The numerous grammatical mistakes (and end of the message) made me wonder if it was from a low level customer service representative.  I have little doubt in my mind that many of these individuals are at the mercy of higher-ups at Chase, and as such must do the “dirty work” of enforcing edicts by senior executives (which is what really “jerks my chain” when I note that Gordon Smith was off lecturing on “leadership” while his employees were implementing one of the most abusive acts against customers in the history of the credit card industry).

I have researched the name of the submitter as was indicated, and I found several links that were suggestive of the individual’s role with Chase (discussed below).  I do not have the ability to determine the authenticity of the submission, but I do have the right to document what has occurred.  Thus, here is what was submitted:

[-------BEGIN SUBMISSION-------]

I am just writing to let your users know why we are treating you this way.

First understand that times are hard and people are having trouble payi,ng us back what they borrowed. This is a real problem.

As a bank we are expected to make a profet for our customers that invest.

Secondly, we really have already loaned more money to Americans than we feel comfortable about.

The economy in America is just not expected to rise any time soon. The employment rate is bottoming out and this affects our buisness. If people don’t have jobs they cannot pay us back.

So the bottom line is we want people to take their buisness elsewhere. Especially those of you that are not using your cards any more.

Please just transfer your accounts to another bank and leave me alone.

Kelly Hanick

[-------END SUBMISSION-------]

First, there does appear to be a “Kelly Hanick” with Chase.  On the ComplaintsBoard.com site under a post entitled “Credit Card Gouging” I found several comments referencing this individual, including some with an email address and telephone number, along with personal (i.e., home) and corporate postal mail addresses.

As an aside, the aforementioned home address was presented with the suggestion that complaints should be sent there, and while I understand the anger, I encourage site visitors to maintain the moral high ground by corresponding to Chase’s offices.  (This is also why I moderate the site.  This is a PG-13 site, for instance, because I will not let Chase have the upper hand by characterizing customers as a bunch of financially illiterate fools who do not have the vocabulary to do anything other than spew expletives; this would aid Chase in justifying the twisted logic that, they — customers — deserve the treatment that has been bestowed upon them.  I maintain this is especially appropriate given that smooth talking executives such as Jamie Dimon seem able to seduce Congressional representatives in Washington, with their “words of wisdom.”)

Kelly also has a profile at LinkedIn.com, a snippet of which is shown in the screenshot below:

Assuming for a moment the veracity of the comment itself, and that it indeed represents the views of the “Kelly Hanick” referenced above, I will provide a response (although I have saved the notification to moderate on the site, including the IP address):

1) Yes, times are challenging.  Unemployment is rising, entrepreneurs are struggling (one of the major reasons unemployment is rising), and Chase is SQUEEZING consumers and small businesses HARD at a time when they are at a tremendous disadvantage.  When payments are jacked-up so high that families and small businesses cannot pay, they default.  Individuals in this predicament were not planning to default; rather, they were PUSHED INTO DEFAULT, by Chase (and other banks).  Banks as a whole have acted in bad faith.  Yes, Kelly, “this is a real problem.”

2) I have never advocated that Chase or any businesses should not make a profit.  The problem is, Chase has attempted to do so by employing unethical tactics.  Where’s my “proof,” you might ask?  Telling me or customers at large that adding a so-called “service charge” that “is a finance charge” would not impact a promotional APR is a lie (I’m not dancing around with other possible word-choices such as “disingenuous,” “incorrect,” or “misleading” — anyone who knows the first thing about interest and amortization knows that adding a finance charge to an existing APR increases the overall rate).

3) Relative to item 2, above, Chase did rescind the finance charge (in a settlement with the New York Attorney General’s Office).  However, it appears to have done so under pressure while admitting no wrongdoing.  (And for me, personally, the damage and repercussions were already done — I’ve addressed that further below).

4) With regard to the “economy” and “unemployment rate bottoming out”: I have been advocating for small businesses as the major contributors to the economy that they are, for years.  On October 12, 2009, I just presented yet another paper based on scholarly research, and I am well aware that approximately half of very small businesses use credit cards as a source of capital (over ten million very small firms).  And, as can be seen in the SBA Office of Advocacy’s most recently published FAQs

Small firms:
• Represent 99.7 percent of all employer firms.
• Employ just over half of all private sector employees.
• Pay 44 percent of total U.S. private payroll.
• Have generated 64 percent of net new jobs over the past 15 years.
• Create more than half of the nonfarm private gross domestic
product (GDP).
• Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
• Are 52 percent home-based and 2 percent franchises.

