Banksters Always Win

(Cartoon found at Think Progress)

Here's one for the books.  I shouldn't have been shocked (even I'm not that naïve), but I certainly was.  I chalk it up to the meds I'm on.

Sometimes people get themselves into financial trouble; sometimes it's even their own fault.  Credit scores pretty much zero out as bills remain unpaid, cable access gets cut, cars get repossessed.  And even when the crisis is over and the poor slob either declares bankruptcy or somehow struggles out from under the financial load, that credit score is still ruined until someone is willing to extend a little credit, even a small amount, and that loan is paid off.

Unfortunately, that's when the less scrupulous of lenders swoop in.  "Pay Day" lenders are the best known, but bank owned credit card companies can sometimes be nearly as offensive.  To my knowledge, the most egregious scam has been the offer of a card with a relatively small amount of credit available but which also required a "membership" fee and charges exorbitant if not punitive interest rates.  Soon the poor debtor is right back where s/he started.

But wait ... there's more!

At least one credit card company has found yet another way to traumatize vulnerable debtors, and this one is a doozy.

Mike Lazarus points out this latest outrage from one such "EZ" credit sources in the Los Angeles Times.

From Mike's column:

Ding-dong, Cap One calling.

Credit card issuer Capital One isn't shy about getting into customers' faces. The company recently sent a contract update to cardholders that makes clear it can drop by any time it pleases.

The update specifies that "we may contact you in any manner we choose" and that such contacts can include calls, emails, texts, faxes or a "personal visit."

As if that weren't creepy enough, Cap One says these visits can be "at your home and at your place of employment."

The police need a court order to pull off something like that. But Cap One says it has the right to get up close and personal anytime, anywhere.  [Emphasis added]

Mike checked with a lawyer and apparently this clear invasion of privacy is probably  perfectly legal.  The constitutional right to be secure in our homes, our right to privacy, applies only with respect to government entities such as the police, not to civil organizations.

But wait ... there's even more!

Incredibly, Cap One's aggressiveness doesn't stop with personal visits. The company's contract update also includes this little road apple:
 
"We may modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose."
 
Now that's just freaky. Cap One is saying it can trick you into picking up the phone by using what looks like a local number or masquerading as something it's not, such as Save the Puppies or a similarly friendly-seeming bogus organization.
 
This is known as spoofing, and it's perfectly legal.

Perfectly legal, even if not exactly consumer-friendly.  But, hey! there's a bank involved. ...

Kudos to Mike Lazarus and to the L.A. Times for yet another great bit of reporting.


 

Not Really

(Political cartoon by Matt Bors and published 3/12/13 at the Daily Kos.  Click on image to enlarge and then kindly c'mon back.)

There's all sorts of news to pick from:  the selection of a new pope, the saber rattling by North Korea, Karzai's temper tantrum, and the "good" economic news in this country.  The stock market is up and unemployment is down.  It's the last item which concerns me today.

Yes, the Dow Jones is up, higher than it's been since Obama took office in 2008.  And, yes, national unemployment figures are down.  As Matt Bors illustrates in his cartoon, however, all is most definitely not well.  Dean Baker explains why (via Eschaton).

More than five years into the downturn, it doesn't take much to get people excited about the state of the economy. The Labor Department's February employment report showing the economy generated a better than expected 236,000 jobs and the unemployment rate had fallen 0.2 percentage points to 7.7% was sufficient to get the optimists' blood flowing. Unfortunately, they are likely to be disappointed.

First off, if the 236,000 jobs number sounds good to you, then you probably are not old enough to remember the 271,000 number reported last February, or the 311,000 number reported in January of 2012. The strong winter job growth in 2011-2012 was followed by a dismal spring, in which job growth slowed to a trickle. ...

The drop in the unemployment rate is also not as good news as it may initially seem. The Labor Department reported that 130,000 people left the labor force during the month – so they are no longer counted as unemployed. The percentage of the adult population that is employed (the employment-to-population ratio, or EPOP) was unchanged at 58.6%. This is just 0.4 percentage points above the low hit in the summer of 2011; and it is unchanged over the last year.  

While the unemployment rate has fallen back by 2.3 percentage points from its peak, reversing more than 40% of its increase, the EPOP is still down by 4.5 percentage points from its pre-recession level. The drop in unemployment is much more the result of people giving up the search for employment and leaving the labor force, than it is of workers finding new jobs. ...

In short, we have an economy that had been growing at a not-very-healthy pace through the second half of 2012 – and which is virtually certain to be slowed by contractionary fiscal policy through the rest of 2013. Unless there is a rapid reversal of policy, the 7.7% unemployment rate is likely to represent a low we may not see again for some time.    [Emphasis added]

Yes, some folks are doing well, but most of us aren't, and won't be if we fall into even more austerity-driven cuts.  What we need are jobs, and if takes a budget deficit for a few years to accomplish that, then so be it.  We've seen what the contractionary policies have done to the EU.  There is no reason to believe the US will be any different unless we come up with a different approach.

