Bad Americans: American banks still blindly pushing slide towards depression

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Bad Americans: American banks still blindly pushing slide towards depression

by playwrite27 @ 13/02/2009 – 10:18:12 am

Despite being handed nearly a TRILLION dollars in American tax money to help ease the recession, it has now been revealed that American lenders are doing NOTHING to ease the foreclosure rate. Already, since 2006, over 1 million American homes have been foreclosed on, with nearly 6 million more expected in the next four or five years--possibly even more than that, if banks continue on, unchecked.

The bottom line is, if banks don't stop smarten up and stop the rampant greed--something the recession has yet to stop, apparently--nothing anyone can do...not the president, or more stimulus packages, or anything at all--will stop a slide into a full-blown depression...of course, the govenment, like with the recession, won't admit we are heading for a depression, but trust me--we are.

The mortgage industry has learned ZERO from the recession--they are going along exactly as always...in fact, I got an e-mail just the other day, telling me that I could apply for a mortgage, even with a low income and "less-than-perfect" credit! The same song and dance that got us into this mess, is still being pushed by some mortgage lenders! How sick is that???

Fact: Banks and their lobbyists are doing everything they possibly can, to de-rail any assistance Washington politicians are trying to provide distressed homeowners. Fact; Banks and lenders are also doing all they can to water down legislation regulating their practices so that the economy can be better guided by (hopefully) neutral parties.

I say we label these brainless, greedy little pigs as anti-Aemrican, and send 'em all to Gitmo for a little holiday, yeah?
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3 Comments to Bad Americans: American banks still blindly pushing slide towards depression

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- technomist
- 13/02/2009 @ 10:42:40 am
If only it were a trillion dollars in tax money collected from Americans. Sadly, the Amercian government has sent more than it raised in taxes for quite a long time. Mostly, the money is basically debt paper, much of which has been bought by the governments of countries where people have lower standards of living then the average American.

The people who collect rubbish from the streets in those countries and who sleep under bridges will be surprised that so much of their government money is to be spent, not on their own well-bring, but on keeping Americans in homes they themselves will never be able to dream of. There is little fairness in the world. The world is mad.
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- Sue Riley (Visitor)
- 06/03/2009 @ 09:42:40 am
Banks Injure Economic Stimulus Plan by Jacking up Credit Card Interest

Could banks jacking up credit card interest during a horrendous recession—delay U.S. economic recovery and destroy the expected benefits of the Economic Stimulus Plan?

Millions of Americans now face the prospect of their own economic collapse. As the recession worsens, