Panel slams banks over credit practices

[gilchristfan]

I've said this for years. If person is carrying a few thousand in CC debt, and fall behind for 2-3 months, its nearly impossible for them to catch up.

Consumer Credit Counselling used to be able to help. But since CC companies decided to go to 35% interest rates after a person misses one payment, there isn't much they can do any more either.

http://news.yahoo.com/s/ap/20070307/ap_on_go_co/congress_credit_cards

An Ohio man whose $3,200 credit card debt mushroomed to $10,700 with interest and fees told his story Wednesday to senators who denounced the industry for confusing billing practices and shifting interest rates.

Executives of three major banks defended their credit card practices as responsible and responsive to consumers' needs in testimony at the hearing of the Senate <form class="yqin" action="http://yq.search.yahoo.com/search" method="post"> <input name="p" value="&quot;Homeland Security&quot;" type="hidden"> <input name="sourceOrder" value="c1,i,yn,c3" type="hidden"> <input name="c1" value="<p style=&quot;font-family:arial,sans-serif;font-weight:bold;font-size:13px;padding:0;margin-top:1em;margin-bottom:.5em;&quot;>Homeland Security</p>" type="hidden"> <input name="c3" value="<p><strong>SEARCH</strong><br /><a href=""&quot;http://search.news.yahoo.com/search/news/?p=%22Homeland+Security%22&fr=yqovly1&quot;>News</a> | <a href=&quot;http://search.news.yahoo.com/search/news/?p=%22Homeland+Security%22&c=news_photos&fr=yqovly2&quot;>News Photos</a> | <a href=&quot;http://images.search.yahoo.com/search/images?p=%22Homeland+Security%22&fr=yqovly3&quot;>Images</a> | <a href=&quot;http://search.yahoo.com/search?p=%22Homeland+Security%22&fr=yqovly4&quot;>Web</a></p>" type="hidden"> <input name="sourceURL" value="" type="hidden"> <input name="fr" value="yq-news" type="hidden"> <input name="context" value="Executives of three major banks defended their credit card practices as responsible and responsive to consumers' needs in testimony at the hearing of the Senate Homeland Security and Governmental Affairs' investigative subcommittee. Those from Citigroup Inc. and Chase Bank USA said their companies were eliminating some practices — including the one that hit Wesley Wannemacher of Lima, Ohio, with over-limit fees on his Chase card account 47 times although he went over his credit limit only three times." type="hidden"> </form> Homeland Security (http://search.news.yahoo.com/search/news/?p=Homeland+Security) and Governmental Affairs' investigative subcommittee. Those from Citigroup Inc. and Chase Bank USA said their companies were eliminating some practices — including the one that hit Wesley Wannemacher of Lima, Ohio, with over-limit fees on his Chase card account 47 times although he went over his credit limit only three times.
The interest charges and fees on Wannemacher's account more than tripled his debt despite his having made payments averaging $1,000 a year over six years, noted Sen. Carl Levin (news (http://us.rd.yahoo.com/DailyNews/politics/news/ap/ap_on_go_co/congress_credit_cards/22180772/*http://news.search.yahoo.com/search/news?fr=news-storylinks&p=%22Carl%20Levin%22&c=&n=20&yn=c&c=news&cs=nw), bio (http://us.rd.yahoo.com/dailynews/capadv/bio/ap/ap_on_go_co/congress_credit_cards/22180772/SIG=1174b4srr/*http://yahoo.capwiz.com/y/bio/?id=310), voting record (http://us.rd.yahoo.com/dailynews/capadv/vote/ap/ap_on_go_co/congress_credit_cards/22180772/SIG=11gks6fph/*http://yahoo.capwiz.com/y/bio/keyvotes/?id=310)), D-Mich., the subcommittee's chairman.
"Unfair? Clearly, I think," Levin said. He said an investigation by the panel found that "sky-high interest charges and fees are not uncommon in the credit card industry. While the Wannemacher account happened to be at Chase, penalty interest rates and fees are also employed by Bank of America, Citigroup and other major credit card issuers."

[nehemiah]

is usury a sin?

[gilchristfan]

yes.

http://www.newadvent.org/cathen/15235c.htm
(last paragraph)

Lending money at interest gives us the opportunity to exploit the passions or necessities of other men by compelling them to submit to ruinous conditions; men are robbed and left destitute under the pretext of charity. Such is the usury against which the Fathers of the Church have always protested, and which is universally condemned at the present day. Dr. Funk defined it as the abuse of a certain superiority at the expense of another man's necessity; but in this description he points to the opportunity and the means which enable a man to commit the sin of usury, rather than the formal malice of the sin itself. It is in itself unjust extortion, or robbery. The sin is frequently committed. In some countries are found the exaction of interest at 30, 50, 100 percent and more. The evil is so great in India that we might expect legal provisions to fight against such ruinous abuse. The exorbitant charges of pawnbrokers for money lent on pledge, and, in some instances, of persons selling goods to be paid for by installments, are also instances of usury disguised under another name. As a remedy for the evil, respectable associations for mutual lending have been instituted, such as the banks known by the name of their founder, Raiffeisen, and help has been sought from legislators; but there is no general agreement as to the form which legislation on this subject should take.

