Maxine Waters grills CEO's over the raising of credit card interest rates
By John Amato Wednesday Feb 11, 2009 4:00pm
Videos now working sorry for the probs....
Rep. Maxine Waters asks CEO's about their practice of raising credit card limits at the Bank CEO hearing today. How many of us have had a sudden jump in our interest rates without ever even knowing it.Which of course never allows people to pay off the debt. Waters is making a key point here.
Waters: Since you received TARP money, have any of you increased the amount of interest on the credit cards by sending out letters to the consumers, to your credit card holders indicating that this was part of the contract even though this was in small print and you now have the ability to do it, have any of you Did any of you do that?
Did you do this?
CEO: I was volunteering. First of all I feel like corporal of the universe not captain of the universe.
Waters: Did you increase your credit card interest rate?
CEO: In 2008, we increased interest rates on 9 % of our customers.
Waters: Thank you very much, did anyone else increase credit card rates after you received TARP money? Anyone else, if so would you please raise your hand. (most of them did)
You sent out the letters I'm trying to describe? Saying that you have the authority to do that. Did any of you reduce the amount of credit that was available to credit card holders because they shopped at certain stores? Just raise your hand if you did. None of you did. Let the record reflect, none of them raised their hands.
Tom Geoghegan has repeatedly talked about the idea of helping the American consumer with their credit debt by canceling their private consumer debt which would immediately stimulate the economy. He often speaks about how these institutions can raise their rates to as high as they want. The consumer can never catch up and it's a sad practice which will cripple Americans with overriding fear about their state of finances. And as he points out in the linked video, we always come up with the money for war....
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I like her moxie. She really gets in there.
I can never understand this argument--it simply rewards bad behavior. Americans need help, but why should the guy with $5K in debt because he bought a plasma TV get less help than the guy down the road with $10K in health care expenses? And why should the couple with a baby on the way but with no debt have to pay more in taxes to pay for their neighbors' expenses just because they were responsible savers?
I think making these usurious bastard roll the interest rate back to say 3%, with payments over the minimum going to pay down the principle only, coupled with lower credit lines would be much more helpful.
And Medical costs could be teased out of the billing and have a different lower, or no interest rate.
Another thing that could be done vis a vis medical costs on credit cards; if people who have had to resort to that now find themselves in dire financial straights, the unpaid balance on the card could be switched to Medicare/Medicaid.
I had to file bnky due to illness, and I'm lucky my life was pretty uncomplex. I know there are many out there who are not as 'lucky' as I am.
Instead of calling deficit spending bad behavior, let's call it "participation."
Then those who didn't "participate" can be punished for being unsociable, or anti-social.
cancel all consumer debt. And, frankly, let me know if they're going to, because I want to go out and buy a bunch of stuff so I'll have some debt to cancel!
Maybe it would just be better to have a "consumer interest holiday."
That is, allow consumers with credit card debt 6 months or a year to pay off the balance without adding additional interest. Or, something like that...
Give everyone a break without necessarily rewarding the choices they made, and if some debt is canceled, allow their past records to weigh against any application for new credit.
Practically speaking, it's hard for the average person to see why it's any more of a crazy idea than to pay for these other boondoggles that pass without our direct input and are billed to us.
Personally, I think I'll just keep using prepaid debit cards for a while yet. That gives me some amount of protection from identity theft, too.
Taxpayers help bail out the banks to the tune of billions but the banks gouge consumers even more. What kind of justice is that? The little people always get screwed.
As for forgiving debt, I would be in favor of cancelling the interest, but NOT the original debt. That would still help people out, as the snowballing interest is what really puts people in a bind.
..we are slaves to debt (the banks). The first trillion dollars was to protect the banks, not you or me.
This has been the greatest robbery of public funds in history.
The government could have taken the first trillion $$$ and offered it as funds (low interest loans) to refinance, buy cars, school loans. They would have energized the economy, promoted car sales, made many banks that were in trouble - solvent, and put millions back to work.
But instead, our future earnings are stolen to pay off old BAD debts.
Brilliant!
Keep on working suckers.
PS The US Gov. would have made >5% interest that could help pay off the deficit.
PPS Rinse and Repeat with the second, third, fourth..... trillions!
..and this is precious:
the banks have a disingenuous motivation to MAKE ANY LOANS NOW because...
if there still appears that there is NO MONEY TO LEND (YET) the US GOV. (you and me) will
give them more trillions in HOPE that they will start lending money!!!