Congressman Ryan and Senator McConnell don't seem to care (no surprise there, eh?) and will be pushing for steep cuts to programs which would make jobs available.  McConnell is already pushing for a vote to defund Obamacare and Ryan will be pushing for destruction of Medicare for those 55 and younger, all to save money so that the Wall Street Banksters can continue to rake in the dough.

Get your dialing fingers warmed up.  It's time to let your congress critters and the White House know what we think of these plans.

Too Big To Jail

(Editorial cartoon by Joel Pett, published 10/1/08 in the Lexington Herald-Press, and found here.  Click on image to enlarge and then please return.)

It's been a bumpy couple of months for banks.  For Wells Fargo and HSBC, it also looks to be a bit expensive.

Wells Fargo is the target of a couple of law suits.  The first is a "private" law suit which claims the bank has failed to live up to the settlement agreement of a class-action suit.

Legal filings last week claimed Wells Fargo failed to provide wide-ranging reductions of loan balances to delinquent borrowers as it had promised two years ago when it settled a combined national class-action suit. A bank spokeswoman strongly disputed the claim, saying it was riddled with errors.

The litigation illustrates how lawsuits continue to dog major home lenders more than five years after the mortgage industry imploded, including recent challenges to certain cases the banks thought had been put to rest.

The second suit has been filed by  a U.S. Attorney and looks to be even more serious.

The U.S. attorney in Manhattan has accused Wells Fargo of defrauding a government-backed mortgage insurance program, in another major civil case brought in the wake of the housing bust and financial crisis.

The mortgage-fraud suit, filed by U.S. attorney Preet Bharara, seeks "hundreds of millions of dollars" in damages for claims the U.S. Department of Housing and Urban Development has paid for defaulted loans "wrongfully certified" by Wells Fargo.

The suit alleges the San Francisco banking giant falsely certified loans insured by the government's Federal Housing Administration.

“As the complaint alleges, yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance," Bharara said in a statement.

Adding "accelerant to a fire," Bharara said, was Wells Fargo's bonus system that rewarded employees based on the number of loans it approved.

This case, like the first, was brought in civil court, even though it appears the US attorney has some decent facts to prove the fraud.

 Unlike the cases against Wells Fargo, HSBC was nailed in a criminal investigation.

British banking giant HSBC will pay $1.92 billion to settle a wide-ranging investigation by U.S. authorities into money laundering at the bank.

In a deferred prosecution agreement, confirmed by the bank Tuesday, HSBC will undergo independent monitoring for five years as it puts in place safeguards to make sure it does not again become a conduit for illicit transactions. ...

A deferred prosecution agreement is a less severe punishment than criminal charges.

In other words, nobody at HSBC and nobody at Well Fargo is going to jail for their malfeasance.  I find that a bit discomfiting.  Bernie Madoff went to jail.  And Ken Lay was convicted but died before he could be imprisoned.  Why not someone (or someones) from either bank?  Can banks hide behind their corporate shield even in criminal matters?

If so, than contrary to Mitt Romney's opinion, at least some corporations are not people, especially if they're big enough and rich enough.

But Wait! There's More!

(Editorial cartoon by Joel Pett / Lexington Herald-Leader (September 17, 2012) and featured at McClatchy DC.  Click on image to enlarge and then get back here.)

Yes, yes, I know:  I used this cartoon before.  But it continues to be a great illustration of how life is rigged against most of us.  Besides, this post is an update from an earlier post, one that reported on how the banksters of JP Morgan Chase are scamming those of us in California.  In that post I noted how our energy costs were being manipulated by JP Morgan, based on a very nice column from Michael Hiltzig.  Well, Hiltzig has updated  his column and it appears that the banksters are still at it.

We all know what corporate law firms are for, right? To represent their clients' interest fairly and professionally, of course. To obfuscate, obstruct, delay, misdirect — sometimes that too.

So the saga of JPMorgan Ventures Energy Corp. and a slick little two-step it engaged in with its two law firms to fend off the Federal Energy Regulatory Commission bears exceptional interest, not least because its outcome may hint at a new approach to enforcement by that long-overmatched agency.

To put things in a nutshell, JPMorgan's electricity trading operation was accused of bid-rigging by the California Independent System Operator, which manages much of the state's wholesale power market through regular auctions. We explained in an earlier column how the alleged scheme in 2010 and 2011 may have cost California ratepayers as much as $200 million.

California's ISO and FERC decided to do more than issue a gentle "tsk-tsk, bad bankster" slap on the wrist, so JP Morgan's lawyers decided to play nasty (see Hiltzig's summary) and filed a lawsuit against FERC.  They did something stupid, however.  They misstated the law in their pleadings.

This month FERC opened a new front in this battle. The commission charged that JPMorgan, with the assistance of its lawyers, gave it the runaround when it asked for financial information in connection with its investigation. According to FERC public documents, JPMorgan dodged the request for months and then provided misleading and incomplete information.

