GOP Gags Witnesses on Credit Card Woes

Thanks for this important story.

Bank of America jumped my rate from 9.9 to 24% in one month with no explanation and with no notification—I only happened to look at the rate section on my bill. When I called immediately to complain, they put me on hold for 20 minutes before they knew what it was about, then another 25 minutes after they were redirecting me. They claimed that it was in the fine print that they could change their rate at any time. This did not follow errant or delinquent behavior on my account—no late payment, no going over my limit. As far as I can tell, Bank of America is a complete bully, and greedy, as well as devious. Before this incident, they had changed the whole format of the bill, saying it was for better readability. But it was clearly worse—grey on grey lettering, smaller print. I couldn’t easily see my due date or minimum payment. Capital One also hiked my “fixed for life” rate from 9.9 to 23%.

It’s up to Washington to make sure that the banks can’t constantly increase the squeeze on the working class, and the working middle class. The free market run rampant leaves democracy far behind. Congress has a chance to negotiate btwn capitalism and democracy.

To Nikkym: You’re story is not rare. Another would-have-been witness at yesterday’s hearing, Christy Mylar Smith, said her husband had used his CitiBank card for 10 years without paying late or exceeding his credit limit. But after two late payments in one year (one made just hours late, as the couple was returning from a vacation), the rate jumped from 12.9% to 32.5%—without notification.

Marvin Weatherspoon, mentioned in the article, took out a $12,000 loan for home repair bills in 2000. At the time, the rate on his BoA card was $4.25%. Today, it’s nearly 25%. Though he’s made the minimum payment each month, he’s paid down only $800 of the loan’s principal in eight years. (This is a guy who, after working for 28 years at the Chicago Convention Center, makes $17.26 an hour.)

The banks and the Republicans want regulators—not Congress—to make the reforms, though historically the Federal Reserve regulation (Reg Z) they’re referring to has simply dictated what disclosures card companies must make to customers. As New York Rep. Gary Ackerman (D) asked yesterday: What good is disclosure “if all it does is tell you how many ways the card will screw you?”

Advocates recommend that consumers relate any horror stories to their congress members. Consumers Union has a spot on its Web site to log complaints, as does the Service Employees International Union. Another spot is Consumer Action (www.consumer-action.org), which is the group that brought Christy Mylar Smith to Washington.

CREDIT CARD COMPANIES IN AMERICA

I have had excellent credit for the past twenty years. In fact the credit card companies, American Experess, JP Morgan Chase, and Bank of America have sent me letters extending my credit limits. And then it all came to a crashing halt!

We missed a house payment due to a computer glitch at our home mortgage bank. The new escrow amount was finally straighten out, 8 months later with all penalities and fees removed. MidWestern Financial Credit Union Bank of Ann Arbor refused to take the one late payment off our record. They would not admit any culpibility. J P Morgan Chase and Bank of America jacked up my credit card rates under the “Universal Credit Default” clause which allows on late payment from a spouse with joint ownership of an asset such as a mortgage to be used to raise all credit cards to the maximum of 24.95% plus penalities yielding 32% total. (Michigan)

After months of discussions and letter writing to the credit card report services and to Bank of America and JP Morgan Chase settlement finally evolved. Bank of America agreed with me and returned my rate to its original lower amount. The Credit reporting Services agreed with me and took the blips off my record. On the other hand, J P Morgan Chase sued me for the full amount pluse $2,000 in additioanl fees. We settled one week before trial with J P Morgan taking $6,000 less than the original amount owed. J P Morgan Chase wrote off the entire $25,000, that’s a savings of 35% from their corporate taxes, the lawyers got there juicy cut, and I got a lesson in legalized loan sharking, outrageous usury, and unethical behavior. OF COURSE it will take 3 years to repair my credit. Our congress and the President imposed these new credit card rules in 2005 as part of the Bankrupcy Laws Reform. (some reform?) In my opinion, it is unconstitutional at both the State and Federal levels, but this takes thousands dollars to buy the lawyers necessary to right the ship of justice. Signed: “Discusted Senior Citizen”

Many horror stories like the ones written above – thank you all for sharing. Once read about this low key Fed_gov agency, US Office of the Comptroller of the Currency(OCC), that is responsible for the banking industry. From what I have read, many times they acted in unison with banks rather the good of the general public at large.

http://www.occ.treas.gov

I did a search and came up with this link:

http://www.pirg.org/consumer/bankrupt/bankrupt2.htm

On the Senate side, Sen. Chris Dodd is very interested in these issues as the Chairman of the Banking Committee.

http://www.truthaboutcredit.org/

USPIRG and the Student PIRGs have teamed up with the SEIU to discuss credit card abuses at a Town Hall meeting with US Congressman Barney Frank and Massachusetts Attorney General Martha Coakley. Share your story of abusive credit card practices and sign up to attend the meeting, which will be held on March 19th, at 9:00 am, at the SEIU Local 615, 26 West Street, 3rd Floor, Boston, MA 02111.

