While there are a lot of people you can blame for the state of the US economy, government regulators are at the top of the list. So it’s satisfying that someone has finally taken them to task. Elizabeth Warren, finally on the Senate Banking Committee where she belongs, had some hard questions for banking regulators yesterday, specifically on why they are happy to accept pennies on the dollar to settle claims against banks.
What she got in response was a lot of hemming and hawing by the spineless regulators in question, none of whom seemed to know the last time anyone took a bank to trial.
I’m a little concerned that too big to fail has become too big for trial.
I’ve always liked the introduction to the Fair Debt Collection Practices Act.
There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
I don’t think it goes far enough, though. Abusive debt collection practices also spread depression and contribute to the number of suicides. That’s true for the current foreclosure crisis, as well, according to Martin Andelman, who blogs at the Mortgage Lending Implode-O-Meter. He thinks homeowners are showing signs of Legal Abuse Syndrome, a type of Post-Traumatic Stress Disorder.
The Fed decided to expand the CARD Act’s limit on fees charged to credit card holders during the first year of an account to include fees charged before the account was opened, and the banks used to halt enforcement by the Consumer Financial Protection Bureau. And so far, the banks are winning.
As Consumer Law & Policy Blog’s Brian Wolfman points out, “This decision may be the first addressing the validity of a rule enforced by the CFPB. No doubt there will be many more, as the banks try to extricate themselves from as many CFPB regs as possible.”
Force-placed insurance is an insurance policy your mortgage service picks out when your homeowners insurance policy expires. It can cost up to ten times more than a regular homeowners policy, in part because mortgage servicers are often getting kickbacks and other incentives due to self-dealing.
Big banks “routinely treat their customers like shit, offer terrible services, and use inscrutable fee schedules to make billions of dollars per year from worthless fees alone,” according to Ramit Sethi. He’s right, of course. And big banks are gearing up new fees to make it impossible to bank without piling up absurd fees.
Fortunately, there are alternatives. Many online banks offer fair terms, convenient access, and great value. And they are getting popular. Twenty-two percent of bank customers under 30 use an online bank as their primary bank. Of those currently using a big bank, over 35% would not choose it again.
I don’t use an online bank as my primary bank. Yet. But the reasons people prefer them are pretty compelling. Free ATMs anywhere. Deposit checks using a scanner instead of making time to get to a branch. Better online interfaces. Better interest rates. And on and on.
When you subtract the culture of ripping off consumers and the overhead of brick-and-mortar branches, banking can apparently be a pleasant experience.
According to the FDIC, over 700 banks are currently at risk of going under, a huge jump over the last three years, and a bit of a shocker given the size of the federal stimulus. The FDIC has already shuttered 20 banks this year, and there is no sign that things will improve in the coming months.
Banks at risk of going bust tops 700 | CNN Money
An amusing and terrifying look inside two shady types of businesses that will fleece you every way they can, from check cashing fees to postage for a premium.
As Ben Popken says “I can’t wrap my mind around the idea of paying someone for my own money.”
Other Video | Ben Popken
Above, watch the trailer for Karney Hatch’s “Overdrawn!”, a documentary which chronicles his fight against absurd overdraft fees. In his journey, Hatch ends up talking with several AFFIL Partners as well as Ralph Nader. He currently has an action posted on Change.org (a fantastic social network) where you can show your support for H.R. 1456, the Consumer Overdraft Protection Fair Practices Act. AFFIL supports this bill, and signed on to joint Congressional testimony (PDF link) about it last week with eleven other groups. Keep Reading »
As the government moves to issuing debit cards rather than actual checks in an attempt to save money, banks are adding every conceivable fee to get some of those benefits. Even fees just to get the money. Ever see a free ATM? Call customer service, that’ll be 50 cents. How about overdraft fees of up to $20—even though they could just decline charges for more than what is on the card.
Jobless hit with bank fees on benefits | The Herald News
(photo: Wikimedia Commons)