is borrowing from the right hand to pay back the left, it's in BofA's best interest and the govt. is allowing it.
So this is just back to normal business. Yes that may be bad for the customer, as BofA can go back to screwing people without having to pay off the government watchdog that's leaning over their shoulder to look the other way.
Ugh, I hate to say it but I agree with you. BOA is doing the smart thing here- take money with strings or take money with no strings? hmmmm.....
I blame the government for even allowing this. No \"regular\" loans until the TARP loans are repaid. The problem is that we don't have any regulations in place to change bank's behaviours. So, until that happens a bank can pay back a TARP loan and do stupid stuff and be right back where we are (and there's evidence that they're doing precisely that, but now with extra bonuses).
Please don't blame BofA for doing this. They are doing the only economically rational thing.
Blame the government, which enables both corporations and individuals to make bad choices with no regard for consequences.
Blame those who enable them? You do realize that every single bad decision made by people is only able to be performed because someone or something enabled them to do so in the first place right? Your logic would suggest that no one is responsible for any of their actions. It is always someone else's fault because there is always a way to argue that someone or something else enabled them to do so.
The whole \"blame the government for all your problems\" gets really old really quick.
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Come again? How is it the government's fault that corporations or an individual made bad financial choices?
You only read half of the sentence.
So the government isn't the cause of the poor decisions made that got us into this mess, they are enabling it by not letting them FAIL.
I don't really think that speaks to causality at all.
You don't screw up and then just focus the blame on the government for not having punished you for those bad decisions you made. In that scenario there is NO accountability and no way to correct the situation except for an all powerful, all knowing government.
Not excusing the government or BofA for their stupidity, but does anyone remember the part where the government enabled BofA to make bad loans in the first place?
BofA found a perfectly legal, perfectly reasonable out for the TARP funds -- maybe the Fed will think twice before forcing banks to make bad loans and maybe BofA will think twice before making bad loans, and MAYBE (but probably not) people who make 30K a year will realize they cant afford a 300k home...
Wishful thinking I know.
I wasn't aware that there was a Constitutional Amendment or provision ensuring governmental protection from all corporate or personal stupidity.
Interesting. So, when people got in trouble with mortgages, they bought too much house, or didn't have personal responsibility. When banks do it, its the government's fault for even lending them the money?
Refinancing a mortgage is usually an option to consumers. How is this different?
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While it seems a bit... annoying to those who have a consumer-first attitude, it makes perfectly rational sense.
Just modify the situation - you owe your mother $10,000. As a condition of that loan, so long as you owe her one red cent, you have to give her every bank statement you get, a copy of each paystub and each and every credit card. If she finds you went out to eat or, in her estimation, you spent money where you shouldn't, you owe her another $10 each time. On the other hand, your father offers to lend you the money to pay back your mom and do away with those restrictions. Who wouldn't take that deal?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-161466-100x100.png\")
I'd take that deal in a heartbeat. The allegory breaks down though when you consider that the money isn't actually coming from mom or dad. It's coming from all of your fellow tax-paying citizens.
Well, I don't understand. If both options are available why would anyone use the TARP loans?
The Fed facilities weren't as freely available at the time TARP was given out; TARP was an extraordinary and \"emergency\" package that was put in place before the Fed \"window\" was opened up further.
Wasn't bank of america pretty much forced to take this loan to begin with? I remember the loans got passed out to the bigger banks so they wouldn't cause a run on the banks that needed it. We(the government) then tried to put a bunch of restrictions on it after the fact. Also bank of america already tried to pay this back and was shot down if I remember right.
The entire bailout thing was a joke. Let them pay it back.
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I can't, in all honesty, blame BoA here. It is your idiot representitives in the federal government who allow this sort of thing to happen. They pass badly written legislation without even bothering to read it, and then hope people will think companies are evil for taking advantage of the loopholes. This is not an example of BoA screwing the taxpayers, it is an example of the federal government screwing the taxpayers.
Umm. The government didn't create the financial crisis. The banks were the ones originating and selling the bad real-estate based financial products, which led to the systemic crisis.
http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act
Actually they kinda did. One of the worst things Clinton did was help that repeal. Because it was put in place to stop banks from doing the things they'd done to help cause the Great Depression. Yes it kind of is the gov't fault.
This argument is so old it is ridiculous. Why are so many of you so blindly one sided on this issue? The causes of the financial crisis are not limited to a single entity by any means at all. Yes, the government made some decisions which were \"enabled\" some private corps and banks to do stuff that they should not have done, but they did not force them to do lend a single dollar. Does that means the government is innocent? No. Does that mean it is entirely their fault. No.
Both played their roles, but in the end only certain people made the final calls/decisions and it wasn't the government. That's like saying just because mommy and daddy allowed 16 year old junior to stay out 2 hours past curfew that it is their fault that junior elected to use that time to shoot heroine which was ultimately self defeating for junior even though it felt good for him at the time.
TARP was an equity interest. The money from the Fed is a loan. These are different types of interests with vastly different legal consequences.
Further, the loans from the Fed are routine. No one usually gets upset when the Fed is loaning out money it is only now that it is brought to your attention that you are upset. .
lol thats funny.
guy: Hey man, someone's been stealing money from you.
other guy: What?
guy: Someone's been stealing money from you.
other guy: Who? When? How?
guy: It doesn't matter. They have been stealing from you all along. Now that you know you get mad so it doesn't matter. Nothing to see here. Oh but it was the Federal Reserve.
other guy: huh? the heck you mean NOW that I know...? Oh course I'm mad! Audit the Fed!
Receiving a loan and stealing money are two different events.
Don't bother. He is so ridiculously angry and bias that nothing stands a chance at sinking in.
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I think the government should give BoA the loan at the ultralow rate for 3 months, and then bump the interest rate up to 29.99%.
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Too big to fail = Too big to be allowed to stay one business.
Time to take all of these giant banks and break them up a bit. That way when one of them does something stupid and fails they make a small splash in the pond instead of a tidal wave.
\"at taxpayers expense\"? What expense? The taxpayer invested $45B and is getting $50B+++ back. BoA shareholders were charged $500 million by taxpayers for an insurance policy that was never signed - in most countries that's considered illegal. Let's calculate the taxpayer expense had Countrywide and ML failed, shall we?
So Bank of America is basically playing the old \"Smoke and Mirrors\" bull? I swear.... this is why some people HATE our government, because they allow this to go on.... they should have told BoA that they COULD NOT take out any other loans after paying this TARP loan for a period of 10 years.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-1342997-100x100.png\")
Y'know, I'm just wondering... I'm no big fan of how things are run in China, but, still:
http://www.reuters.com/article/idUSTRE5B71VC20091208
...why the hell aren't we doing this here?
I mean, cripes, man... over here, we're giving these scum more taxpayer money than they know what to do with -- we're even giving them jobs at the friggin' White House -- when what they ought to be doing is swinging from lampposts by their heels, like Mussolini.
And why does congress let them do it?
Since when is the Fed a a part of the government?
We need a fox to go vegetarian, I think.
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As much as I want to be pissed off at BofA, I really have to give them props for this. What business wouldn't unload an imposing debt where the strings attached are held by politicians that hate business, for a near 0% loan with none of the bureaucratic implications? Good business move on their part. It's not their fault our Federal Reserve has no oversight and makes decisions that will leave my children destitute.
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WE never had control, just the Fed.