Too big to fail banks even bigger

“J.P. Morgan Chase, an amalgam of some of Wall Street’s most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.”

Article:

Another Wells Fargo overdraft manipulation class action

“Wells Fargo juggles accounts to extract maximum, and unfair, overdraft fees from its customers, a class action claims in Houston Federal Court.”

Article:

More banks in trouble

“Citing data obtained under the Freedom of Information Act requests, the paper said The Office of the Comptroller of the Currency (OCC), along with the Federal Reserve, have issued more memorandums of understanding so far this year than in all of 2008.

At the current rate of at least 285, the Fed, OCC and Federal Deposit Insurance Corp are in line to issue nearly 600 of these secret agreements this year, the paper said, compared with last year when 399 such agreements were issued.”

Article:

BofA sued for late fee policy

So a man goes into a Bank of America branch on the day payment is due and makes a payment which is accepted by the bank.  Guess what?  His next statement claims he didn’t pay his minimum payment in a timely manner, charges him a $39 late fee and rescinds his promotional interest rate.  Other customers have similar difficulty paying their monthly payment without incurring late fees whether through the website or by phone.

I heard a Fresh Air show awhile back about how banks monkey around with late fee dates and the like so they can aggressively charge customers these late fees.  When a customer calls and waits to talk with a customer service representative, these fees will typically be waived.  The credit card expert on Fresh Air explained that the banks know they don’t have a leg to stand on with these practices but they also know that if they make customers wait on the phone for more than twenty minutes its likely the customer will hang up and pay the fee.  These practices are calculated into the cost of doing business and it turns out (no surprise) that the banks make hefty profit margins by cheating and frustrating customers.

Complaint courtesy Courthousenews

171 banks on “Problem List”

“The government identifies problem banks as institutions on the brink of failure, facing severe financing difficulties and management issues. ”

Article

Credit card crisis next?

Powerful anonymous email that Joe Nocera posted on his New York Times blog.  Joe says its from an anonymous banker who sees the credit card debt as the next meltdown.  That’s not news but the powerful part of the email is this section:

“I received a catalog today from Casual Living and in big bold print on the front page, it said “BUY NOW, PAY NOTHING”. Then in significantly smaller print underneath, it said, (until April). That mantra has been sung throughout the credit markets over the last 10 years. The banks waive a carrot in front of the consumer and reel them in and encourage them to go deeper and deeper into debt. They do this by prescreening customers through credit reporting agencies, mailing offers to apply, and to transfer balances at teaser rates or zero percent financing. They base it on credit score and not on capacity to repay. A good credit score does not equate to the ability to repay debt.”

Isn’t the world upside down when the banks, who knowingly entice consumers any which way they can to borrow money, are bailed out but these consumers only recourse is through punitive bankruptcy procedures?

Three more failed banks today

One of them is in Georgia and two are in Southern California which makes twenty two for the year.

PFF Bank and Trust, Pomona, CA

Downey Savings and Loan, Newport Beach, CA

The Community Bank, Loganville, GA

Check here  to keep track and learn the details.

Banks Getting Letters with “Powder”

Maybe if banks still looked like this, things wouldn't be so bad

Lots of anger out there:

The Federal Deposit Insurance Corp. today issued an alert to banks, credit unions and brokerages regarding threatening letters.

The alert reads:

“The FBI, the U.S. Postal Inspection Service, and state and local authorities are investigating more than 30 threatening letters that have been received by financial institutions in California, Colorado, Georgia, Illinois, New Jersey, New York, Ohio, Oklahoma, Texas, and Washington, D.C. Most of these letters contain a powder substance with a threatening communication. At this point, field and laboratory tests on the powder have been negative. Financial institutions that receive one of these letters at any location should contact their local FBI office and ask for the WMD Coordinator.”

Courtesy of Sacramento Business Journal