Hence, while Chase is worried about being paid, its policies are DECIMATING (in yet another way, besides squeezing consumers to the point of defaulting), the very entrepreneurs who are our only hope for an economic recovery, not just “anytime soon,” but ever.

5) Chase has already made it abundantly clear that its wish is to have people take their business elsewhere.  We got that message.  Unfortunately, that’s not so easy to do, for some individuals.  This is especially true after having their credit scores ruined, lines of credit slashed, and in light of a credit card industry cartel which provides few options (in good times or bad).

6) If Chase is so worried about investors and profits, then it might want to keep in mind that engendering a sentiment of fear, disgust, and loathing among customers is not an effective long-term strategy.  Rather, it is a short-sighted, imbecilic tactic, which will become a “textbook case study” in how NOT to treat customers (by the time I’m finished, here).

7) The submission concludes with the remark, “and leave me alone.”  (Kelly) I’m afraid I’ve already made it clear what the conditions are for that to occur.  Banks want customers to read their contracts; meanwhile, READ MY TERMS, CHASE:

• If Chase Wants Peace, it Can Issue a Press Release.
• Apologize for defaming us (after the first round of change in terms notices), and continuing to disrespect account holders with a PR spin campaign which portrays us negatively before members of the media.
• Now, for me to personally “leave Chase alone,” I’ll simply suffice it to say that Chase has damaged me in several ways, including, but not limited to the following:
  • I was forced to suffer penalties and fees by prematurely withdrawing from a retirement account in anticipation of making higher payments;
  • I am among those that Chase defamed (making payments on time, and in many cases paying more than the minimum);
  • Chase did “steal Christmas” last year;
  • because I knew of no other option but to cooperate with members of the media in order to defend my family, my personal finances have now been the subject of coverage in Business Week, the New York Times, the Wall Street Journal, and other outlets (and I do not appreciate being put in such a position by virtue of Chase’s actions and its wherewithal to take advantage of customers, who can do little else to mount a resistance);
  • Chase’s actions exacerbated an already horrible set of circumstances, causing undue stress and emotional hardship for a family that has already been suffering;
  • As we speak, I have just learned that a rock slide on I-40 near the TN/NC border will block off that interstate for months.  I already drive 305 miles each way to and from work every week, because our house has not sold after over two years on the market (the point being, we’ve got enough problems, and we’re not alone: Chase should work with consumers and small businesses, instead of “kicking us while we’re down”);
  • Chase still sends change in terms notices to my wife and household (that is a very, very, very, bad idea) — I already told you to “leave us alone,” in no uncertain terms.

Accordingly, I personally have no plans to leave Chase alone until the damages to small businesses, customers at large, me, and my wife and family have been undone and rectified (to the extent that this is even possible after all of the pain Chase has caused to its previously identified “most valued cardmembers“).

I’ll admit, it is interesting that a SVP of Customer Service* at Chase would possibly submit such a request — to be left alone.  However, I regret to inform you, Kelly, or any other site visitor that “Chase drew first blood.”  There is no way in hell that I’m going to simply go away “elsewhere.”

Chase shouldn’t pick fights at all, but since it chose to start one (by trying to coerce customers via unethical actions), you can all count on this, until MY TERMS and conditions are met:

I’M (STILL) COMING AFTER YOU

AND I’M NOT GOING TO LEAVE CHASE ALONE

* Noting your previous HR background, might I respectfully recommend a career change, Kelly.  “Customer Service” does not really seem to be a supported organizational role at Chase.  I think most interviewers would understand your “reason for leaving.”

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 12 comments | Add to del.icio.us
Post tags: advocacy, banks, change in terms, complaints, consumers, credit, customer service, economy, fees, interest, notices, penalties, small business

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“AB,” stands for Anonymous Banker, and AB’s site goes by that same name with the subhead, “An Insiders View Into the Banking Industry and Economic Crisis.”

In reading some of AB’s posts, written from the point of view of someone who has spent the bulk of his/her career working with small businesses, I find that he/she is just as disgusted and alarmed as I am about what is to come for our nation and our economy, if we don’t restore confidence.