How ticked off is FERC? It's proposing not to fine JPMorgan over the information exchanges, but to suspend its right to participate in the California auction. To an electricity trading firm, that's a nuclear attack. The last electricity wholesaler that got its trading rights revoked was Enron — after it went bankrupt.

If FERC follows through, JPMorgan would still be allowed to sell electricity in California, but would be allowed only to collect its costs plus a nominal profit. That's likely to be a fraction of what it could make by bidding in the open auction, and it could drive JPMorgan out of the market.

"When a company is faced with significant sanctions, not just a financial slap on the wrist, it's going to take it seriously," says Tyson Slocum, director of the energy program at the Washington public interest group Public Citizen. "No longer is a violation just a calculated risk, and a cost of doing business if they get caught."   [Emphasis added]

Well, hallelujah!  About freakin' time!

Of course, all of this could have been avoided with a reasonable regulatory scheme in California that would have allowed providers to "collect ... costs plus a nominal profit", but apparently our owners are not willing to allow that to happen (see Hiltzig's current column).  Our owners much prefer the "open market" approach  (for obvious reasons).  The next best option is to remove the opacity from the process, which is the least we should be pushing for.

...even if one accepts that auctions are the best way to set wholesale rates, California's system of allowing bidding to take place in secret is a failure.

"Everything should be totally public, with none of the intense secrecy in California, and the track record is not all that good," says Robert McCullough, a Portland, Ore.-based energy consultant. He says the secrecy of bidding in California has made this state's power prices consistently higher than in states that require public bids, like his own.

Are you listening,  Sacramento?  And Washington DC?

Granny Bird Award: Simpson-Bowles Enthusiasts

This edition of the Granny Bird Award (given from time to time to those who go out of their way to damage elders' rights and benefits) goes to those who continue to support the disastrous Simpson-Bowles "Grand Compromise", including those Democrats who have sold their souls on the issue.

After nearly a year of exposing the Simpson-Bowles report (which did not get the support of the Super Committee of which it was a part) for what it was, a gift to Wall Street, you'd think it would be dead. You would be wrong: vampires and the undead are in this year.

Fortunately, there are still people who are paying attention, people like Michael Hiltzig of the Los Angeles Times who notes that the report always brings to mind that classic cartoon sequence of Wiley Coyote, treading air, as he jumps off the cliff to catch the Roadrunner.

Is it that the debate over when and how to cure the federal deficit has reached new heights of cartoonish inanity? That we are now being treated to finger-wagging about the need to get our fiscal house in order by corporate CEOs like JPMorgan Chase's Jamie Dimon (trading loss $5.8 billion and counting, potential cost to ratepayers from alleged manipulation of the California electricity market $200 million and counting).

Or is it that the remedies for the deficit always seem to involve cutting taxes for the top 1% of U.S. income earners while cutting Social Security retirement benefits (average monthly check: $1,230) for everyone else? ...

...there's still reason for most Americans to fear the deal-making aimed at avoiding the fiscal cliff. For one thing, the debate seems increasingly to be driven by the wealthy, who can be trusted to protect their own prerogatives while declaring everyone else's to be wasteful. Just two weeks ago, a squadron of CEOs and bankers, including Dimon and hedge fund billionaire Pete Peterson, lined up behind a campaign to impose adult supervision on our squabbling Congress. ...

The Simpson-Bowles plan has inexplicably become the starting point for deficit cutters in both parties. House Minority Leader Nancy Pelosi (D-San Francisco), who in 2010 pronounced a draft version "simply unacceptable," more recently has signaled that she'd support it. [Emphasis added]

Say what?

A plan to cut Medicare costs by forcing the elders to pay for vouchers for care they've already paid for by withholding taxes the past 30 or so years? Pelosi is in favor of such a plan? She'd garner votes in the House for that?

But, again, there's more:

In any environment of serious debate, Simpson-Bowles would be dismissed out of hand. Praised for its sober bipartisan spirit, it's a compendium of flatulent platitudes ("We all have a patriotic duty to make America better off tomorrow than it is today"), vague prescriptions ("cut all excess spending" and "avoid excessive taxation" — as if reaching broad agreement on the meaning of "excessive" is a snap), and the occasional nostrum that earns a "not" on the gonna-happen scale (strip down the mortgage-interest deduction). According to some estimates by the nonpartisan Tax Policy Center, the plan's sample cuts in the tax deductions wouldn't replace the revenue lost to its proposed reductions in marginal tax rates. ...

The single program getting the bulk the Simpson-Bowles plan's attention is Social Security, which in fact contributes not a dime to the federal deficit, and can't by law. Something else is at work here other than deficit reduction: It's a plan to cut benefits to seniors by ratcheting back on inflation protection and sharply cutting the benefit formula for everyone, starting with those whose average lifetime earnings are $9,000 a year.

What's riskiest about Washington's peculiar approach to deficit cutting, which erodes the programs most important to working Americans while preserving those enjoyed by the wealthy, is that it could sap the resolve of President Obama and his Democratic colleagues to end tax cuts on high levels of income while extending them for average and low-income earners. [Emphasis added]

Hello?