But then, try getting a loan from the Vatican Bank.

First born male children are the only acceptable form of collateral.

[mikgaes]

is usury a sin?

Perhaps. Or illegal. Depends. The cc companies have a habit of changing the rules of engagement after they've hooked you. Or selling your account off to another company with their own set of rules.

The Constitution was designed to empower the average citizen by it's protections. However we have just become corporate America's peons.

[gilchristfan]

Perhaps. Or illegal. Depends. The cc companies have a habit of changing the rules of engagement after they've hooked you. Or selling your account off to another company with their own set of rules.

The Constitution was designed to empower the average citizen by it's protections. However we have just become corporate America's peons.

Its done through the National Banking Act, a law created in the 30's to allow national banks the freedom to do business in all states without discriminatory practices against them by the states.

Basically, the law permits a national bank to be governed pursuant to the laws of a state where it is charted or where it has an office.

So, places like Citicorp, Chase, Sears, etc, will charter in a state like South Dakota, Delaware or Arizona (or at least open an office there), states without usury laws.

If you look in your credit card agreement, it will say something like "this agreement will be governed pursuant to the laws of the State of Arizona (or South Dakota, etc)" Your state might have usury laws, or Consumer Credit protection laws, but they don't apply.

As to changing the agreement, there is usually a provision in the Agreement that says they can change the terms whenever they want, for whatever reason. The practice became popular in the late 90's.

The solution isn't that difficult, amend the National Banking Act. But then, financial institutions have owned both parties for a while.

This is the first time I can remember that anyone in Congress has actually looked into it.

[mikgaes]

Right. So thats why so many cc companies operate out of Wilmington, Delaware.:tyty:

[gilchristfan]

Right. So thats why so many cc companies operate out of Wilmington, Delaware.:tyty:

Yup.

Actually, most corporations have historically incorporated in Delaware, due to business friendly laws.

[Bellowing4DaBills]

Interesting, I saw a Frontline documentary last night on the American Credit Card business on PBS.

I couldn't believe some of the regular folks interviewed who had money in the bank to pay off their credit card balance but didn't. Why anyone would keep paying 20%+ interest when they have the means to pay it off is beyond me.

[mikgaes]

I pay my balance to zero every month. Even if I have to forego other things.

[Bellowing4DaBills]

I pay my balance to zero every month. Even if I have to forego other things.


Credit Card companies call you dead weight. They friggin hate guys like you.

[mikgaes]

Yes. I know. http://floridasportsman.com/art/biglaugh.gif

[Mouldsie]

OT issue I need to get off my chest.... it's therapeutic....

KeyBank stole like 100 dollars from me when I was a child once. I had a kid's 'pennysaver' account for my paper route funds then my family was up-heaved and forced to move in an instant and chaotic fashion... so anyway my mom forgot to tell the bank about our new address (and I was a kid and never really thought about those things) so when they got a bank statement returned back to them they charged me a ridiculous amount of money for the returned envelope (because obviously a return to sender letter causes havoc to a bank and throws the entire business out of loop causing them all sorts of trouble). After a few months when we realized the bank had our old address still (I was in 8th grade) I hopped on my bike and went to go change it and they told me I owed them money (they had taken more from me than I had in my account)! After arguing with them I went and got my mom who threw a fit at the bank office. The nice guys that they are over there they decided to do me a favor and erase the debt and gave me an account balance of $0. Awwww how nice. They are a bunch of freaking Saints over there.

****ING DOUCHE BAG MOTHER ****ERS! WHO THE HELL STEALS MONEY FROM A LITTLE KID!?!?!?!

Anyway, I hate KeyBank now... so if you have an account with them please close it for me.... or demand that they give me back my money.

[Matt]

I have an account with Key Bank. They've hooked me up with a lot of things. I got a free I-Pod from them.

They love college students. We spend credit on everything and have absolutely no money to pay it off.

[Mouldsie]

Well we cant be friends then.


You're either a moral righteous patriot and my friend or you are a cowardly commie traitor and like Keybank.
You like KeyBank therefore we are now arch-enemies.

[Matt]

Well we cant be friends then.


You're either a moral righteous patriot and my friend or you are a cowardly commie traitor and like Keybank.
You like KeyBank therefore we are now arch-enemies.

I'll let you borrow my I-Pod?