And frankly, given that I am still stuck in a perfectly maintained home in a decent middle class neighborhood (that would have ordinarily sold in about 60 days, before the depression), I have a hard time mustering up much confidence these days that a life of misery for my family will not go on for many months to come; it’s already been two years.

As I have said several times before, in my opinion, this is because we bailed out big banks and their executives (with their perks, jets, and bonuses), instead of creating loan programs (that would have been break even) for distressed homeowners.  If we had simply addressed the problem that started this mess in the beginning — and it wasn’t even a big mystery to unravel like a health problem or an intermittent rattle coming from a car — real estate, I wouldn’t be here today, using the D-word.

This all started with bad news about real estate foreclosures.  Consumers were scared about what was happening in their neighborhoods, rightfully so.  Consumers lost confidence.  Then, we witnessed one of the biggest giveaways to corporate executives in history.  Outrage over AIG parties, trips and bonuses resulted in no substantive penalties or reforms.  Business “as usual” ruled the day.

The financial services industry greased the palms of Congress, and everybody (except the citizens at large who have to foot the bill), still had a really nice time.  Meanwhile, the cost of fuel for a day to run one of their jets or yachts is probably about the amount of money any of us serfs would need to “make our month,” or give us the wiggle room we need to negotiate the sale or purchase of a home.

After everyone lost confidence, consumers tightened their purse stings and stopped spending.  This led to trouble in the auto industry and another round of bailout disbursements.  The fact that one of our economy’s biggest industries (it’s not just the automakers, but all of the interdependent businesses: steel, glass, plastics, et cetera) was in trouble and would also need a bail out, further shook confidence in government’s ability to address fundamental issues and root causes.

Threats to the survival of  small businesses, accompanied by (i.e., resulting in even more) unemployment have followed.  AB states that he/she “[has] been a small business advocate for thirty years,” and further observed:

“Each day I encounter consumers and business owners that had been able to keep current on their revolving debt. But with each rate increase in the midst of declining revenues, brought about by this economic crisis CREATED BY THE BANKING INDUSTRY, more and more consumers and business owners are falling behind. The rate increases are a self-fulfilling prophesy. The banks say they need an increase in rates to help offset the increase in credit card losses. I say, the increase in rates is CAUSING a good portion of the credit card losses.”

A few months ago (July 22, 2009), someone attempted to post a comment, which I suppressed:

“Perhaps instead of buying a domain name, you should budget properly and pay your bills off in time.”

Not wanting to fire off in a knee-jerk reaction, here’s my answer:

I do pay my bills on time.  I always have.  This site is not about me, it’s about justice, fairness, efficiency of the banks for the benefit of a citizenry at large, small businesses and consumers in particular, and “the economy, stupid.”  If you want to “dis” me, while demonstrating a lack of understanding or caring about people or the issues that impact us all (and our children, their children, and so on): “budget properly” and get your own site.  Since ChangeInTerms.com is a pg-rated site, I can’t respond in more basic terms such as “‘expletive’ you, too!” (that you would more likely have the intellectual capacity to grasp).  But in “southern-speak,” I can say: “Bless Your Heart.”

A glimmer isn’t a recovery and there will be no recovery, without confidence.  There is not going to be any confidence as long as we are trapped, squeezed, and coming soon to a household and small business budget near you: taxed to death (and beyond the grave).  Small businesses and the economy — all of us — must have a properly functioning banking system, and we don’t.

Banks are making very bad decisions, causing defaults (this is especially tragic when account holders were making their payments, on time) when if they would instead work with people, they could get their money back (not to mention maintaining a loyal customer base instead of destroying their own brands).  They could prevent a frightening downward spiral and “self-fulfilling prophesy” from coming true.

The purpose of the banking system is to provide an exchange system for our currency and our economy.  It is failing in its fulfillment of that purpose.  AB knows it, I know it, and anyone with enough brains to buy a domain name and try to fight back before it’s too late knows it.  Bless Your Heart, too, if you don’t join the fight!

