Bailout Banks Hike Up Charges

CBS Evening News: Financial Institutions That Received Bailout Funds Also Charging Consumers Higher Interest Rates, More Fees

(CBS)  With the economy in a downturn, there's one thing that's going up: bank fees and interest rates charged to customers. Including those charged by bailout banks that have gotten billions from taxpayers, reports CBS News investigative correspondent Sharyl Attkisson.

Take Bank of America and JP Morgan Chase. They got a combined $70 billion in bailout funds. Yet since then, they've doubled credit card interest rates on some customers.

"This means that suddenly their minimum payment is far higher than it was and it may destabilize that family overnight," said Travis Plunkett, with the Consumer Federation of America.

That's not all. At JP Morgan Chase, customers with "no annual fee" cards suddenly found themselves charged a $120 annual fee. Citigroup is advertising loans with annual interest rates of up to 30 percent.

"People are particularly outraged because now these companies are receiving a lot of taxpayer money," Plunkett said.

That kind of outrage led to Tony Bonetti, of California, to start a petition to abolish ATM fees at bailout banks. If that seems extreme, consider that last October, the same month Wells Fargo got $25 billion in bailout funds, it boosted ATM fees for non-customers by 20 percent.

Bailout banks are even charging fees for the jobless to get their benefits. In New Mexico, engineer Arthur Santa Maria had to pay Bank of America a fee to use his government-issued unemployment debit card - and the bank charged him 50 cents more when he called to ask his balance.

Bailout banks and their industry representatives say their fees and interest rates are "competitive," "reasonable," "responsible" and "satisfy consumer needs."

In reality, consumer advocates say there's not much you can do but wait until next year, when new federal rules take effect to fight some unreasonable frees and high interest rates.

[pepperwood2]

Why this can't be happening? Wait until BO & Congress find out? They'll be replacing another batch of CEO's. The nerve of these Banks. How can they get away with this under the noses & watchful eye of the President & Congress? Why you would think they're in this thing together. Charging excessive fees & charges along to the consumer so they can pay off their debt. Why we'll show them. We'll just go out an borrow more to run our personal debt up to help them out. cackle cackle cackle. Fooled you twice.

A group called Wall Street Watch is out with a report that finds that ?Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists?

[T_from_Austin]

If you play with a snake long enough you're going to get bit. The problem whose the snake the bank or the member of Congress. The answer to this problem is for people to quit putting their money into the commercial banks. Instead put it in credit unions, where you have a voice.

[johnb8888]

"In reality, consumer advocates say there's not much you can do but wait until next year, when new federal rules take effect to fight some unreasonable frees and high interest rates. "



And just why did the cowards in Congress make this bill ineffective until 2010?

Payoffs?

[gary4books]

People may consider a credit card provided by a credit union as less of a problem. My credit union has good rates and reasonable rules.

[mzilikazi-2009]

I have found opensecrets org to be an interesting and useful resource for summarizing contributions made to candidates and parties. If you are wondering how much money a candidate or party was given by affiliates of large institutions during their campaign this seems to be a good place to do light research IMO.

[tincup356]

Are we ready to say revolution yet? Congress took almost 2 billion in lobby dollars from these same bankers...last year....congress gave them billions at less than 1 % interest...and this is how our tax money is used against us,,,,,,it is time to clean Washington out,,,,I'm tired of hearing they are the only ones qualified to straighten out this mess,,,,congress wrote the laws that let the banks get away with this robbery,,,,As far as I'm concerned they are ALL committing HIGH TREASON.

[marx4prez]

Don't like fees and high interest, then don't borrow the money in the first place. Who put a gun to your head and said, "Sign here or i'll shoot." Give me a break America, this is a nation of cowards and whiners. I have 2 checking accounts, neither one will ever get to my preset $1000 limit. I keep my money in water/fire proof black boxes, in multiple locations, if I want money, I just go to one of the boxes and pull it out "duty free." How the hell am I going to pay one of these m.f.'s money, to get MY money back. This is capitalism at its finest, and if you don't like capitalist rules, then you can go and live in a country where things make sense and there is more justice than complex laws to hide criminals, not here obviously. My philosophy: "If you don't want it, then don't touch it, because if you break it, you'll have to buy it."

[wdh3007]

If banks are doing this then people should pull all their money out of the banks that took bailout money and claim bankruptcy because losing customers will eventually hurt the bank that raised it's interst rate to begin with they can keep their increased rates...

[cbsblogger]

A Tea party needed but it needs directed at the entire banking issue, the banks themselves, their CEOs, their rip-off of America and our do nothing in their pocket government regulators such as Geithner and Summers.

[bstine1]

Why am I not shocked. The problems with the banking industry are so complex and go back so many years that just like the repair of a computer it may be best to wipe the disk, reboot and start over. Initially I was not in favor but now I think a carefully controlled plan of temporay nationalization is the only answer. CEOs such as Bank of America's Ken Lewis need to be held accountable by immediate termination. Major share holders should be asking for the same however since they are too timid and / or too corrupted to act, the drive will have to come from the tax payer forcing our government to take action.

[Cypressmyst]

This is outrageous. I never had a problem paying my debts, afterall the credit card companies were there for me when I needed them, however if these a#%$#$% want to change the rules of the game half way through...watch how fast I declare bankruptcy and they get nothing. Really stupid move guys.

[pachamaxi]

banks, lawyer and car salesman, are the biggest rip off in this country.
Fix that and we get back in a prosper economy.

[kanbe16]

I don't recall the exact year want to say 2006 George bush signed into law, where the credit card companys could raise the min amount due by three times to "help" the consumers pay it off quicker, then by doing that people including myself could not pay thier monthly min due as they were already on a budget. so if you defaulted or were late on ONE card, all the cards went to 30 percent, based on your credit report, it did not matter if you struggled to keep in good standing with chase and had difficults with citi, chase raised the interest, this in turn made the monthly payment so high many people defaulted. This has been going on for several years hurting the stuggling consumers, now it is effecting those that were paying and in good standing they need to be investigated starting from the top down, there is more going on then we are told, and Bush and his people had thier hands in it.

[debinok1]

Banks, Big Oil and Billionaires, three wonderful reasons the economy is in the tank. Yet our wonderful elected officials, who live on our tax dollars and get some of the best health care on our tax dollars, don't want to help the little guy in any way, shape or form. Go figure.