Once again, this "Grand Compromise" gives everything to the Wall Street Banksters and their 1% owners and nothing to the rest of us. We didn't cause the financial melt-down. Social Security didn't screw up the economy. Why is this set of lies still getting any currency?

Hiltzig has a response to that:

...as much as corporate CEOs and other privileged incumbents claim they're concerned about the future, it's their future they mean.

Exactly.

Maybe it's time we start insisting that our future, and that of our children and grandchildren, the ones who will actually be paying for this nonsense, receive some attention.

Enron-ed Again

What is it that makes California such a prime target for monkeying with the power supply? It's size? It's large population? It's lax regulatory agencies? It wasn't all that long ago that Enron manipulated our power, leading not only to power outages but the recall of a governor. Now, according to Michael Hilzig, it's JP Morgan Chase manipulating our power and its cost.

The next time your electricity bill prompts you to curse your local utility, here's another target where you should direct your anger: JPMorgan Chase & Co., which has manipulated the California energy market for its own profit and at a cost to residents and businesses in the state that could be $100 million, $200 million or much more.

That's the accusation leveled by the California Independent System Operator, which has jurisdiction over 80% of the state's electrical transmission. The ISO, a nonprofit corporation controlled by the state government, estimates that JPMorgan may have gamed the state's power market for $57 million in improper payments over six months in 2010 and 2011.

But that could be just the tip of the iceberg: The bank continued its activities past that time frame, according to the ISO. It also says JPMorgan's alleged manipulation could have helped throw the entire energy market out of whack, imposing what could be incalculable costs on ratepayers.

And, sad to say, it's possible that the manipulation was done legally because of the rules in place.

Here's how the game worked:

The alleged scheme involves two related wholesale electricity markets maintained by the ISO. There's the day-ahead market, in which power plant owners place bids to provide power for the California electricity grid in the future; and the real-time market, an auction market through which ISO buys electricity for immediate distribution to homes and businesses.

To give plant owners an incentive to participate in these auctions, ISO guarantees to cover their costs for starting up or running their plants at a minimal level, even if their bids aren't accepted. This is known as "bid cost recovery." ISO rules allow bidders to claim payments of up to twice their real costs.

In simplest terms, JPMorgan submitted bids in the day-ahead market that were so low the firm was certain to be accepted onto ISO's roster of potential electricity suppliers — in fact, they were negative bids, essentially offering to pay ISO to take their electricity. The bidding is overseen by software, not human beings, and the automated program isn't smart enough to distinguish a real bid from a potentially fake one. (Implausible as it may seem, there can be legitimate reasons for a power generator to submit a negative bid, but they don't apply to JPMorgan.) ISO believes that JPMorgan never intended to make that sale, but the beauty of its low bids was that they made it eligible to collect bid cost recovery payments.

The next step was for JPMorgan to make sure that ISO didn't actually buy its electricity, presumably because the profit margin from the bid cost recovery claim was greater than from actually selling energy. So in the real-time market, it priced its electricity so high that ISO wouldn't buy it.

The bottom line, the ISO says, is that JPMorgan's traders never intended to sell it electricity via these bids. The scheme, it says, seems to have been designed purely to capture a bid cost recovery payment the bank didn't deserve, at a rate that was inflated anyway. [Emphasis added]

The game worked for as long as it did because the computer wasn't designed to catch that kind of behavior. It might have worked even longer if JP Morgan hadn't gotten greedy and got the kind of returns that a human finally noticed. The state ISO changed the rule involved, but the brains at the bank found yet another loophole to take advantage of. And a new game ensued just a few days later.

All of this might have been avoided if Glass Stiegel hadn't been repealed. Banks would be in the banking business, not the power business. And the banks have no reason to back out now because they know the feds will fine them far, far less than they made in the scam.

It makes me want to scream.

Friendly Persuasion

I'm still in a snit over Jamie Dimon's visit to the Senate last week. It was like old home week, and, all things considered, I guess that's understandable. Dimon has given plenty of money to campaigns (mostly Democrats), and his company, the one that lost $2 billion gambling at the paper casino, has also been very generous to various congress critters. Open Secrets provides some details on that generosity and other connections the Wall Street bank has with Congress, especially the Senate Banking Committee.

Combined contributions from JPMorgan Chase PACs and employees favored Democrats from 2002-2008, before trending Republican in the 2010 elections and, thus far, in the 2012 cycle as well. Those numbers do not, however, tell the full story, as donations from JPMorgan Chase's PACS -- which are officially on behalf of the corporation -- typically swing Republican. JP Morgan's main PAC for candidate contributions has favored Republicans each year since 1996, with the exception of a near-tie in 2002. A second company PAC has focused on contributions to Republican-aligned PACs and party committees in 2010 and 2012.