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 11 comments | Add to del.icio.us
Post tags: "Bail Out", banks, consumers, credit, debt, economy, penalties, small business

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We must continue to refute a defamatory portrayal cast upon 400,000 of Chase’s “most Valued Cardmembers“ before members of the media.  The article was entitled, “JPMorgan To Refund Account Fees For 400,000 Credit Cards,” and apparently relied upon Chase’s spokesperson, Stephanie Jacobson, as a source.   Let’s take it from the top, relative to corrections; quoting from the article:

In January, Chase Card Services, a unit of New York-based JPMorgan, notified nearly half a million credit card customers that they would be subject to a $10- a-month service charge for keeping their account open.

Correction: The “$10-a-month service charge” is in fact one that “is a finance charge.”  Why do I correct this over and over, and over, again?  Because it is one of the main points of the entire debacle for account holders.  Since it is a “FINANCE CHARGE,” then Chase violated the previously promised promotional rates; this provided a basis for 12 class action lawsuits (plus 2 more that I have heard about through lead plaintiffs who have contacted me — just waiting on links to the suits). 

I am fairly certain that well before any of the class action lawsuits were filed, I may have been the first person to have made this point about the “FINANCE CHARGE” and the fact that it changed the promotional rate (indicating that Chase made a strategic error) in my letter to Chase Card Services CEO Gordon Smith, which was dated December 3, 2008 (immediately after my receipt of my own change in terms notice).

Relative to “for keeping their account open,” that may be technically correct, but it does not reflect the actual wording in the change in terms document in a manner that conveys the situation with adequate richness: “This charge is owed whether or not you use your account, and you agree to pay it when billed.”

Finally, Chase has continued to engage in what can only be described as an obstructionist campaign based upon an outright lie relative to this so-called “service charge” (a.k.a., “fee”) as described to members of the media.  According to the change in terms notice, Chase falsely stated: “Important: Your APRs will not be impacted by these changes” (Panel 1, Summary Section).  I’m afraid that one probably does not even need to be “smarter than a fifth grader” to grasp that adding a charge that “is a finance charge” does absolutely, positively, and certainly impact APRs; it makes them HIGHER.

Next quote: 

Chase also raised the minimum monthly payments for those customers from 2% to 5% of the account’s outstanding balance.

Correction:  There’s a little more to it than that.  Although any account holder may feel like this is “blackmail,” forcing him or her into switching to Chase’s premeditated option (designed to herd individuals into accepting higher interest rates, typically double the previous rate, e.g., from 3.99%-old to 7.99%-new), as non-lawyers and laypeople, they may not discern some of the finer points of legal language.  Thus, here is a passage from the class action lawsuit, DAVID M. SKAGGS, individually and on behalf of all others similarly situated, Plaintiff, v. CHASE BANK USA, N.A., Defendant, which explains Chase’s act in legal terms (p. 1, lines 16-21):

Chase reneged by placing a $10 per month finance charge on these accounts, and raising the minimum payment due each month.  Chase then uses its unilateral implementation of these onerous terms to coerce cardholders to agree to a higher rate of interest or to pay the loan balances in full.  3. In doing so, Chase consistently misrepresents the facts applicable to these accounts and violates the Truth in Lending Act.

Switching back to plain talk, Chase planned to bully account holders who could not make the higher monthly payments.  Especially in these hard economic times for individuals and families (and small business owners), Chase knew it had a powerful stick with which it could threaten account holders.  It had a lot of people at a tremendous disadvantage and it planned to plunder and pillage, even after accepting $25 billion in bail out money.  (Since this is a PG-rated site, I’ll not add the word that often accompanies “plunder and pillage,” that word being a form of sexual assault.) 

For instance, an account holder with a $20,000 balance (not an atypical debt for a small business owner) would go from paying $400 per month to $1,000 per month; the $600 per month increase may be just about the right amount to support a part-time employee, or pay the rent and utilities for a small business owner’s office.

Next quote: 

Jacobson said the decision to assess account fees at the rate of $120 a year applied to “less than one-half of one percent of our customers.” The credit card accounts in question, she said, carry low promotional interest rates and are tied to “a small percentage of customers that have made little progress in paying down these loans.”

Correction:  I have written about the defamatory nature of these statements made by Chase through its spokesperson(s).  However, “the accounts in question” were most certainly not all associated with individuals who “have made little progress in paying them off.”  Here is a previous post that I created after spending some time researching the Internet to determine if there were in fact other persons, who like me (as I discussed in response to a quote from me in the New York Times), paid more than the minimum — findings indicated numerous others. 

