Citigroup will easily lend you $5000 (@30% p.a. ;)

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

De bankiers in de USA zijn nog steeds niet op aarde geland (ondanks dat ze
de vliegtuigen hebben opgegeven).

Hun enige vrienden zitten in het Congress en de Senaat (voornamelijk
Republikeinen en een enkele Democraat), en een paar in de regering (o.a.
Summers en vice-president Biden).

Als ze op deze manier door blijven gaan, krijgen ze echt te maken met een
opstand.

De banken die géén TARP-gelden hebben ontvangen hebben hun tarieven NIET
verhoogd, de banken die WEL TARP-gelden nodig hadden wél. Zie de grafieken
in het originele artikel.

Groet / Cees

PS. Citigroup deelde eind vorig jaar nog folders uit op o.a. stations in
België, om nieuwe rekeninghouders creditcards aan te smeren!

http://online.wsj.com/article/SB123958015246312123.html
Bailed-Out Banks Face Probe Over Fee Hikes
By DAVID ENRICH, MARSHALL ECKBLAD and MAURICE TAMMAN

The committee overseeing federal banking-bailout programs is investigating
the lending practices of institutions that received public funds,
following a rash of complaints about increases in interest rates and fees.

Since the Troubled Asset Relief Program was launched last October, banks
bolstered by capital infusions have boosted charges on a wide range of
routine transactions, hiked rates on credit cards and continued making
loans criticized as predatory by consumer advocates. The TARP funds are
intended to open lending spigots and make it easier for people to borrow
money.

Last week, for example, Bank of America Corp. told some customers that
interest rates on their credit cards will nearly double to about 14%. The
Charlotte, N.C., bank, which got $45 billion in capital from the U.S.
government, also is imposing fees of least $10 on a wide range of
credit-card transactions.
[Mounting Fees]

Citigroup Inc., another recipient of government cash, is trying to entice
customers to borrow at high rates. "You could get $5,000 today,"
Citigroup's consumer-finance unit wrote in fliers mailed to customers. The
ads don't disclose that the loans often carry annual interest rates of
30%.

The interest rates "compare competitively to similar offers in the market"
and vary depending on the creditworthiness of borrowers, a Citigroup
spokesman said. Citigroup has received $50 billion in capital from
taxpayers, and the U.S. government will soon own as much as 36% of the
company's common stock.

"To continue to offer competitive products and services and responsibly
lend in this current environment, we must adjust our pricing," said a Bank
of America spokeswoman about the company's new fees and interest rates.

The U.S. government's ownership stakes in hundreds of banks, as well as
political ire stoked by lucrative pay and perks, are raising the specter
of new regulation on basic banking practices. First-quarter results due
starting this week will be scrutinized for signs of how much
taxpayer-funded capital is being funneled into loans.

Elizabeth Warren, chairwoman of the Congressional Oversight Panel, the
body named by Congress to oversee the federal bailout, said the panel is
working on a report examining instances of potentially inappropriate
lending by banks that got taxpayer capital. "The people who are
subsidizing the activities of the banks through their tax dollars are the
same people who are furnishing the high profits through consumer lending,"
Ms. Warren said in an interview. "In a sense, we're asking taxpayers to
pay twice."

Last month, a Senate committee narrowly approved a bill that would rein in
many credit-card marketing and pricing policies, including ballooning
interest rates. Proponents of the legislation say many of the largest card
issuers have received government aid and so should be subject to greater
scrutiny.

Banks say that raising fees and rates, even on low-risk customers, is a
legitimate way to recoup some of the costs of the bad loans still on their
books. They also say taxpayers have a financial interest in seeing the
industry quickly return to profitability. Any revolt over price hikes
could intensify the crisis by depriving institutions of a key income
source, say banks. New restrictions on these lending practices "may truly
have an impact on profitability," said Gerard Cassidy, a bank analyst with
RBC Capital Markets.

The controversy underscores the quandaries of Washington's dual role as
owner and overseer of U.S. banks. While shoring up the banking system is a
goal of federal regulators and the White House, what is good for the
bottom line of banks isn't necessarily good for their customers.

So far, regulators are focusing mostly on nursing banks back to health.
"To my knowledge, the TARP funds weren't supposed to change
consumer-protection requirements that apply to all institutions,"
Comptroller of the Currency John Dugan said in an interview. Mr. Dugan's
office oversees most of the nation's biggest banks.

One bank that advocacy groups like the Consumer Federation of America and
the Consumers Union are watching is Pacific Capital Bancorp. The Santa
Barbara, Calif., bank-holding company got $180.6 million from TARP and is
an issuer of so-called tax-refund anticipation loans. These are loans made
to people who want immediate access to their state and federal tax
refunds, and typically have annual interest rates that exceed 100%.

Debbie Whiteley, a Pacific Capital spokeswoman, said the bank isn't using
TARP capital to make tax-refund loans. Still, the government infusion is
helping to improve the bank's overall financial health, according to the
company, meaning it will be in better position to make a variety of loans.

Regional banks U.S. Bancorp and Wells Fargo & Co. offer "checking account
advance" loans that allow customers with direct-deposit accounts to access
funds before they are credited to a customer's account balance. The
short-term loans carry annual interest rates of about 120%.

U.S. Bancorp and Wells Fargo said the loans satisfy customer needs for
emergency credit. The cost to borrowers is relatively low, according to
the banks, because the loans usually are repaid within weeks.

Last year, U.S. banks and savings institutions collected $39.5 billion in
deposit-account charges, and fees for everything from ATM usage to balance
transfers accounted for about 25% of the industry's total revenue,
according to the Federal Deposit Insurance Corp.

A big chunk of that revenue comes from overdraft fees. The industry's
median overdraft charge is up 10% to $27.50 in the six months since the
government began pumping capital into banks, according to Moebs Services
Inc., a Lake Bluff, Ill., research firm. The median charge previously held
steady for five years. Meanwhile, the average annual credit-card rate has
climbed to 12.35% from 11.38% six months ago, according to
CreditCards.com.

Don Mawson, a 49-year-old who works in Boston for State Street Corp., said
he called Capital One Financial Corp. to complain about its decision to
increase the late-payment interest rate on his credit card to 29.4% from
7.9%, even though he has never missed a payment. Mr. Mawson says the bank,
which got $3.6 billion from the federal government, declined his request.

A company spokeswoman declined to discuss Mr. Mawson's account but said
Capital One is increasing some interest rates "to reflect the current risk
environment." Unhappy customers can cancel their accounts, she added.

The government has demanded that TARP recipients provide detailed accounts
of what they're doing with taxpayer-funded capital. According to an
analysis of federal data by The Wall Street Journal, overall loan volume
at 470 banks that got TARP capital was down 1% from the quarter ended
Sept. 30, compared with a 2.2% decline at banks with no capital infusion
as of March 20.

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