JPMorgan Chase has been relatively non-partisan in its giving to Banking Committee members, however. Its PAC money has found its way to all but six of the committee's senators. While Daniel Akaka (D-HI) and Herb Kohl (D-WI) are both retiring and have no need for campaign funds, Robert Menendez (D-NJ), Pat Toomey (R-PA), Michael Johanns (R-NE) and Jeff Merkley (D-OR) have all faced reelection from 2008-2012 and have had to do without support from JPMorgan Chase's PACS.

Besides campaign contributions, JPMorgan Chase has other ways to grease the wheels with the committee: Naomi Camper, currently the co-head of the bank's federal government relations group, was an aide for committee Chair Tim Johnson from 2001-2004. Additionally, Kate Childress -- who The New Republic credited for spearheading a campaign to weaken the proposed regulation of derivatives during the 2009 debate over financial reform -- was a staff director for the panel prior to joining JPMorgan Chase as a lobbyist.

That's some history, eh?

No wonder we can't get any decent regulation of Wall Street and the banks.

Not So New News

I'm posting David Horsey's cartoon and comments not because it contains a startling new revelation but because it points to a serious problem affecting far too many people in our nation.

A couple of weeks ago, JPMorgan Chase & Co. revealed losses on risky investments that, thus far, total more than $2 billion. It seems that, even after the near-death experience of the 2008 global financial meltdown, hotshot investment bankers at JPMorgan were rolling the dice and betting enormous amounts of other people’s money on high-risk ventures.

Then, after Facebook’s first public stock offering fell far short of expectations, it was revealed that Morgan Stanley, the bank that managed the IPO, had quietly warned big investors that buying into Facebook might not be such a great idea. More modest investors, as always, were left out of the loop. ...

In years long gone, this sort of behavior would not have mattered quite so much to the public at large. Wall Street was a place for men in striped suits with money to spare; it was not a place for the typical working man. But, over the last couple of decades, the financial lives of the majority of Americans have become enmeshed with the ups and downs of the market.

Many have bought into mutual funds, an affordable and supposedly reliable way for the small investor to reap a little profit from the bigger investment game. Many have also become investors, whether they like it or not, as pension plans have been replaced by 401(k) schemes. This change seemed like a sensible step considering the trajectory of the stock market in the 20th century. [Emphasis added]

And that's the point. The Wall Street banksters are walking away with no penalties, while the rest of us are suffering more than just bloody noses. It is one thing to acknowledge that Wall Street is a crazy casino, it is another to acknowledge that we are being forced to bet in that tilted venue with no recourse, at least no recourse that looks reasonably forthcoming.

Horsey's conclusion captures our dilemma nicely.

It is as if the U.S. financial system is a churning ocean on which the captains of finance rove in their treasure ships while the rest of us are left to drift in tiny vessels, surrounded by sharks, with no oars or compasses or clues about how to find safe harbor.

This.

How Unsurprising

So, it looks like Mitt Romney is going to be the Republican nominee for president this November. He's gotten endorsements from the Old Guard (George H.W. Bush) and the New Guard (Marco Rubio). He's also raking in the money from a totally expected source: Wall Street.

Let there be no doubt where Wall Street's political loyalties lie: Of all the money the securities and investment industry has poured into the 2012 presidential contest so far -- to the candidates and the super PACs behind them -- an unambiguous 92 percent has gone to the GOP, according to a new Center for Responsive Politics analysis.

And in so doing, the securities and investment industry is betting hard on the candidacy of one of its own: Mitt Romney.

Between his campaign committee and a monster super PAC supporting his candidacy, Romney has benefited from about 72% percent of the near $33 million Wall Street has contributed through February. [Emphasis added]

Bundlers and individual donors alike have been throwing every penny they can in Romney's direction, and when they get maxed out, they can rely on Citizens United to allow them to throw a whole bunch more.

Wall Street seems to have found an even more welcoming receptacle for its largesse in Restore Our Future, a super PAC founded by a manager of Romney's 2008 presidential campaign, which is spending millions in an auxiliary effort to propel Romney to the Republican presidential nomination and eventually into the White House.

Wealthy executives and corporations in securities and investment have contributed about $16.5 million to Restore Our Future -- more than twice the amount they have sent to his campaign. Such donors are taking advantage of a new political landscape that was reshaped by recent federal court decisions, such as the 2010 Supreme Court-decided Citizens United vs. Federal Election Commission, which allows more money from more sources to fund hard-hitting political advertisements. [Emphasis added]

President Obama: are you paying attention?

All that love you showered on the banksters doesn't seem to be reciprocated. I hope you aren't too surprised. I know I'm not, and I'm just a dirty hippy.

Another Reason To Hate B of A

Marcos Breton has a gut-wrenching commentary featured at McClatchy DC. It's about an undocumented worker who came to the US as a teenager, got a job as a dishwasher in a restaurant. He worked hard and gradually worked his way up in that kitchen. He paid taxes, opened a bank account, saved his money, married and had children born in this country. He bought a house. And then things went horribly wrong.

