Tag Archives: financial institutions

Banks Charging through Loopholes to Rip Off the Poor!

New Orleans   Every time we think we might be surprised at the avarice of major financial institutions, we are reminded that in the real world, there are no limits either to greed or the willingness for banks to rip off anyone available including preying on desperate, poor families.   More sickening evidence was available in a story in the Times on how big time banks are trying to exploit loopholes in consumer protections and the regulations covering payday lenders by stealing from the poor.

The hammer hit the nail early in the story:

An increasing number of the nation’s large banks — U.S. Bank, Regions Financial and Wells Fargo among them — are aggressively courting low-income customers alike … with alternative products that can carry high fees. They are rapidly expanding these offerings partly because the products were largely untouched by recent financial regulations, and also to recoup the billions in lost income from recent limits on debit and credit card fees.

The story carried a picture of a fellow who had borrowed $1000 to pay for medicine for his cystic fibrosis where he paid $100 in fees and stands to pay even more if he’s late on payments.  If that doesn’t make you want to do something between weeping and pull down a wall with your bare hands, then there is just plain something wrong with you, and please immediately see someone for that.

The loophole is that legislation regulating payday lenders does not apply to the big boys, so they are trying to grab what others can no longer touch.  Payday lending has been a huge campaign for ACORN Canada, so this leads me scurrying back to make sure we didn’t leave this backdoor unlocked in the Great North.  Spokespeople for the newly organized Consumer Financial Protection Bureau were reportedly looking to see if any of this was out of whack, but I’m afraid that will be a vain search.

It goes without saying that some banks won’t think twice about steering lower income customers towards more expensive products.  Can you say “subprime mortgage loans!”

Many of these scalawags charge costly fees for transactions on “prepaid” cards.  These are cards loaded by the holder with cash money so there is NO RISK.

There ought to be a law but there probably won’t be one at the federal level.  In some place maybe a state might be willing to shut the loophole.  In other it will simply be another sad, tragic example of business as usual which in cases like these ought to have the same criminal penalties as grand theft robbery has.


Opposition for the Rich, Support for Activism

New Orleawall-street-protrest-occupy-wall-street-eat-the-richns The polls have to be giving the middle-of-the-roaders and the settle-for-the-best-we-can folks some pause when the lines are hardening against the scandalous income inequality in America wrought by one tax break after another for the rich and the increasing support for the Occupy protests and other expressions of frustration and rage spoken by any willing the voice the people’s true feelings.  Other indications are that the vast mobility of the young, long a defining characteristic of America, slowed to a screeching halt because of the Great Recession and the deepening frustration of a generation lost and the risks associated with future expectations and job losses.  The opposition to the status quo is going to increase as the resentment of the young accelerates.

Among the numbers popping up everywhere a Time Magazine/SRBI poll referenced by Charles M. Blow of the Times indicated that 54% of those polled are responding “favorably” to the protests.  86% believe that “Wall Street and lobbyists have too much influence in Washington.”  79% hold that “the gap between the rich and the poor in the U.S. is too large.” 71% believe – listen to this President Obama and Secretary of the Treasury Geithner – “Executives of financial institutions responsible for the financial meltdown in 2008 should be prosecuted.”  68% have finally decided that “The rich should pay more taxes.”  And, finally, given the deep cynicism more than half, 56%, believe the “movement will have no impact on American politics.”

At the end of last year the well respected Center for Budget and Policy Priorities reported that the income inequality in the United Stated had hit record highs since such reporting was documented.  During the period covered in the late 2010 period income at the top had risen by $180,000 and at the bottom by only $400.  The gap may be even larger at the end of this year.  Last week another study found that the income inequality in the United States now leads all other industrialized nations in the world.    What a sorry situation!

The only real surprise these days is that the polling data doesn’t indicate even more consensus that public policy slanted towards avarice and the rich has gone too far.  Little is being done to change it so, politicians and policy makers are obviously going to keep waving a red (green?) flag in our faces until we stand up and force the change.