Secondly, the portrayal of these account holders in a negative light, by virtue of suggesting that their “progress” was in some way deficient relative to their loan agreements with Chase, was and is unconscionable, and damaging to the reputation of those account holders.  These account holders, all 400,000 of them (otherwise, they would have already been subjected to usurious 30-something percent rates) were meeting their obligations, have done nothing wrong, were not required to pay more than the minimum — even if that was the case, but many did pay more — and were previously praised as being among Chase’s “most Valued Cardmembers.” 

This inappropriate negative portrayal of good-paying account holders should come at a cost to Chase.  I for one, would like Chase to pay punitive damages and restore the good names of these good-paying account holders, all 400,000 of them, with a letter of apology published on the same newswires which it used to distribute the original misrepresentations and defamatory information. 

Further, a letter of correction should be sent to every credit bureau, for each of the 400,000 account holders (given three major credit bureaus, I estimate approximately 1.2 million letters), specifically noting that these account holders “made the required amount of progress that was indicated in each monthly statement, and therefore faithfully and fully met their obligations.”  Back to street language: “I’ll dare you Chase, insult the honor of these account holders” (since I am a college professor and the father of a teenager, I have the vocabulary to be even more colloquial: “Chase, you better say you’re sorry for dissin’ me and my peeps”).

Given that the “low promotional rates” to which Ms. Jacobson referred would have only been offered to good-paying account holders in the first place (with good to excellent credit — and that takes work on the part of account holders), who have in the interim fulfilled their payment obligations, Chase should be forced to make restitution as described above. 

Because I have now become a public figure, essentially forced into doing so as the only apparent means of protecting my family’s interests in this matter, personally, I would still NOT be satisfied should Chase merely send the aforementioned retractions.  The damage has been done, including tangible losses to my retirement account, from which I took an early distribution (incurring penalties and taxes as well as the loss of future retirement earnings) under the threat of higher monthly minimum payments to Chase.  I’m not the only one who has suffered money damages, which by the way, were associated universally with account holders who were doing all that they could do to protect their good reputations, respectively. 

Several site visitors have asked me privately, “what does this do to the lawsuits?”  While I am not an attorney, I would assert that a “Nevermind!” from Chase does even come close to undoing the damage it has wreaked upon 400,000 account holders.  I know my own sense of psychological as well as financial well being has been egregiously violated, and I would suggest that this is a common condition that has resulted from Chase’s actions.

Next quote:

“Our desire is to have these balances paid back in a reasonable period of time,” Jacobson said. “The minimum payment due will remain the 5% of their new balance.”

Correction: The backhanded implication of the above quote, consistent with the defamatory remarks, is that customers were not already paying their loans back as agreed, “in a reasonable period of time.”  Nevertheless, if Chase had specific ideas or requirements (i.e., “desires”) regarding a loan payoff period, at the very least it should have said so in its promotional messages. It should have provided payment terms in statements that were consistent with these promotional messages as well.  In other words, Chase set the minimum payment amount all along, and it has no right to gripe about account holders who met their obligations by paying the amount that was specified as being due as per their respective monthly statements.

Instead, Chase promoted a false impression of a “fixed APR Until the balance is paid in full” loan as a “Rate Reduction for our [Chase's] most Valued Cardmembers,” and by originally setting payments at 2% of the balance, mislead customers into believing that these payment terms could be expected to continue.  Since it could not easily claim default on the part of individuals who were paying on time and subsequently engage in rate-jacking, Chase decided to try payment-jacking (again, this is also tied to bad faith and coerciveness).

One might note that no time period, whatsoever, was originally disclosed; and, whether from a legal or simply a practical point of view, such disclosure should be recognized as an obvious requirement so that a lender and borrower can communicate in connection with expressing mutual expectations. 

As just about anyone who can drive a car is aware, if one knows the speed at which he or she is traveling, then the time to arrival (ETA) at a destination with a known distance can be calculated.  Translated, this means that Chase knew when it lent money at a given rate of interest, that with payments set at 2% of the balance, accounts would be paid in full in a period of time that was easily calculable.  Thus, for the initial period of the loan, account holders were erroneously led to believe that there was a certain rate of repayment and time associated with these loans.  This illustrates a profound disclosure issue.

