Bank Robbery

I got an angry email yesterday from my friend Judith who needed some cash the other day while she was in New York City. She banks at a small regional bank that doesn't have branches in Manhattan. So when she went to a Chase ATM on Madison and 72nd Street, she was shocked to see the notice that if she did withdraw any funds, Chase would charge her $3. She decided against it.

When she got home, she received in the mail the notice required by the newly enacted Credit Card Accountability Responsibility and Disclosure Act of 2009, from her cozy, local East End bank. According to this notice, Judith's bank was now going to charge her $1 for any ATM withdrawals made from banks other than her own. So if she had withdrawn that cash from Chase, the total surcharge would have been $4. That's bank robbery!

Last week I received a notice from Bank of America where my family has had a credit card for years. OK, we have never paid a late fee; we have been fortunate enough to have been able to pay off the balance monthly. Job loss, emergencies, and medical bills haven't prevented us from using credit cards in exactly the way banks hate: we have access to thirteen months of money on twelve months of income. And it doesn't cost us a penny, because we only use no-annual fee cards.

Despite this impeccable credit, we were given notice that our monthly rate for any trailing balances would go up to 11.99%, with a rather complicated formula of adjustable rates that could go as high as 19.99%.

Let's remember that you and I own most of Bank of America now, because TARP, the Troubled Asset Relief Program, passed in a panic in the waning days of the Bush administration, with absolutely no oversight of then Treasury Secretary Henry Paulson, handed out so far, $180.9 billion to American banks. Bank of America has received the biggest handout: $52.2 billion, with Citigroup trailing slightly at $50 billion. Read ProPublica.org and cry.

For months it was a giant secret just who was getting the funding and how much. Now a privately funded site ProPublica.org is the best available source for this information, along with what we have given AIG, the car companies, and how much we have spent to buy up all of those toxic assets (bad mortgages where the banks made money anyway) so that the banks look like they are making money when they aren't. Ironically ProPublica.org was funded by JEHT Foundation, a victim of the Bernie Madoff scandal, and the Sandler Family, the originators of the "pick and pay" variable rate mortgage scheme that brought down Wachovia when it purchased World Savings (Golden West Financial) without doing due diligence.

So one would think that now that we own 611 banks in the US, including the two largest--Bank of American and Citigroup--the banks might be giving us taxpayers a break, a courtesy, a thank you. Despite the fact that we are suffering because we bailed them out, and no one is bailing us out, banks have increased interest rates and fees on credit cards, the only available credit for consumers currently. Try to go to your bank and borrow money, and see how generous those terms are going to be. I just tried to find out what the overdraft and monthly service fees are at Bank of America, and only found "sympathetic" videos. Finally after clicking and clicking, I found the lists of what the bank charges for these most common occurrences. With a twenty year old daughter, believe me, I need to know if these have changed!

And here is a tidbit to make you even angrier: As of today, the Federal Reserve is lending banks money at the rate of 0.50%!!!