Major banks cope with shame of being on welfare

They are the new faces of welfare: Bank of America, American Express, Morgan Stanley, PNC, and even Goldman Sachs whose name now reeks with irony.  Forget the welfare mother stereotype of the young, black, disheveled mother who carries a newborn on her hip.  Replace that image with the patriotic logo of Bank of America or the executives that call the shots --grey-haired white men, who wear Armani suites, drive the latest model of Mercedes-Benz, and summer in Martha’s Vineyard.  In other words, picture someone like… Madoff.  Check their pockets; you may just find TARP debit cards, the equivalent of food stamps. 

As they come under scrutiny from the federal government and tax-paying citizens for hoarding bailout money, some banks suddenly find themselves reluctant to ask for more funds.  It’s just not cool.  Bank of America, the colossal bank that received more bailout money than any other bank (perhaps as a kickback for its government-endorsed acquisition of Merrill Lynch), no longer lobbies the federal government for money.  I suppose $45 billion is enough. Hopefully, as pressure increases, more banks will follow suit. 

Until then, I suggest we call them exactly what they are: welfare banks. 

Comments

[Donna Johnson]

I had a similar situation with Bank of America...they kept moving the due date of my account around and I almost could not keep up with it. I went on line to make a payment well before the due date only to find out the date was the previous day...I went ahead and made my payment on-line only to have their system kick out the payment and tell me it would not be credited for another day. I made the payment and lo and behold, when I got my statement, there was a late charge and my interest rate had been increased. Called customer service to request that the lower rate be restored...treated rudely and the associate absolutely refused to help...I called back later that day and spoke to another associate and I mentioned the government bailout...he became highly indignant and advised me that he didn't intend to discuss the "economy" with me and the government bailout had nothing to do with my situation...I explained that it had everything to do with my situation....I asked how could they take money from the citizens and continue their greed and corruption by making profit at the expense of the very customers who support their business....well, I didn't get anywhere...so I wrote to the House Finance Commitee and to my congressman but BofA is not finished with me...I am going to call every day and have already planned to pay off my account and be done with them once and for all...they can raise the interest rate but I can just as easily pay off the account and then just leave it at a zero balance causing them to spend their money maintaining my account. They are crooks...always have been crooks and when more of the citizens of this country start standing up to big business, start making noise and making the government get these crooks under control...then things will get back to normal...write the government, make these huge financial institutions accountable. Make some noise...it is the squeeky wheel that gets the oil.

[Wendell Webber]

I have a similar experience with AMEX without prior notice my credit card suspended my OPEN line of credit. I have maintained a perfect payment schedule and am not in default in my business or personal life. There needs to be a major crack down on banks on what I feel is illegal behavior. I didn't create this banking problem so I shouldn't have to be part of the solution. Although since the bailout I guess we all are.

[Chet Matlosz]

I also experienced a similar fate with AMEX; having a pristine payment history, never exceeding limits, in fact never incurring any charge of any kind - they dropped my credit limit aver $7,000.00 - for no reason. But wait there is more, two months later the raised my interest rate from 8% to 13%. the only explanation I received was, well, all the banks are doing it so we are also. I chose to opt out, telling them I will not purchase anything again until the rate is restored - except there is no opt out! Basically, they get to raise my rate on past purchases, for no reason and I have no recourse!

I spent my rewards, and will not charge another damn thing to that card. I even offered to close the account to maintain the 8% - guaranteeing no charges, again - denied.
Wish I can do that to my customers - butthey would all walk!

[Luci]

My story is similar to Kevin's, great credit score, never been late and my AMEX is a biz card. The stores I usually shop are Sams Club, Office Max and restaurants like Cheese Cake factory, Chili's, Applebees, etc., places I take my clients or conduct lunch meetings (I'm a realtor). I'm incensed by AMEX and other credit card companies (and stores) who can almost double your interest rate for a late payment, or move your due dates up (several stores have done this). Credit card companies are merely loan sharks in executive clothing. They say behavior analysis, I say profiling.

[Vicki]

First of all, thanks for starting this website. Your story is shocking and American Express should be ashamed of themselves. You on the other hand, Kevin, are a class act person.

My story involves Bank of America. At their solicitation I moved a credit balance to them with the agreement of zero interest for a year. But they kept changing my due date by a few days so in order to pay according to my pay period, I had to call in the payment a day or two late. That incurred a $15.00 phone fee and a $39.00 late fee, and an increase from zero interest to 12.99% (which I accepted); however, that was not enough for them. Their greed caused them to increase my rate to 29.99%. They claim they have the right due to "the agreement." I don't care what the fine print says on the agreement. I was making my payment each and every month. I accepted the consequences of extra fees, until the interest rate jumped to 29.99% At that point I could no longer afford my minimum payment. I wrote the Bank of America executive offices. They didn't care. I wrote the North Carolina BBB. They didn't care either. BOA told them they couldn't respond due to "confidentiality issues." The BBB closed the case as resolved. It was not resolved. I wrote two congress members. One didn't reply, the other said switch companies. EXCUUUSE? That's not the issue. The issue is credit card company greed. I went to a debt management company. BOA says they don't work with debt management companies. I said “then put my interest rate back down to 12.99% they didn’t. Do they want people to pay or not? SOMEONE MUST stop credit card companies. I’m so glad BOA got forty five billion of tax payer money for a bail out – NOT!!!!!!!!!

[Melvin]

I appreciate the tone of this particular piece, as it kind of treats the bans the way alot of common bank customers feel they have been treated in the past. I personally had issues in the past with Bank of America's transaction practices of "high to low." Though I understand the rationale behind such practices, I was disgusted with theway the issue was addressed by the management of Bank of America. While I do not wish ill upon any individuals or establishments, I beleive that the current situation is reciprocation at it's maximum force.

Here's hoping for the brigter day now!

[S. Robbins]

Terrific points. I am still baffled how that much money can be directed to these companies with very few spending and return requirements and almost no equity interest.