Bail out Banks Hike Credit Card Fees

[malaise]

At what point will the elected representatives scream USURY and lock up these criminals. They are borrowing from taxpayers and now robbing them blind.
Corporate robbery has to stop.

from GEM$NBC

[AndyA]

1. I've heard a few elected reps discussing this, but they don't seem to be doing much

about it, do they?

Nothing will stop consumers from spending money like high credit card interest rates and fees. It sure seems like usury to me.

[Coyote_Bandit]

2. Having usury laws

would require that banks actually assess creditworthiness - and refuse credit to some.

Far easier for the spineless dumbshit bankers to make credit freely available to all at a usurious rate which will both provide a reasonable return and underwrite the losses incurred on credit which ought not to have been extended in the first place.

At least three things need to happen:
(1) usury rates need to be re-enacted and set with upper limits somewhere around 15%;
(2) every bank that issues credit or generates a loan should be required to retain a substantial portion of it instead of packaging it for sale and retaining only the commission for generating the financing; and
(3) every stock broker, investment manager, retirement manager, mutual fund manager, etc should have their compensation firmly tied to account performance.

[malaise]

3. how can banks borrow money for less than 1%

and lend it to people for such exorbitant rates

[Coyote_Bandit]

4. Bankers are thieves

and they have forgotten how to actually earn money.

Used to be that banks paid all their expenses and earned money based on the difference between what they paid depositers and what they charged borrowers. Using that difference, they paid their workers reasonably well and often had training programs where workers had an opportunity to advance. Banks had to attract depositers and keep them happy and secure enough to leave their deposits - and they had to assess the creditworthiness of their borrowers.

Now banks make money by using money. They make a loan and collect a commission by selling it to another bank rather than retaining the risk. They charge depositers exhorbitant fees for everything - and seem oblivious and uncaring about depositer unhappiness and turnover. And they make money by lending to other banks who need to meet deposit requirements.

When banks had an opportunity to expand into additional financial services they went into mortgage lending and investment services rather than insurance. Interesting choice. That meant they could churn mortgage loans just like they did student loans - issuing the loan and then selling it off to another financial institution to assume the risk of collecting. The banks added all sorts of investment management and transaction fees for their investment and brokerage clients. Insurance? It is still regulated with respect to rates and capacity to issue policies based on the issuers creditworthiness and asset holdings. The banks weren't willing to meet those reserve requirements. Money should, after all, be used and circulated to generate more money. The banks chose to go with high cash flow activities that enabled them to manipulate the funds (often lending and selling amongst themselves) and generate fees rather than diversifying into an area that would have required greater financial responsibility.

Our current banking system is a frickin house of cards.

[nichomachus]

6. Because they are required to by law

Corporations are required by current corporations law to maximize profits for their shareholders. Any other consideration is against corporate law and the directors could be sued for doing anything -- such as concern for people, the community, the environment, etc. -- that does not maximize profits. If they could borrow the money for zero percent and lend it for 1,000 percent, they would have to.

We desperately need to change corporate law, so that this travesty won't/can't continue.

[lyonn]

5. They were discussing this on CNBC this a.m.

One member of the group, forgot his name, the bald one that is usually against anything Larry Kudlow says, was speaking harshly about this issue. Banks get loans for practically nothing and hammer the card holders. You are right, robbing us blind without blinking.

[jazzjunkysue]

7. My big box bank tried and failed: I said I'd cancel and they back tracked.

I still get offers every week for new cards.