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Tuesday, July 2, 2024
Guns Down America: Some good news out of California!
Thursday, January 26, 2023
A Federal Agency Wants to Hear Directly from the Public about Bad Practices at Credit Card Companies
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A Federal Agency Wants to Hear Directly from the Public about Bad Practices at Credit Card Companies
By Pam Martens and Russ Martens: January 25, 2023 ~
Yesterday, the federal watchdog agency – the Consumer Financial Protection Bureau (CFPB) – announced that it wants to hear directly from the public on credit card practices. But since “the public” also includes all of the folks that are paid to carry water for the credit card industry, the voice of the average Joe and Jane is highly likely to be overwhelmed by industry sycophants, as is typically the case.
Thus, we are asking our readers to give this matter some careful thought, as we outline below, and if you are so inclined, send your comments to the good folks at the CFPB using this link they have set up. The public has until April 24, 2023 to submit comments but we ask that you do so promptly.
Topic 1: The Same Banks that Were Bailed Out by the U.S. Taxpayers in 2008 with Below-Market Rate Loans as Low as Less than Half of One Percent Are Now Charging those Same Taxpayers as High as 13 to 18 Percent (or Higher) on Credit Cards
A government audit released in July of 2011 showed that the same mega banks on Wall Street that caused the meltdown of the economy in 2008 and the Great Recession were bailed out with cumulative loans from the Federal Reserve totaling more than $16 trillion. (If you add in the bailout programs not covered by the government audit and the dollars swap lines to foreign central banks, the figure comes to a $29 trillion bailout.) The U.S. taxpayer is ultimately on the hook for the debt of the Federal Reserve, so those loans were, indeed, a subsidy from the taxpayer.
A significant part of those Fed loans were made at less than one-half of one percent interest at a time when some of those banks were teetering or insolvent and couldn’t have gotten loans at even double-digit interest rates in the open market.
Three of the recipients of those loans – JPMorgan Chase (parent of Chase Bank), Citigroup (parent of Citibank), and Bank of America – just also happen to currently have the largest market share of the credit card market in terms of balances outstanding, according to the 2022 Nilson Report. But these banks are allowed by the U.S. Congress to currently pay as little as 0.01 percent on the money consumers hold in their money market funds at those banks while the same banks charge double-digit interest rates on their credit cards held by consumers. How is the U.S. consumer ever supposed to get ahead?
This constitutes an enshrined wealth transfer system that is being institutionalized through inaction by Congress. (Also see our 2021 article: Citigroup Has Made a Sap of the Fed: It’s Borrowing at 0.35 % from the Fed While Charging Struggling Consumers 27.4 % on Credit Cards; and our 2022 article: The Apple Credit Card Provided through Goldman Sachs Has Created a Living Hell According to Consumer Complaints.
Topic 2: The U.S. Needs a Federal Cap on Interest Rates Charged on Consumer Credit Cards
In 2019, Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez introduced the ‘‘Loan Shark Prevention Act’’ which would have set a Federal cap of 15 percent on interest rates that could be charged to consumers. (Needless to say, it was immediately attacked by the bank lobby and did not pass.)
In introducing the new legislation, Sanders and Ocasio-Cortez singled out the mega Wall Street banks, writing the following in a white paper they released simultaneously with the proposed legislation:
“Today’s modern-day loan sharks are no longer lurking on street corners, threatening violence to collect their payments. Today’s loan sharks wear expensive suits and work on Wall Street, where they make hundreds of millions of dollars in total compensation by charging sky-high fees and usurious interest rates, and head financial institutions like JP Morgan Chase, Citigroup, Bank of America, and American Express…
“Despite the fact that banks can borrow money today at less than 2.5 percent from the Federal Reserve, the median credit card interest rate today for consumers is an astounding 21.36 percent…
“Jamie Dimon, the CEO of JP Morgan Chase, is now worth $1.4 billion after his bank got a taxpayer bailout of more than $400 billion during the financial crisis…
“The American people are sick and tired of being ripped off by the same financial institutions that they bailed out ten years ago.”
In their white paper, Sanders and Ocasio-Cortez also explained how the U.S. ended up with such draconian consumer interest rates. They write:
“Establishing a national usury law is not a radical concept. Up until 1978, about half of the states in the country had usury laws on the books capping interest rates on credit cards and other consumer loans. For example, in Alabama, the legal maximum rate of interest was 8 percent. In Alaska it was 10.5 percent. In Arizona it was 10 percent. In Idaho, it was 12 percent. In Kansas, it was 15 percent. In New Mexico it was 15 percent. And, in Vermont, the legal maximum rate of interest was 12 percent.