Further, noting that Chase has now, finally, indicated that “a reasonable amount of time” would be associated with payments at 5% of the balance per month (like stepping on the gas and accelerating from 40 mph to 100 mph), two questions would arise on the part of any consumer given the language quoted from the promotional offerings: 1) why (in the hell) didn’t Chase define “reasonable” in its original promotional messages?; and 2) if Chase had a specific (“reasonable”) time period in mind, then it is a basic premise of any loan to state as much in advance of providing that loan — hence, why didn’t Chase do so? (For example, car loans may typically be 48 to 60 months, and real estate loans may typically be 15 or 30 years.)

I remain astonished that Chase’s present statements ignore its initial failure to disclose its “desire” in a manner that was forthright.  Further, its failure to disclose its desires essentially necessitates a need for mind-reading on the part of account holders. I also would point out that these are individuals who were previously praised in promotional messages, but who have now for no reason of default have more recently been defamed as essentially, “slow paying laggards who deserved it” from Chase.

Next quote (apparently a portrayal of the author’s now incorrectly skewed viewpoint):

Chase’s decision to assess the monthly fees before retreating only months later illustrates the struggle among credit card lenders to wind down open accounts tied to risky borrowers.

Correction:  “Risky borrowers” exacerbates the damage inflicted by the initial defamatory portrayal (or at the very least, illustrates the result of Chase’s dissemination of misinformation by its spokesperson).  As should be very clear by this point in my discussion, we, the 400,000 who have been defamed, are not the “risky borrowers.”  We were selected for low promotional rates precisely because we were among the least risky borrowers.  We have paid on time and as agreed.  Perhaps the author of this article did not intend to “add insult to injury,” but by accepting what Chase has stated at face value and then providing further (inappropriate) justification to Chase’s misrepresentation, this is exactly what has occurred. 

Therefore, I would like a correction that adds proper clarification from the publication and the author.  I want to be respectful of the author as I can understand how this situation may have occurred.  However, at the same time, I must strongly object to the added insult resulting from the suggestion that we are “risky” or otherwise unworthy borrowers (who from a social justice point of view, somehow “deserved it” relative to what Chase has done).

Next quote:

“Customer satisfaction is important to us,” Jacobson said.

Correction:  ChangeInTerms.com is my primary means for providing customer feedback with regard to the credit card industry as a whole and its abusive treatment toward account holders.   

If the 400,000 number quoted by the media (and in the article’s headline) is accurate from Chase, then there are at least 399,999 individuals, plus me, who are by no means remotely close to being “satisfied” by Chase’s unprecedented act of aggression (which I intend to make into a “textbook study” of how NOT to treat or otherwise “satisfy” customers).  

I can guarantee that even though my wife does not have a Chase account that was associated with this present change in terms, given that ”Chase Card Services Stole Christmas,” and a few years ago a supervisor also flatly told her that Chase did not care whether or not she kept two accounts of her own open, she’s not “satisfied,” either.  For the record, she did nothing wrong (perfect payment record, like me, and these 399,999 additional account holders).  I have mentioned this instance of complete dissatisfaction on the part of my wife in my correspondence with Chase, but I don’t see that it has shown any interest in addressing my her situation.

The class action lawsuits against Chase, in effect, also constitute a form of feedback regarding “satisfaction.”  Indeed, it would be an understatement to say that customers are anything less than outraged.  

An additional form of feedback includes the notoriety of being included in a petition launched by Consumers Union (publisher of Consumer Reports — a premier objective and independent evaluator of what may be good, bad, or in-between relative to product offerings and promotional claims), against this egregious action on the part of Chase.  The intended audience for the petition is the President of the United States.  I’d say that when an organization such as Consumers Union has gone so far as to specify Chase’s actions in a petition all the way to the President, that is a good indication that overwhelmingly, “We can’t get no, sa-tis-faction; though we try, and we try and we try and we try.”

In closing, I would add that the article should also mention Chase’s original representations before Congress in testimony describing “opt outs” as the means by which it treated customers “fairly” (given that this change in terms under discussion is missing any such “opt out” as was portrayed in that testimony). 