Martinez had been a Bank of America customer since 1996. One day 11 months ago, he got a call to go to his branch in Marysville, where he now lives after residing for years in Sacramento, to discuss his accounts.

It was so routine, Martinez took his 6-year-old daughter with him.

When he arrived, the police were called. He was detained in an office at the bank branch, he said. ...

During a routine background check, his undocumented status was discovered and he soon found himself in a federal immigration jail in New Mexico.

He spent two weeks in jail, and his deportation case, so huge is the backlog, is set for June 2013.

Mr. Martinez, who committed no crime after arriving in this country, got ratted out by his own bank. Because he was unable to contact his employer about the arrest, he was fired for absenteeism. His house went into foreclosure, which was stopped only when a couple of lawyers stepped up for him and filed suit to stop those proceedings, but because of the long wait before his case gets heard, it is unlikely that Martinez will be able to work to support his family.

But wait, it gets even worse:

Oh, and according to Martinez's lawyers, Bank of America is still holding his money.

Go read the whole column. Then, after the nausea passes, if you still have a B of A account, seriously consider whether you want to enrich those leeches further.

Oopsie!

It's amazing what a little press coverage and a little consumer push-back can accomplish. Even the mighty banksters sometimes pay attention.

From an AP article on the new debit card fees:

On Friday, Bank of America bent. A source at the bank, who asked not to be identified because the policy is still evolving, said it likely it will offer ways for its customers to avoid debit card fees through using direct deposit, maintaining minimum balances or using Bank of America credit cards.

And it's not just Bank of America:

The retail banking arm of JPMorgan Chase & Co. will stop charging $3-per-month fees for using debit cards when its current pilot in Wisconsin and Georgia is completed in November, a source with knowledge of the bank's plans told The Associated Press. The individual asked not to be identified because the bank has not officially announced the program will not go forward. ...

And it's not alone in rethinking its actions. Wells Fargo & Co. began a similar pilot in five states on Oct. 14, testing a flat $3 fee for using debit for purchases. On Friday it also announced that it is cancelling its test program.

What happened?

Well, banks just are not in high favor right now, as the Occupy Wall Street movement has made clear. People of all ages and most political persuasions are not happy that these mega-corporations got bailed out with government funds while the rest of us are scrapping just to put food on the table. It didn't help that with the taxpayer monies, banks and their upper management are making more money than ever before while the rest of us are not making any money or making considerably less.

As soon as the press reported on the new fees, the outrage meter went past the red zone and customers threatened, and many actually followed through, to move their accounts to credit unions or to banks who hadn't yet implemented the change.

I think this is a significant and a hopeful sign that masses of people have had enough. $60 a year doesn't sound like much, but it is a symbolic slap in the face to the 99% of us for whom any extra costs are burdensome. We've had enough.

Now, if we could just keep pushing back, we might get somewhere.

MoneyMoneyMoney

Michael Lazarus is at it again. This time it's the Republican efforts to shield the banking industry from any meaningful oversight.

There can be only two possible reasons for Republican lawmakers' steadfast opposition to a Consumer Financial Protection Bureau.

One: Maybe not a single GOP member of Congress has ever had a problem with his or her bank, credit cards, mortgage or car loan, and thus sees no need for additional oversight of financial institutions.

Or two: Maybe GOP lawmakers are responding to the millions of dollars spent by the U.S. Chamber of Commerce and the financial services industry to undermine a new government agency intended to rein in abusive lending practices.

Now there's a tough call, eh?

Just in case, however, Lazarus cites a few facts, among them this:

It's not surprising that Republican lawmakers are doing their darnedest to shield banks from additional scrutiny. In the 2010 campaign cycle, individuals and political action committees associated with banks gave nearly $19 million to federal candidates, committees and parties, according to the Center for Responsive Politics.

The vast majority of that money made its way to GOP recipients, the center found.

What puzzles Lazarus is that the constituents of these congress critters haven't raised the roof because of their choice of banksters over the rest of us. After all, bank abuse doesn't just happen to dirty hippies. Lazarus concludes that the facile "too much government ... we don't need another agency" combined with a lack of media interest in the subject have met for the perfect silence.

To the first issue, we need only point to the fact that the current system had been so thoroughly gamed by banking interests that our entire economy went down the tubes, where it remains. We should have learned that real oversight was necessary or these thugs would continue to rip off the rest of us.

To the second, we need only point to the silence of the press. It's attention span is even shorter than ours, and may in fact be the reason we don't pay attention.

Fortunately, David Lazarus is paying attention.

Ubi Sunt?

Once again, Los Angeles Times business columnist David Lazarus asks the right questions and provides some damned good answers. His subject today is the push for financial reform in Congress.

He cites the Republican's objections to the plans being discussed by the Democratic majority and notes how nearly identical they are to the objections being voiced by the banking community (no surprise there). Then he launches into a righteous rant on what we really need to make certain we never get suckered by the banksters again.

Actually, what we want to do is set up a system whereby the government does what it was supposed to do all along, rather than sitting idly on the beach as the sharks go into a feeding frenzy. ...