“But, those state interest-rate caps were obliterated by a 1978 Supreme Court decision (Marquette National Bank v. First of Omaha Service Corp), which concluded that national banks could charge whatever interest rate they wanted if they moved to a state without a usury law. So most of these companies moved to South Dakota or Delaware with no interest rate caps, allowing them to charge people in Vermont or Kansas interest rates of 20 or 30 percent. That is unacceptable. Under this plan, the disastrous Marquette Supreme Court decision would be repealed.”
As the saying goes, “Democracy is not a spectator sport.” If you want a fairer America, you have to engage. We ask that you consider sending your thoughts on these issues to the CFPB, along with any other credit card complaints that you have. We also ask that you forward this article to others you know who are struggling under the weight of credit card debt at high interest rates.
LINK
Friday, August 12, 2022
Astonishing Charts from New York Fed Show the Dire Straits of U.S. Consumers During the 2008 Crash and Its Aftermath — Versus Today
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Astonishing Charts from New York Fed Show the Dire Straits of U.S. Consumers During the 2008 Crash and Its Aftermath — Versus Today
By Pam Martens and Russ Martens: August 11, 2022 ~
At his July 27 press conference, Fed Chair Jerome Powell said this:
“Households are generally in about as strong a financial shape as they’ve been in a very long time – or perhaps ever given the money that’s on people’s balance sheets. So you have a pretty – from a financial stability standpoint – you have a pretty decent picture.”
That statement captures a rear view mirror look at U.S. households. The picture is deteriorating rapidly. More on that in a moment, but first a look at some hair-raising charts that capture the dire straits of U.S. households during the 2008-2010 financial crisis versus today. The New York Fed released its Household Debt and Credit Report for the second quarter of 2022 last week. It showed total household debt rising by $312 billion in the second quarter to reach an historic high of $16.10 trillion. Also setting a new historic record was mortgage debt, which climbed to $11.39 trillion and represented 70.5 percent of all household debt.
One would think that with historic levels of outstanding debt on household balance sheets, inflation at multi-decade highs and interest rates rising, one would be seeing dramatic increases in delinquencies on credit cards and mortgages, rising foreclosure rates and bankruptcy filings. But take a look at the charts below from the New York Fed’s report last week. Compared to the data on the charts for 2008 through 2010, it looks like a cakewalk today. In fact, the New York Fed report notes that “The share of mortgage balances 90+ days past due remained at 0.5%, near a historic low.”
What neither Fed Chair Powell nor the New York Fed report is telling the public is that things could deteriorate very fast without all that stimulus money and debt relief that Congress enacted to deal with the pandemic. One hint of that came from the following snippet in the New York Fed’s report:
“Although foreclosures have been very low due to the moratoria on new foreclosures and mortgage forbearances, 35,000 individuals saw new foreclosures on the credit reports, an increase from 24,000 in the previous quarter, an uptick potentially suggesting the beginning of a return to more typical levels.”
An increase from 24,000 foreclosures to 35,000 foreclosures is actually an increase of 45.8 percent in a three-month time span. That sounds pretty scary to us.
We decided to stroll over to the St. Louis Fed’s economic data bank known as “FRED” so see what the Bureau of Economic Analysis’s (BEA) Personal Saving Rate has looked like over the years and more recently. The BEA defines the Personal Saving Rate like this: “Income left over after people spend money and pay taxes is personal saving. The personal saving rate is the percentage of their disposable income that people save. This rate is followed to learn about Americans’ financial health and to help predict consumer behavior and economic growth.”
The Personal Saving Rate chart below helps to explain why Fed Chair Powell is able to brag about the financial health of U.S. households: they were put on the same kind of feeding tube from the U.S. government during the heights of the pandemic as the Fed put Wall Street banks on during the financial crash of 2008, a time when Congress let tens of millions of Americans left jobless from the crash fend for themselves with no lifeline. As Senator Bernie Sanders summed up the 2008 to 2010 financial crash era: “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
As the chart below illustrates, the personal savings rate in the U.S. spiked to the highest levels in 60 years from the stimulus checks that were issued to Americans in 2020 and 2021; the Child Tax Credit payments issued monthly from July 15 to December 15, 2021; and various forms of debt relief. (According to a Brookings study, “between March 2020 and May 2021, more than 70 million consumers with loans worth $2.3 trillion entered forbearance, missing $86 billion of their payments. During that period, 6.3 million mortgages, 11 million auto loans, 68 million student loans, and 62 million revolving loans (such as credit cards) were in forbearance.)”
