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What the B@nk?!

Submitted by on April 14, 2009 – 3:01 pm

Believe it or not, all of these outrages are true:

Bank of America foreclosed on a home in Florida that didn’t even have a mortgage.

A couple bought a vacation home and was very proud to not have any mortgage on it.  Through a series of miscommunications, Bank of America mistakenly kicked out the tenants staying there and boarded up the house for foreclosure—even after the owner talked to the bank manager and explained the situation.  There was damage to the house, and some property was missing.  Check out the full story at The Consumerist.

The CEO of Goldman Sachs claims that his company is doing “God’s Work”

Goldman Sachs CEO Lloyd Blankfien actually claimed that the company was doing “God’s Work.”  The comment was made in reference to the announcement that Goldman Sachs would be providing $500 million to help small businesses.  Huffington Post covered the story.

61% of homeowners with a subprime mortgage could have gotten a prime one

The Center for Responsible Lending has a whole list of facts on foreclosure.

Student loans are not dischargeable in bankruptcy

The Student Loan Borrowers Assistance site has a great article on student loans and bankruptcy that explains how to deal with students loans when filing for bankruptcy.

Big Banks donate MORE to Congress than Big Oil.

So far in 2010, Congress has received over $24 million from Securities and Investment Firms, Commercial Banks, and Miscellaneous Finance companies, compared to less than $6 million from Oil & Gas.  And the Finance, Insurance & Real Estate sector outranks Big Oil again when it comes to money spent on lobbying – they spent $464 million in 2009, compared to $409 million from Energy & Natural Resources groups.  See the Center for Responsive Politics for more details.


Some credit cards charge 79.9% interest.

Read all about it from the Associated Press.


There is a new foreclosure every thirteen seconds.

 See the Center for Responsible Lending for details.


Bankers remove $7 from the economy for every $1 they create.

  What we always suspected is now empirically proven:  big bankers are a net drain on society.  Bankers don’t have to pay for the economic messes they make (hello, bailout dollars) – so nothing stops them from gambling with our savings while running off with huge bonuses.  See the study about this here (PDF).

You can’t sue your credit card company in court.

You have to use a private “arbitrator” to settle any disputes.  But – surprise – arbitrators side with credit card companies over 90% of the time.  Read more about “Forced Arbitration” in this report from Public Citizen (PDF).


The FTC receives more complaints about the debt collection industry than any other (500,000 complaints in 5 years) and has only acted on EIGHT of them.

 This is why we need a dedicated consumer protection agency.

Worst of all, the hundreds of thousands of complaints the FTC gets only represent a tiny fraction of the abuse that goes on.  Debt collectors clearly aren’t afraid to break the law and intimidate borrowers into making payments using all kinds of dirty tricks.  Abuse is their business and they’re all too good at it.  Read more about debt collection here, and see this PDF from National Consume Law Center for the FTC stats.



Bank of America broke into a homeowners’ house and stole her parrot after she missed one mortgage payment.

Crazy, but true.  Angela Iannelli of Pittsburgh, PA lost her parrot when a BofA contractor “mistakenly” broke into her home.  She later recovered the parrot, but is suing BofA for being grotesquely stupid. Read more about it from the Wall Street Journal.


The banks are using our bailout dollars to lobby against reform – they’ve spent $500 million, or $1.4 million a day, since the beginning of last year.

Talk about back-stabbing.  But it’s the truth.  See the Center for Responsive Politics for stats on lobbying and campaign contributions.


Banks change the order of transactions in your checking account to trigger overdraft loans.

It’s true, and hugely profitable for banks.  Overdraft loans drain $23.7 billion from accounts every year, and you can lose hundreds of dollars in a single day to these obnoxious loans.  One of the tricks banks use to set up the overdraft trap is rearranging your transactions, making you more likely to overdraft multiple times per day.  Read more about “hi to low transaction ordering” and overdraft loans in generalhere.

There are more payday loan stores in the US than McDonald’s restaurants.

Actually, there are more Payday Lending stores than McDonald’s and Starbucks combined.  Our nation is home to over 23,000 payday lending outlets, but “only” 12,401 McDonald’s and about 8,500 Starbucks.  See this PDF for the proof.

In case you’re wondering:  Payday loans are nasty short-term loans where interest rates reach 780%, according to the industry’s own website.  Payday lending is so nasty, it’s illegal to issue a payday loan to a member of the military.  Click here for more info how payday loans they work and who receives them.  And tell Congress to create a agency to outlaw payday lending for everyone.

There is NO national cap on interest rates.

As far as the federal government is concerned, lenders can charge anyinterest rate they like.  And lenders don’t hesitate to drive rates through the roof:  APRs charged by payday lenders can reach 780%, rates for refund anticipation loans can be 1500%, and on overdraft loans they can reach five digits!

Some states do impose “usury” caps on lenders chartered in their states.  But plenty of states— such as Delaware and South Dakota — have no cap at all.  National banks flocked to those states because of these bank-friendly laws (which explains why you usually send your credit card payment to one of these states).  Read AFFIL’s History of Usury for more.

Wall Street has created something called “life settlements” that pay money to investors when people die.

Yes, Wall Street is now betting on your death.  Creepy and all too true.  Read all about it from The New York Times.

One in four credit reports contains a serious error.

Sad, but true.  As US PIRG puts it, “The most valuable thing we have is our good name. The most common reflection of our reputation as a trustworthy consumer is our credit report. Unfortunately, the information contained in our credit reports, which are bought and sold daily to nearly anyone who requests and pays for them, does not always tell a true story.”  Read their study about faulty credit reports here.

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