U.S. Senate Committee on Homeland Security and Governmental Affairs
Permanent Subcommittee on Investigations

http://hsgac.senate.gov/index.cfm?Fuseaction=Hearings.Det…

Title: Credit Card Practices: Fees, Interest Rates, and Grace Periods
Date: 3/7/07
Time (EST): 10:00 AM
Place: Dirksen Senate Office Building, Rm. 342
The Permanent Subcommittee on Investigations has scheduled a hearing entitled, “Credit Card Practices: Fees, Interest Rates, and Grace Periods.” It is the first of several Subcommittee hearings that will examine a variety of credit card practices that raise concerns. This hearing will focus on how credit card issuers apply interest rates and fees to consumer accounts. It will examine, for example, how credit card issuers select and apply interest rates and, for consumers carrying a balance forward, eliminate grace periods for repaid debts. It will also analyze high fees charged for late payments, over-the-limit charges, and other matters, including how those fees are assessed, how they add to interest costs, and how they contribute to consumer debt. In addition, the hearing will examine an industry practice requiring consumer payments to be applied first to balances with the lowest interest rates instead of to balances with the highest interest rates. The hearing will draw, in part, from a September 2006 GAO report detailing the finance charges, fees, and disclosure practices associated with 28 popular credit cards.

This is so expected of the Republicans: Take care of big business and their constituents be damned.

Can someone please explain to me how the minority party is allowed to require waivers before witnesses are allowed to testify before a committee? It would seem to me that the chair of that committee could have easily overruled such a blatant attempt to stifle the testimony.

Unfortunately, it appears the Democrats on this committee are just as complicit in this as the Republicans. Either that or they are just completely spineless.

You know, like with the impeachment thing…..

mmtrask—I see you found Mike’s followup post over at The Independent Streak (our staff blog). For anyone else interested, here it is:

http://www.washingtonindependent.com/view/questions-of-wa…

Everyone that has credit cards knows very well that you are constantly getting new cc offers and transfer offers. The sad part is that the cc holders never enjoy interest rate cuts. The soon to come credit card bubble is going to be much larger than the housing bubble.

Two questions:

1. How can the Republican minority impose this waiver requirement over the objection of the Democratic majority?

2. Did the Repubs also insist that the credit card issuers sign similar waivers, making the details of their financial condition and interest rate decisions public for all to see and comment on.

I’m pretty sure the answer to 2 is a resounding “no.” What the hell is the answer to 1?

Why not ask this panel’s Republicans to disclose how much they got from the credit card industry and their lobbies in campaign contributions. Like the sub prime scam that has not only victimized many in America to lose their homes by unconscionable mortgages (and causing a much larger financial crisis for the nation as a whole by causing further lose of thousands upon thousands of jobs and of billions in investments in a plummeting stock market, etc.), the credit card industry (a monopoly on top of all else) has had the White House, Congress, government agencies like the Office of the Controller of the Currency and even the Supreme Court rig the game for them to fleece the American consumer. They did this by wiping out usury laws of the several states in a single Supreme Court decision legislating from the bench; undermined the bankruptcy laws by predatory laws to defeat them to prevent people from getting out of crushing debit (even Hillary Clinton as first lady got Bill to veto the bill but she voted for it a Senator because she needed the campaign contributions from the industry); under the guise and pretext of Executive Branch jurisdiction of the OCC have prohibited and blocked suits by the Attorneys General of some 48 states for numerous and systemic abuses and frauds in the credit industry within their respective states without any meaningful action by the OCC (Their token case was Providian in California); and deregulation of the predatory banking industry to set lose a hungry monster to pray upon the public at its own will.

Frontline, a PBS program aired a recent episode (on channel 13 here in NYC) called The Secret of The Credit Card. If it was not aired in your area, or you missed it, you can log onto the web at PBS.org and to be sure to find it type in a NYC zip code when asked for your zip. There you will find a computer rebroadcast, and the transcript of the program along with other related information.

America has become too reliant on credit cards just to make ends meet. That is the absolute last reason to use credit at all. If you can’t make ends meet, as it is, you most definitely will not be able to with added interest and penalties that build and compound fast. You will pay far more for your purchase than you thought you would on the sticker price. Our government and the Federal Reserve through monetary and fiscal policy regulate the printing of new money and the availability of money to curb inflation which in general is too much money competing for too few goods which makes the price of all goods go up. When they publish the Consumer Price Index it does not include the estimated 70% added on by credit card interest and penalties. Credit cards defeat that purpose because they create money that does not exist but on paper (not paper money itself). It is spending now money one does not have yet, and might not even get if jobs are lost or catastrophic events like a divorce, a medical crisis or some other unforeseen event obstructs one’s income and/or finances. The best thing that the people can do for themselves is to cut up those credit cards and deal on a much safer cash and carry basis. Our government has obviously refused to help us so we need to help ourselves. We might also rethink our voting habits too. If they hadn’t backed to outsourcing of millions of jobs from America it would not be so hard to make ends meet in the first place.

This is also why we need universal health care. 50 million do not have health care at all and also everyone else is underinsured with insurance company loopholes that get them out of paying claim at all or refuses to cover people because of preexisting conditions or as risks for things like being overweight. As a result people are left in catastrophic debt when struck with catastrophic illness and huge medical bills they could never pay. The American people are also unemployed or underemployed because of job outsourcing too. This country is in an economic crisis and Bush wants to continue spending billion upon billions of taxpayer money on an immoral and unnecessary war in Iraq. Have we all gone mad!

Ah yes. So here we are in America in 2008. Contracts mean nothing, unless they mean something. And the individual has no responsibility, until congress wants them to testify and then they have righteous anger. And congress wants to “do something” wich invariably means doing something bad. And them it comes to “health care” which some Americans in 2008 believe is a right, not a choice. With the level of economic illiteracy in this country, I’m almost surprised I haven’t heard that “housing” or “food” or “cars” are rights.

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