Holy Freggin' Cow! Are we really this stoooopid?
..are the consumers axis of evil. Usurious ball gripping bastards who arbitrarily raised and tripled their interest rates while decreasing established lines of credit at a time when consumers needed to finally USE their cards.
And if you didn't accept their terms you were forced to cancel the cards- cards and credit histories that went way back. Years of building up those histories - GONE in an orgy of gluttony. For that reason alone consumers should be bailed out of paying them back.
But it gets worse. All three offered to give me a new credit card and lines of credit - that began at rates above 25%.
They're loaning all right - to those so desperate enough to pay whatever it takes to feed and clothe their family.
CITI I give kudos to- they've done none of the above and have bent over backwards to keep things fair.
Sorry to tell you. Citibank is raising all its credit card rates to 24.99, without the customers having done anything wrong. I got a letter and called and was told that the increase was just due to the economy. Since then, my spouse got a letter for a different card from Citi. Then we got a letter on our Sears card - also handled by Citi. All of them going to 24.99 without us having done anything. We opted out and closed them all - but make no mistake. A closed card with a balance negatively impacts your credit rating....damned if you do and damned if you don't - unless you are a banker and can pay in full.
"Maxine Waters grills CEO's over the raising of credit card interest rates"
May I recommend some dill, lemon butter, white pepper, ginger and white wine Worchesershire sauce?
Do you know how Worcestershire sauce got its name?
About a hundred years ago, somewhere in the deep south, a man invented this really tasty sauce, but he couldn't think of a catchy name.
He went around the town having various folks taste the sauce until he came up to one particular fellow who tasted it and loved it and said:
"Whas dis sher sauce??!"
And the rest is history.
Well, sort of....
OMG that's good!!
I put a half teaspoon or so in my mom's remarkable salad dressing.
*
Wed, 02/11/2009 - 16:37 — Abbybwood
Sounds like that one particular fellow was sauced himself.
Recommend anything you like - the meat will still be tough and tasteless.
*
And fatty.
Cannibalism, it's what's for dinner.
don't call it "long pig" for nothing.
now that I only pay cash.
Maxine nailed their sorry a$$es to the wall during the hearing today. We definitely need more people in Congress willing to work for the people and ask the tough questions. No sense hauling these frauds in here and then giving them powder puff questions - that's a total sham. These "circle jerk" questions and obvious powder puffs *Congressmen justifying their pathetic existence* are an insult to the suffering american people.
We need tough dialogue in order to get to the truth. Truth is that Paulson and Bush screwed us all in knowing they were "giving away" OUR money to these fatcats (have to wonder what kind of kickback Bush and Paulson got for their troubles???).
Bush laughed all the way out of the white house because he knew that he was (Intentioally) poisoning the well for Obama. He knew these crooks would steal the money for themselves; he knew that it would result in american outrage and he counted on it.
Remember his dour (fake) concern and comments about what would result if he and Paulson didn't get their way initially?
Remember that he originally had a 2 page laundry list which had the caveat that "nothing could be investigated" "no hearings about where the money went", etc., etc?
Does anyone still have doubts about 911 and Bush's involvement? If so, I've got a piece of primo swampland to sell 'ya - you betcha!
This policy is single-handedly sinking Americans financially all across the country.
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The funniest thing was when Waters was going on and on and then asked the B of A joker if he had done what she was talking about and he said, "I have no idea what you are talking about." I was watching and I totally understood his reaction. She was trying to get as much stuff as she could to shame these assholes and it was pretty scattered. She was good.
I'll try later ...
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[I informed the poobahs of the site just before your comment posted. Site Monitor]
paid or otherwise…
Have you read the Guardian story about the Pentagon hiding evidence from Obama?
.
Daily Kos has it up. Valtin diary was #1 on list.
Silly ol' poohbahs...
no workee
Here are some various quotes from today's hearings.
Here is a kind of long article that explains a lot. It IS from ABC news so I suppose it may be skewed. Its a good article though.
truly concerned about the interest scam of these entities, why did she and the Dems not put something in writing on one of their two spending bills?
They have the power to change this, but don't do any more than lip service. Why?
Yep!
Why don't they simply REPEAL the 2005 republican loan sharking (so called bankruptcy) act?
Oh yeah, a bunch of these democratic weasels voted for it! Tom Delay let the banking lobbyist sit in his office and WRITE the entire legislation, and these freaking democrats didn't have any idea he was gonna let the banks screw the shit out of the American people? Come on?