Where were financial authorities while Goldman Sachs was allegedly defrauding investors by selling securities without telling anyone that they'd been largely designed to go down in flames?

Where were they as Washington Mutual handed out home loans to virtually anyone with a pulse and then resold the toxic debt to others, exacerbating the mortgage mess and leading to the largest bank failure in U.S. history?

Were government officials even awake as Lehman Bros. hid $50 billion in debt from bank examiners and investors with dubious accounting tricks before going bankrupt? ...

The three main agencies overseeing consumer finances — the Office of Thrift Supervision, the Office of the Comptroller of the Currency and the Federal Reserve Board — have left people largely to fend for themselves as banks have indulged in what can only be characterized as sociopathic behavior, heedless of any sense of right and wrong.

It's time to make some repairs.

Legislation that's already passed in the House and is now pending in the Senate would do this. Among other things, the Senate bill would:

• Consolidate the consumer-protection responsibilities of half a dozen federal agencies into a single Consumer Financial Protection Agency with the resources to regulate mortgages, credit cards and other consumer products.

• Create a Financial Stability Oversight Council responsible for identifying and monitoring risks posed by brain-freezingly complex financial products and corporate structures.

• Establish new regulations for derivatives, the complicated and risky financial instruments at the heart of the mortgage meltdown.

• Impose new requirements on hedge funds worth more than $100 million. Such funds are currently responsible for huge financial transactions but operate mostly outside the regulatory framework.

Are all of these bullet points contained in the plan the Democrats are pushing? Of course not, but it's the plan that we actually need. At this point, the Dems are doing a little tap dance with their Republican counterparts just to get some reform bill passed in time for the November elections to show that the Democratic Party is for the little guys. After that, maybe the issue will be revisited (you know, kinda sorta like healthcare reform).

The important thing, however, is that at least the Democrats are actually talking about the need for government to get back to the business of regulating the sociopaths whose greed needs constant feeding. If they pass a bill which does at least that, weakly or strongly, that's a nice start.

Why? Because They Can

David Lazarus, business columnist for the Los Angeles Times, pointed out a rather interesting coincidence in his latest offering:

Vikram Pandit, chief executive of Citigroup Inc., thanked taxpayers the other day for coming to his company's rescue with $45 billion in bailout cash.

"Citi owes a large debt of gratitude to American taxpayers," he told lawmakers in Washington. The bailout money, Pandit said, "built a bridge over the crisis to a sound footing on the other side."

And how is Citi expressing its gratitude for that act of taxpayer generosity?

It's slapping a $60 annual fee on many credit cards that previously had no fees and telling customers that if they don't like it, tough patooties. They can pay off any outstanding balance and take their business elsewhere.

Man, if that's Citi when it's grateful, I'd hate to see the company when it's cheesed.

Recent changes in the rules for banks offering credit cards have the banksters scrambling to find ways to keep the profits obscenely high, and this move by Citi is obviously one of the ways chosen. The other credit card issuers will no doubt fall in line with the move (if they haven't already). Is it legal? Apparently so. All that is required is that the issuers advise their customers of the impending change in understandable English (which is, by the way, an improvement).

Now, my first response to reading the lines quoted above was that Citi's credit card holders should just up the card and return it to Citi with a note to place said mutilated card just north of its corporate anus. Ah, but here's the rub:

Linda Sherry, a spokeswoman for the advocacy group Consumer Action, said canceling an older card that reflects long-term creditworthiness can indeed have an impact on your credit score.

"You might see your FICO score go down by as much as 100 points," she said.

Consumers are now between a rock and a hard place, especially if they have been diligent in making their payments in order to have the kind of FICO score which would make obtaining a home mortgage possible. A drop in the FICO score caused by a cancelled account may mean a huge jump in the interest rate for that mortgage, or even an outright rejection. A lowered credit rating also affects the interest on loans for lesser purchases (a car, e.g.) and on the interest charged by other credit card issuers, so Citi has a double whammy working.

That said, however, Ms. Sherry still thinks that if people are not currently shopping for a new home or a new car, working to re-establish that creditworthiness over the next year or so after canceling the Citi card just might send the right kind of message.

Maybe the loss of a 10,000 credit card holders in California would grab Mr. Pandit's attention. Losing 100,000 customers nationwide most certainly would.

Spending Our Money

On Saturday, I posted on Billy Tauzin's retirement from the lobbyist business. He was apparently nudged out by his bosses at PHARMA for giving away too much in the negotiations with the White House on health care reform. Apparently lobbyists shouldn't be quite so liberal with the big corporate dollars, even if those dollars did buy some pretty generous concessions from the White House.

PHARMA isn't the only lobbying group in DC doing business these days. The banksters we bailed out have gone full tilt in making sure there are no bothersome regulations put into place that will save us from another financial meltdown.

From the Los Angeles Times:

Even as the financial industry has sought to keep a low public profile, some of the country's largest banks have ramped up their spending on lobbying to fight off some of the stiffest regulatory proposals pending in Congress.