The author’s byline contains contact information.  Please help me emphasize the needed corrections as indicated above, along with any other insights you may wish to provide to the author of this inflammatory piece (keep in mind that the author may not have understood that Chase has engaged in an ongoing campaign to spread misinformation, and its executives lied before Congress about opt outs — be polite):

Marshall Eckblad, Dow Jones Newswires; 201-938-4306; marshall.eckblad@dowjones.com

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 31 comments | Add to del.icio.us
Post tags: "Bail Out", advocacy, change in terms, Class Action, consumers, credit, credit cards, debt, fees, interest, interest rate, penalties, small business, Testimony

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Below is an interesting piece of proposed anti-usury legislation that you might want to contact your representatives about. It would override the rate abuses that have been made possible by the National Bank Act, that allowed credit card issuers to circumvent state anti-usury laws by locating in states that have anti-consumer laws like Delaware and South Dakota.

The piece also makes reference to credit unions, in that their rates have had a similar cap for years. One way to push back against all the abuses of the banking industry is to transfer your accounts to a credit union. A credit union is a not for profit financial institution, and when you become a member you also get a voting share. You are not a customer, you are an owner of your credit union. In the past, it was hard find a credit union, because most of them were limited to people who worked in certain professions, or for certain employers. Now, there are quite a few community credit unions that only require that you live or work in a certain geographical area.

Credit Unions typically offer free checking, no fee atms, and the gamut of loans from mortagages to cars, as well as credit cards. When you call and ask to speak to the manager, she comes to the phone, and sincerely tries to help. After all, she works for you! My credit union recently helped me get out of Chase hell. If you’re interested in one way to vote with your feet, use this link to locate a credit union in your area.

Credit Union National Association (CUNA)

_______________________________________________________

Washington, DC — In an effort to provide direct financial relief to tens of millions of American families, Congressman Maurice Hinchey (D-NY) today announced that he’s introduced legislation that would cap interest rates on credit cards and all other loans at 15 percent. The Interest Rate Reduction Act would rein in the skyrocketing rates that banks and financial institutions are charging customers with little or no warning and without any justification. U.S. Senators Bernie Sanders (I-VT) and Richard Durbin (D-IL) authored the bill and are sponsoring it in the Senate.

“For years, the credit card industry has taken advantage of hardworking Americans by finding any little excuse or reason to dramatically increase their rates, which only serves to drive those people further into debt and make them more dependent on the credit card industry,” Hinchey said. “The abuse exhibited by credit card and other lenders is a major reason for the economic hardships being felt in households all across America. A fair and healthy lending system is critical to the success of hardworking Americans and the recovery of the economy. This bill helps limit credit card and general lending abuse by placing a reasonable cap on the rates that can be charged to Americans. An interest rate cap gives the American people a legitimate chance to climb out of debt, enables lenders to still make a comfortable profit, and promotes long-term sustainable lending and borrowing practices.”

Hinchey’s legislation would impose a 15 percent interest rate cap on all loans at financial institutions. The bill would also impose a reasonable cap on lending fees, which have risen dramatically over the past decade. Importantly, the Federal Reserve could allow higher interest rates, but only under special circumstances when it determines that the 15 percent cap would threaten the safety and soundness of lenders and if money market interest rates have risen over the prior six months. These are the same rules that currently apply to credit unions, which have been forbidden from charging usurious interest rates on credit cards and other loans to their members for nearly 30 years. The interest rate cap has protected consumers at credit unions from being charged usurious interest rates, has not harmed the safety and soundness of these institutions; and has not negatively impacted the access to credit of credit union members. Furthermore, credit unions have been able to stay afloat throughout the credit crisis and have not received one dime of taxpayer assistance.

Credit-card debt in the U.S. has reached a record high — nearly $1 trillion. The average American household’s debt from credit cards has risen from $2,966 in 1990 to $9,840 in 2007. The debt crisis inundating so many Americans is partly the result of an industry with few regulations and little oversight. Consumers nationwide are facing excessive credit card fees, sky-high interest rates, and unfair, incomprehensible agreements that credit-card companies revise at will. In 2007, credit-card issuers imposed $18.1 billion in penalty fees on families carrying credit card balances — up more than 50 percent since 2003 and accounting for nearly half of the $40.7 billion in industry profits. Last year’s estimates were that credit card companies would break all records for late fees, over-limit charges, and other penalties, and pull in more than $19 billion.

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Post tags: banks, consumers, credit, credit cards, debt, economy, fees, interest, interest rate, penalties, regulation

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