I can't tell you how many people I know with outstanding credit, have had their entire disposable income eaten up by 30% interest rates!
And when that CEO bastard says only 9% of his cutomers had their interest rates raised, he is a lying sack of shit! Waters ought to investigate this 9% claim, and then charge the little punk with lying to congress when it turns out to be 90%!
Cancelling all consumer debt is an assinine idea - from the perspective of someone with no debt. As mentioned above, if this is going to happen I'm gonna get me a new 'puter and a 60" plasma teevee...
A more rational approach might be to bring back the bankruptcy bill that actually discharged consumer debt. Well, that and bring back Glass-Steagall.
I'll start holding by breath right...now...
I've spent the past year and a half not buying clothes, not going out to eat, not traveling and such so I could pay off my cc debt. I have a bit left, but it should all be over and done with in the next three months. And I will never go down that road again.
If you got into badness buying items you couldn't afford on credit then you should not get any help paying your debt.
Should the credit card companies have the ability to jack up the interest whenever they want, for whatever reason they want. But if you bought a $2k tv with your cc at 11.9% interest at the time of purchase, then that is what you should pay.
It's a contract. And it's one the buttfucks anyone anywhere for no reason, except they want more money. And the consumer doesn't have equal say in the changing of the agreement
And $35-$50 is way too much for returned checks. It costs nowhere near that to process, and you don't get any speedy notification for it.
It takes my bank anywhere between 5-10 days to left me know if I've inadvertently fucked the dog. And that actually cost them thousands, when the people fucking the dog on my acct were people who were not me, but thieves the bank gave my account to.
It encourages bad debt by getting shit so out of control people say fuck it and file bnky.
I used to write off finance charges all the time when I worked in credit and saw someone struggle trying to make payments because the unexpected happened and their life was FUBARED over night.
You are funny!!
I want to know the name of every member of the House Banking Committee that voted for that stupid bankruptcy bill, that made it almost impossible for individuals to declare personal bankruptcy, and also allowed the banks to jack up interest rates, even into the 30s percent range, if a customer was even one day late on a payment.
I've had credit card bills come showing my payment, but because it posted one day "late" the credit card company tried to increase my interest rate from 7.9 to 24 percent. I screamed bloody murder and got it changed back, but only because I had a 12 year history of paying on time and I told them I'd transfer my balances if they did that.
I betcha Maxine Waters didn't vote for the bankruptcy bill.
But I want to know who on that committee did. And I want them OUT.
http://projects.washingtonpost.com/congress/1...
Actually it's the entire body's vote, not just committee members.
Bluegal. A truly noble cause. Similar legislation was passed north of your border last year with nary a peep from the media, so nobody really knew much about it. As it stands, if you are cashstrapped and miss one of your credit card payments, the company has the right to increase your interest rate immediately by as much as 5% at a time. Sad, huh? As for bankruptcy, up here it depends on your income. If last year you made 50,000 dollars, and your debt is less than 100 grand, you can claim bankruptcy, but you still have to pay back a portion of your debt.
That happened to me a few years ago and I told them to fuck off and moved my balances over too one of the other 10 applications that came that month. Haha.
If I was young and had plenty of time to rehabilitate my credit and these assholes raised my interest rate to 30% or something I would be out shopping and shopping and then tell them to fuck themselves. If you get your rate raised that high the time needed to rehabilitate your credit after going bankrupt will be shorter than it would take to pay that son of a bitch off. Also you will be better off in the the long run because you will be forced to pay cash for everything for a few years and you will learn that you will save a lot of money that way. We really have got to learn to live within our means. The majority of the blame does have to go to the banks though, because they practically forced people to max out their credit cards.
If you want to stimulate the economy and give a huge middle class income boost forgive student loans. People who took out student loans generally used them for a worthy purpose, one they wouldn't have had to finance in most other western Democracies. Yet many can't afford to pay them back and maintian a middle class lifestyle
The fact that the loans aren't dischargeable in bankruptcy is downright criminal. The whole idea of catching poor and middle class 18 to 25 year olds and saddling them with life time amoounts of debt which they can't pay back absent a windfall, and which affects their credit and standard of living for thirty or more years is criminal.
I am 42 and still pay over $1000.00 a month on my student loans, while trying to pay for services for my autistic child. I can never extricate myself from this debt and will probably die owing money to Sallie Mae.