Lobbying expenditures jumped 12% from 2008 to $29.8 million last year among the eight banks and private equity firms that spent the most to influence legislation, according to data compiled from disclosure forms filed with Congress.

The biggest spender was JPMorgan Chase & Co., whose lobbying budget rose 12% to $6.2 million, enough for the firm to have more than 30 lobbyists working for it. Among other banks, spending on lobbying rose 27% at Wells Fargo & Co. and 16% at Morgan Stanley.

"I have never seen such a scrum of bank lobbyists as I have in the last year -- and I've worked on quite a few bank issues over the years," said Ed Mierzwinski, a lobbyist for the U.S. Public Interest Research Group, a coalition of state consumer organizations. "It seems like everybody is out of work except for bank lobbyists." [Emphasis added]

The whole point of the proposed legislation is to prevent the insane financial nonsense that drove up bonuses but drove down the economy. When the banks received hundreds of billions of taxpayer dollars to keep them afloat, the White House and Congress quickly discovered that the mantra "too big to fail" just did not sit well with an electorate that lost homes and jobs in the recession deepened by the shenanigans of banks and Wall Street. Once the government got the message, some attempt, albeit a half-hearted one, to rein in the financial institutions was put into play. Apparently those financial institutions didn't get the same message.

The intensified efforts on Capitol Hill have come as banks, facing unrelenting anger over the financial crisis and government bailouts, have avoided publicly resisting a push to reform the industry. Many of the firms even reduced campaign contributions by their political action committees last year. And three big banks that have faced especially heavy public criticism -- Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc. -- cut back or held steady on lobbying last year.

But the increased spending by other firms -- as well as by industry groups -- suggests financial firms are making their voices heard more than ever.

"Despite the decline in credibility with the public, the banks appear to have increasing power" on Capitol Hill, said Travis Plunkett, a lobbyist with the Consumer Federation of America. [Emphasis added]

Congress now has a dilemma: the mood of the electorate is, to say the least, sour and an election looms for a goodly number of those currently serving. It will be interesting to see just whom those in Congress will choose to serve.

The Banksters' Revenge

David Lazarus tossed a whole bunch of furniture at the banking industry in his latest column. Apparently the recent consumer protection legislation drafted to outlaw some of the more egregious practices of the banksters annoyed them. Their response was hardly surprising.

Happy new year. Now pay up.

That's the message from our friends in the banking industry, who are introducing all sorts of fees and changes as a slew of regulations take effect designed to make financial heavyweights friendlier to customers.

From costlier checking accounts to higher credit card fees, banks are scrambling to find ways to compensate for as much as $50 billion in annual revenue that could be lost because of the tougher rules and requirements. ...

... banks are cheesed because lawmakers are showing some uncharacteristic backbone when it comes to consumer protection, and they're turning the screws because, well, they can.

Never mind that just about all the big guys in the banking world are still on their feet primarily because taxpayers stepped in with billions of dollars in bailout cash. That's ancient history.

Now it's all about making up for the money that used to spill into bankers' pockets from arbitrary rate increases and practices such as automatically signing people up for overdraft protection -- and then nailing them with fees whenever a transaction went over the limit.

That's a pretty accurate assessment from where I sit. My own small community bank got involved in some of the shenanigans with respect to imposing over-draft protection. Because it is small, however, a quick phone call advising that I wasn't interested in the service, so they could remove it was all it took. I imagine a lot of other customers who don't read the fine print as obsessively as I do didn't make that call until they started getting hit with $35 over-draft charges imposed on top of the $25 rubber check fee.

But, as Mr. Lazarus points out, there's more in store as a result of the new legislation:

Some new regulations, such as requiring 45 days' notice for any significant credit card changes, were introduced last year. Others, including limits on rate increases and new disclosure requirements, take effect next month.

In response, many banks have been lowering the credit limits of millions of customers and raising rates. They've also been switching fixed-rate cards to variable rates that won't be subject to the new rules and imposing "dormancy fees" for plastic that doesn't get a regular workout.

The banking industry assures us that it's not a matter of revenge, it's just the need to cover their costs. Baloney! It's just a desire to make as much money off the rubes as they did the last few years before the bubble burst, more money, if possible, so that the shareholders stay happy and keep approving those generous salaries and bonuses. Mr. Lazarus spotted that as well:

I love that banks are saying this is merely the free market in action. Where were all those market forces when these guys were making staggeringly reckless investments in mortgage-backed securities, or when their losses started running into the billions of dollars?

This isn't about market forces. This is about good-old-fashioned greed, and the need to keep shareholders placated as the banking industry tries to adjust to a new era of transparency and scrutiny.

I hope Sen. Chris Dodd gets emailed this article (wink-wink). Now that he doesn't have to worry about re-election, he just might get serious in pushing through a legislative package that addresses the greed and fraudulent practices of an industry the taxpayers just spend hundreds of billions of dollars to bail-out.