But as the government’s financial assistance has ended, the personal saving rate has plunged, moving from a historic high of 33.8 percent in April of 2020 to 8.7 percent in December 2021; to 5.8 percent in January of 2022; to the most recent reading from the Bureau of Economic Analysis of 5.1 percent in June of this year.
Adding to the tenuous financial picture of U.S. households, Bankrate conducted a survey this past January, which found that a majority of Americans (56 percent) would be unable to cover an unexpected expense of $1,000 should an emergency arise. Of those surveyed, 20 percent said they would have to put the charge on a credit card and pay it over time. That might explain why balances on credit cards are also hitting historic highs. According to the New York Fed report, “Credit card balances saw a $46 billion increase since the first quarter – although seasonal patterns typically include an increase in the second quarter, the 13% year-over-year increase marked the largest in more than 20 years.”
Wednesday, August 3, 2022
Red state voters revolt over Roe decision THANK YOU KANSAS!
Today's Top Stories:
Kansans vote to uphold abortion rights in their state
In a huge win for abortion rights, voters overwhelmingly struck down a proposed constitutional amendment that would remove language enshrining reproductive rights in their state.
Take Action: Demand President Biden remove the remaining FDA restrictions on abortion pills!
Fox host tries to lie to Manchin’s face about his bill, but it goes horribly wrong
The West Virginia Senator gave FOX's viewers an important lesson they all need to hear about the historic deal awaiting a vote in the Senate.
Take Action: Tell Congress to pass the Transgender Bill of Rights!
Democrats pull out HUGE 11th hour surprise
No Lie with Brian Tyler Cohen: Wow!
2020 election denier and anti-LGBTQ bigot Eric Schmidtt wins nomination for Missouri's Senate seat, defeating rapist Eric Greitens
Schmidtt has fought against the Affordable Care Act, tried to institutionalize anti-LGBTQ discrimination, and abused his position as AG to try and invalidate the 2020 election on behalf of Donald Trump.
Take Action: Demand Congress reform the extremist Supreme Court!
Senate passes long-sought bill to help veterans affected by burn pits
After several days of ceaseless shaming by Jon Stewart, Senate Republicans finally relented and passed the PACT Act by a wide 86-11 margin.
Tudor Dixon comes out of nowhere to win GOP Michigan gubernatorial primary
The DeVos disciple rode a wave of dark money and the disqualification of five other candidates in an absurd signature fraud scandal to victory.
1/6 text messages wiped from phones of key Trump Pentagon officials
The Defense Department wiped the phones of top departing DOD and Army officials at the end of the Trump administration, deleting any texts from key witnesses to events surrounding the January 6, 2021 attack.
Across America, climate change disasters are killing Americans and destroying their homes
EDF: Flooding, wildfires, bomb cyclones, polar vortexes — it's all going to get worse unless we take action NOW! Can you chip in to help EDF fight for our planet's future?
Florida schools ordered to disobey federal LGBTQ protections
Education commissioner Manny Diaz has put Florida teachers in a terrible position by ordering them to disobey federal law or else face potential lawsuits for violating state law if they don't engage in targeted bigotry against LGBTQ+ children.
Credit card balances jump 13%, highest leap in over 20 years, as inflation outpaces wage growth
Soaring prices and slow, too-little-too-late wage growth are putting the crunch to American families. National credit card debt has ballooned to $890 billion — and there doesn't seem to be any end in sight as the Fed keeps aggressively raising interest rates and pushing the nation closer to the brink of recession.
An Ohio man quit his job as a teacher after six years to work at a Walmart because it pays $12,000 more per year
After decades of Republicans gutting teacher pay and propping up multinational corporations at the expense of American small businesses, some educators are being forced into box stores to support their families.
Biden admin okays $5 billion in missile sales to Saudi Arabia, UAE
Peace activists are deeply distraught after the White House resumed the flow of deadly weapons to the authoritarian monarchies, fearing they will help prolong the catastrophic seven-year war that the Saudis have been waging against the people of Yemen.
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FLASHPOINT: China-Taiwan Pelosi visit tensions
Hope...
Today’s Action: Take action to help Kentucky flood victims!
Unprecedented flooding has taken at least 37 lives in eastern Kentucky since last Wednesday night, with hundreds more people still unaccounted for. By the end of this tragedy, thousands of families will have been displaced and their hometowns will never be the same. Some areas already walloped by last week’s storms are now flooding again. Gov. Andy Beshear warned that most of the survivors could “lose just about everything.” After hundreds of rescue missions, countless more remain.