OUCH! I thought my old student loans were bad. Here the going interest rate is prime plus 5%. Some help that is to students.
these credit card companies want you and i to be late. i heard an NPR segment on this recently. this guy called in and said he was late a couple days two times within a year. his interest rate went from 9.9% to 24%. i understand he's late so did he but 14% increase. the usury law thingee has be changed.
It's borderline criminal. You signed a contract, but they have the right to change the contract whenever they want to, and you have absolutely no say. Ever hear of them lowering interest charged on customers that never miss a payment? Doesn't happen.
these assholes call you a 'Deadbeat' That's the official nick name given by people in the credit industry to people who use credit wisely and never incur extra charges.
but want to feel like a deadbeat? Be late on a payment or miss one and listen to the calls on your answer machine. Rude is not the word to describe them. You'd swear life is over and the world just ended! Finance gurus and economic experts tell you to either call them first, or make an arrangement with them if they call to help you. Ya, right. They don't give you that option.
.
you came to your senses!! I just knew you were too damn smart and feisty to be in that racket!!
Let me guess, outsourced to Pakistan or India like every Canadian listed credit card company??
i tried to negotiate my interest rate and change some demographic info. the person i was speaking to was in the philippines. having my wisdom teeth pulled was easier and less painful.
Where mine are from, just know they don't speak english or very little. All they know is...payment due date, and when you send? LOL
I inherited money, and my employer dumped the union, of which I was a very active member (negotiating team).
And a year or so later, they moved their offices to Denver, because Washington wouldn't allow no bank banks, which is a system that allows a credit grantor with its own credit card system to issue bank cards in their name, Nordstrom Visa or Sears Mastercard.
I actually worked at a place that allowed me a lot of independence in judgment. A lot of the people I dealt with were crime victims, and in special circumstances, where they were liable (Their obvious junkie kid did it, the old man signed, but he had dementia was being fleeced) I would always charge the store back for the merch. And if the little stupid ass sales chicks would say "Yeah I thought there was something wrong," I'd set up and appointment with them to meet with security, and hope that would knock some of the stupid out of them.
Chase is the worst and the highest = mine went from 6.9 to 29.9. They're also the most insolent and rude.
Almost every one I know has problems with one of those three.
I encourage everyone - take your money or ck and sav. accounts out of their banks and stay with smallert banks right now.
Punish them for their actions regardless of how small your accounts are. Make a statement!
When a credit card company charged me a $40 late fees and raised my rates by 15% after I had ONE late payment in 30 years, I cut up the card into little teeny pieces and mailed back to them. Of course, I must confess to being one of those deadbeats - I only use the cards for convenience and have rarely had to pay any interest. I keep several accounts open to maintain my credit score and for emergencies. It's hard to get off the easy credit bus, but I refuse to give my money to crooks.
99.9999999% of us don't and can't understand a credit card contract. even people in the business don't understand the contracts. it's the ultimate fxxk job.
The Nation gave this guy a seriously ringing endorsement in his run for Congress, comparing him to Paul Wellstone in no uncertain terms. I'll have to keep an eye on this guy, he sounds like a true progressive, and he's running in a very crowded field. Keep an eye out for him.
Is where does the money that the credit companies lend come from?
Do they have every purchase made with real assets, or are they doing the same as a bank: only guaranteeing a fractional amount on each purchase, and depending on the customer to pay the bill eventually.
I guess, theoretically would be the same as paying a merchant with your own IOU's rather than a credit card.
Why do they get to access cheap money from the fed, and charge a ridiculous amount for the privilege? Theoretically, couldn't we all be able to access the fed for money at the same interest rate.
And why do we need to access our own currency at an interest rate? If I had certain assets, I should be able to force the fed to give me to exchange my assets for liquid dollars without having to pay anything in interests, since I am really not borrowing anything....
Banking always struck me as the ultimate rip off...
Transaction goes through, merchant pays a slight fee too the the cc company for use of the medium, individual holds the asset and bank/cc issuer hopes you pay... :-P
ummmmm you mean like a debit card?
Since January, (after they had received their TARP money), I've had two companies notify me they were raising my rates. They actually said there was no reason other than "we are trying to stay profitable" . So basically their business is going under and they expect me to bail them out (again).
One company I was able to talk them into putting the interest back the other's cust serv. guy just said "If you don't like it, all you have to do is cancel your card" so I did.
Still blows though, the fact they can just say, we're raising the interest for NO ACTUAL REASON.
