Banks Raking In Billions In Penalty Fees Ahead of New Regulations

[tomm2thumbs]

Run time: 02:12 https://www.youtube.com/watch?v=3CbivTdmmfI   Posted on YouTube: April 19, 2009 By YouTube Member: Views on YouTube: 0   Posted on DU: April 20, 2009 By DU Member: tomm2thumbs Views on DU: 989

 

And we wonder why banks are showing profits this week?

[EnviroBat]

1. This is going to be interesting. We'll finally get to see the

extent to which the banks control our government when all of this "tuff talk" turns into hot air. Congress will capitulate with it's tail between it's legs on this one. We will once again be disappointed and screwed. Anyone remember the bankruptcy bill?

[florida08]

2. sure Larry sure

Have had a Sears credit card for years and rarely used it. About a year ago they suddenly upgraded us to a gold M/C. We used it recently at Sears. I paid it off finding out my rate was 17% and it's backed by Citibank. So now that card is cancelled. Watch your statements folks. They rarely warn you of a rate hike. Capital One raised it too after years at 9%. When I called then to cancel it they decided to lower it back. Let them know you don't need their stinking credit..you can find smaller banks that will be glad to extend you credit at the right rate.

[MedioGringo]

3. There's talk of making the new regulations retroactive

But God help you if you default on your student loans. Bankruptcy won't save you and they can take your social security check if you don't pay up. Pretty fucked up.

[DLnyc]

4. Okay, it's been a while since I took Economics 101. But aren't prices

supposed to go down when demand drops? The story says credit card usage is "down 9.7% in 2008", but the banks are charging higher rates and fees. What's up with that?

Answer: Modern corporations are large enough that the idea of competition is a joke. Even if there is more than one corporation in a market, they generally collude tacitly or explicitly on prices. But, since their share prices are determined by short-term profit, when demand goes down they have to raise prices to keep the same profit picture. Of course, they'll then go belly up about a year later when demand drops to near zero, but the execs will have sold off billions in stock and pocketed more billions in bonuses before that happens.