For us here at OD Action, this destruction is personal. Kentucky is our home base. It’s a region that is already disenfranchised, exploited, and bereft of proper support from negligent Republican legislators and corporate predators. Our friends and neighbors are without food, water, and shelter. Many of these people have no idea what their homes now look like, or if they even have homes at all. With more climate disasters surely on the way, the people of eastern Kentucky need our help to bounce back from this horrible tragedy as quickly as possible.
Make a donation to Gov. Beshear’s Team Eastern Kentucky Flood Relief Fund or check out this verified Amazon wish list for flood survivors! Simply sharing donation links with your friends and family could make a huge impact.You can find even more ways to help here. Please pitch in however you can — it all makes a difference!
PS — Please don't forget to sign the petition to tell Kyrsten Sinema to vote YES on Biden's historic climate and healthcare bill, and be sure to follow OD Action on Twitter, Facebook, and Instagram.
@advocacy | 1002 Hull St., Louisville, KY 40204
Sunday, April 24, 2022
While JPMorgan Chase Was Getting Trillions of Dollars in Loans at Almost Zero Percent Interest from the Fed, It Was Charging Americans Hit by the Pandemic 17 Percent on their Credit Cards
While JPMorgan Chase Was Getting Trillions of Dollars in Loans at Almost Zero Percent Interest from the Fed, It Was Charging Americans Hit by the Pandemic 17 Percent on their Credit Cards
By Pam Martens and Russ Martens: April 21, 2022
Jamie Dimon, Chairman and CEO, JPMorgan Chase
Under just three of the emergency bailout programs offered by the Fed to Wall Street, units of the megabank JPMorgan Chase tapped over $6 trillion in cumulative (term-adjusted) loans from September 17, 2019 through the first quarter of 2020. That figure will definitely go higher as the Fed is releasing the names of the banks and the amounts they borrowed on a quarterly basis for its repo loan program.
Thus far, the numbers stack up as follows: a trading unit of JPMorgan Chase borrowed $6.19 trillion from the Fed’s repo loan program from September 17, 2019 through March 31, 2020. (Those are cumulative, term-adjusted figures.) A significant chunk of that money was borrowed at interest rates as low as 0.10 percent. The loans were collateralized with mostly treasury securities and agency mortgage-backed securities (MBS).
A trading unit of JPMorgan Chase also borrowed $400 billion in cumulative, term-adjusted loans from the Fed’s Primary Dealer Credit Facility (PDCF) during 2020. All of those loans were made at a fixed rate of 0.25 percent even though the Fed accepted lower-grade collateral, such as asset-backed securities, for some of the loans.
JPMorgan Chase’s money market funds also needed to borrow a cumulative $24.8 billion from the Fed’s Money Market Mutual Fund Liquidity Facility (MMLF) to bail themselves out during March and April of 2020. Some of those loans didn’t mature until 2021. JPMorgan borrowed from the Fed’s MMLF at rates between 0.50 and 1.25 percent.
While JPMorgan Chase, which has admitted to five criminal felony counts since 2014, was getting these sweetheart deals from the Fed, it was charging Americans who were struggling from the impact of the COVID-19 pandemic as much as 17 percent on their credit cards. You can read one of its credit card customer’s complaints about that 17 percent interest at this link at the Consumer Financial Protection Bureau’s (CFPB) complaint database.
Another JPMorgan Chase customer wrote to the CFPB that their employer filed for bankruptcy during the pandemic, leaving them unemployed. The customer said that when they asked JPMorgan for assistance in reducing the monthly amount they had to pay on their credit card, they were offered the following options: convert to a 60-month repayment plan with interest rates starting at 12 percent; no payment for 90 days but interest would continue to accrue at 14.24 percent; negotiate a payoff of the total principal balance of $14,000 with a 10 percent discount. (Where exactly would an unemployed person get $12,600 when they can’t meet their monthly credit card payment.) You can read the text of that complaint here.
We asked the CFPB database to show us just complaints against JPMorgan Chase since it started receiving those cozy low-interest repo loans from the Fed on September 17, 2019 – months before any COVID-19 cases had been reported anywhere in the world. The database turned up 28,974 complaints. You can browse through them here.
If you want to gauge the compassion that JPMorgan Chase has for its own low-wage tellers, you can read our report here. Despite the five felony counts and a rap sheet that would make the Gambino crime family blush under the leadership of Chairman and CEO Jamie Dimon, JPMorgan Chase’s Board has turned Dimon into a billionaire – on the backs of its low-wage tellers and customers paying double-digit interest rates on credit cards during a pandemic and declared national emergency.
Trump's Friday Meltdown: Begging Iran, Ditching Ukraine, and Blaming Everybody But Himself – 7/31/26
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