Elizabeth Warren is at it again. Busting on banks for increasing fees and interest rates when that is the exact thing that is making them more profitable. And the exact thing that will allow them to return TARP money and get off the government dole.
Raising fees is strictly a bottom line profit enhancing move. But increasing interest rates on credit cards from 11% to 12% (per the linked article) is probably a move designed to better compensate the CC companies for all the extra risk now involved with CC lending that was incorrectly priced in years past. It hardly seems like raising rates by a percent on average could be perceived as predatory lending as Ms. Warren asserts.
Either nationalize those banks and run them for the public welfare, or treat them as borrowers and give them some leeway to return to profitability and get we, the people's money returned to the federal coffers as soon as possible.
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Join Date: May 2005
Posts: 6,438
Both Shitty Citibank and American Excess have jacked my CC rates recently. I think it's hilarious, since I pay in full every month...
__________________ Have Funds, Will Retire "...but do feel free to assert your duly noted opinion on this subject again without benefit of reference or provision of additional information..."
Both Shitty Citibank and American Excess have jacked my CC rates recently. I think it's hilarious, since I pay in full every month...
Same with me. Funny thing is I don't even remember which company raised rates, by how much or on how many cards since I never carry a balance unless there is a zero percent promotional rate (or very low rate).
I don't think the government wants the banks to stop participating in TARP. This provides political theater and the perception the govt is "doing something" when they drag the bank management in front of committees, etc.
The best possible result of all of this would be a very healthy private-sector "lesson learned" about accepting public money.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
Elizabeth Warren is at it again. Busting on banks for increasing fees and interest rates when that is the exact thing that is making them more profitable. And the exact thing that will allow them to return TARP money and get off the government dole.
Raising fees is strictly a bottom line profit enhancing move. But increasing interest rates on credit cards from 11% to 12% (per the linked article) is probably a move designed to better compensate the CC companies for all the extra risk now involved with CC lending that was incorrectly priced in years past. It hardly seems like raising rates by a percent on average could be perceived as predatory lending as Ms. Warren asserts.
Either nationalize those banks and run them for the public welfare, or treat them as borrowers and give them some leeway to return to profitability and get we, the people's money returned to the federal coffers as soon as possible.
I heard the news stories and thought exactly the same thing. An excellent reason why we don't want to permanently nationalize banks. (Temporary gov't "partnerships" might remind all the CEO's of why they really don't want the gov't around long term.)
The TARP oversight comments remind me of a bully (or older brother) grabbing a victim and making them hit themselves, all the while asking "why are you hitting yourself?!". Except it is the TARP oversight committee restricting banks from making good business decisions and then asking "why are you failing, banks". The only exception to the analogy being many of these banks are not completely without fault.
I don't think the government wants the banks to stop participating in TARP. This provides political theater and the perception the govt is "doing something" when they drag the bank management in front of committees, etc.
The best possible result of all of this would be a very healthy private-sector "lesson learned" about accepting public money.
What Sam said plus a lesson learned by the government about the lack of consistent timely regulation.
-- Rita
__________________ Only got A dimple, would have preferred 2!
I don't think the government wants the banks to stop participating in TARP. This provides political theater and the perception the govt is "doing something" when they drag the bank management in front of committees, etc.
I tend to agree. I think they want to have very visible public scapegoats, at least in part to look like they "get it" -- i.e. to feed "red meat" to angry populist sentiment -- and part to help deflect some of the blame away from themselves for bad public policy decisions to help this happen.
__________________ "Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 6,438
I suspect the "fees" affect the lower end customers more than the upper end. So, more populism...
Hey, I know; let's have a tea party!!
__________________ Have Funds, Will Retire "...but do feel free to assert your duly noted opinion on this subject again without benefit of reference or provision of additional information..."
The TARP oversight comments remind me of a bully (or older brother) grabbing a victim and making them hit themselves, all the while asking "why are you hitting yourself?!". Except it is the TARP oversight committee restricting banks from making good business decisions and then asking "why are you failing, banks". The only exception to the analogy being many of these banks are not completely without fault.
You post was great!!! made my day! This is EXACTLY right. I think this is what happens when ideology meets reality. Really does not matter what form the govt intervention will take. The act of intervention by definition will make it worse.
The CEO's want to pay back the money asap so they can give themselves $50MM salaries and bonuses again without public outcry.
If they can get back to making billions for their shareholders, then I'm ok with this!
And if the banks pursuing profitability has the side effect of providing a wide range of deposit and lending choices for consumers and businesses, then even better.
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