In reply to this and to a few other comments like it I say that because the Congress is pretty pissed off at the banks and all it may be the perfect time to get Congress to start changing the rules to a much fairer deal. Like putting a cap on interest rates at about 18% and not letting them raise your rate unless you have not paid your bill in about 6 months. Of course if you don't pay your bill you wouldn't be able to use your card until you got your shit together. And if they offered you more than twice or three times your annual income and you had to go bankrupt you would not be forced to pay them no matter what (they should not have given you the credit in the first place unless they really really really thought you were good for it because of your previous record (or something like that.
Yes I think it may be a good time to get this thing rolling to change some of these screwed up rules now that we are partners with the banks. Since they want to borrow money from us its about time they played by OUR rules. Call you congress person.
omg........that's the best laugh I've had in a long time. My Representative is a decent guy, but I get the same baloney pre-printed replies all the time...and they have NOTHING to do with what I am asking/talking about.
It IS time they played by OUR rules. Past time...however, they just keep changing the rules...
I believe you'll find (AMEX) did a little dance to get at the "PRAT"** funds as well...
Snip - "It isn't clear if the application under the Troubled Asset Relief Program [TARP] came before or after AmEx got Federal Reserve approval Monday to become a bank-holding company."
[ http://seekingalpha.com/article/105817-amex-t... ]
**Tarp in hindsight, spelled "PRAT"
prat: n. Slang 1. The buttocks. [Origin unknown] :-/
PS. Spread yur cheeks :-P
Spencer Bachus, III
U.S. Representative, Alabama’s 6th District
[ http://www.govtrack.us/congress/person.xpd?id... ]
>08:30min [ http://www.cspan.org/Watch/watch.aspx?MediaId... ] :-(
I have several credit cards, and over the last three months, I have gotten "change in your credit card agreement" letters on all of them. They have raised rates by about 5% across the board. Fine, since I use a formula based on the interest rate in calculating payments, the balances will be paid off sooner, and new balances probably will be paid off monthly. LESS money for them. Killing the goose...
How about bringing back the interest deduction for credit card debt? And some regulation about what these companies can charge. Interest rates are at an all time low yet credit cards are 18% or better.
Had an overage of what the 'insurance' wouldn't cover for my husband's test. The hospital wouldn't accept the fact that I refused to pay 28 - 30 per cent interest to cover it with my cc....and I wasn't about to 'check out their finance dept' for it either. For crying out loud, why should we pay extra to them?
Ended up with a damn collection agency filing. No kidding. Got it paid off in just over a year. But that collection agency thing has rankled me ever since.
I have half a mind to write to the damn CEO of the hospital and let him know (I'm sure he knows) just what his 'billing department' is practicing in the way of intimidation, etc.
People used to laugh at me for not having a credit card. But who's laughing now? Oh yeah, the frigging bankers.
That's why I don't have credit cards. All my life I've watched my parents, friends and relatives struggle with those damnable things. When I first got married, we got one, and the ensuing 15-year nightmare made me swear NEVER AGAIN. If I can't afford it, I either save up or I don't buy it. Simple as that.
Credit cards are nothing but financial slavery. Anyone who signs up for that is a fool.
my wife and I have a joint acct card with Capitol One. We use it for almost all purchases including groceries in order to earn mileage points, hoping to get that free airline ticket to......somewhere. We pay the card off in it's entirety every month, have never been late, NEVER. They just jacked our rate from 9 to 17%. Usurious fuckers.
though if everybody did as you, what/who would pay for the cc system? A standard annual fee maybe? Something must support the medium.
When you use a CC at a store, the store pays a fee back to the CC company.
But if you listen to these exchanges carefully, she has turned several answers on their heads in her recaps.
These banks should not be given money if they are providing jobs overseas when there are millions of Americans that would be willing to accept these jobs. Taking tax payer money and sending jobs overseas while Americans are losing jobs is Economic Treason
Of course if one of the CEOs was black, she would defend him to the hilt.
Maxine Waters: Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines. [Raines would barely avoid prosecution for fraud.]
As the saying goes:
If you owe somebody $10,000 they own *you*.
If you owe somebody $10,000,000 you own *them*.
Individual consumers are getting screwed while the bankers are dictating terms to the government. How unsurprising.
The purpose of raising the rates is to keep consumers indentured, permanently enslaved with debt that cannot be repaid.
I cannot believe they allow this idiot to talk. everytime she opens her mouth, she shows how stupid she and the people who elected her are.
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