Frankly I couldn’t believe what I heard on the news when President Obama, in an interview, called bankers into the White House to seek their help with the economy – having referred to them the day before as “Fat Cat” bankers. Hum…the President of the United States resorting to labeling people in less than a professional manner. Perhaps it is just his folksy style, but that type of approach seems much less than presidential. But then I got to thinking…
Seems like in this administration there was some effort to curb the abuses that the banks have hurled at consumers when it came to credit cards. That, for everyone but the banks, was hailed as “about time” legislation. Ethically, the banks have played less than fair with consumers. Personal example…my wife, who has spotless credit had a Bank of American card with a zero balance and substantial credit limit, received a letter from BofA increasing her interest rate to 22.9% from 8.9%. She called asking why and was told it was a mistake, but one that could not be undone. After expressing her deep dissatisfaction and then vowing (after she got off the phone not to ever use the card), she got a letter from Bank of America (just a week later) cutting her credit line by 75%. Ethical actions by Bank of America – yea right.
According to Money Magazine senior writer – Donna Rosato – “Lawmakers gave issuers till February 2010 to fully comply with the new law. Meanwhile, issuers have rushed to raise interest rates, impose new fees and cut credit limits. The median rate on credit cards surged 13% to 23% from December 2008 to July 2009, according to a study by the Pew Charitable Trusts. Meanwhile, a bill to expedite the credit card reforms, the Credit Card Rate Freeze Act, has gone nowhere. When the new law kicks in in 2010, consumers will have more protection.”
Maybe the term “Fat Cat” Bankers was justified.
Ah…but there’s more.
Fortune Magazine states:
What Ken Lewis wanted, Ken Lewis got. During his eight-year tenure as Bank of America’s CEO, he embarked on a dizzying series of acquisitions to create the nation’s biggest financial services company.
But when his last two big buys — toxic-mortgage giant Countrywide and dead-on-its-feet bank Merrill Lynch — drew too much scrutiny from regulators and shareholders, Lewis packed up his golden parachute last October and bailed.
Maybe I should be a bit kinder in my blog. Perhaps after squandering Bank of American funds on losing propositions, they needed the rate increase on credit cards. Of course, that assumes that folks use those credit cards. In our case, I think not.
BUT TO TOP IT OFF…
When the government, back in the Clinton administration, asked Fannie Mae and Freddie Mac to extend credit to many American who, otherwise, were not credit worthy – I have to ask the question – with rising deficits and massive government spending – why should anyone in the government call anyone names when the government is doing just what those Wall Street “Fat Cats” did – namely living above their means. We have massive debt and seem to believe that living in debt is O.K.
Perhaps the ethical thing to do is say – NO to additional government debt and do what is being preached to the population – live within your means and act ethically and in a responsible manner.
WHAT DO YOU THINK?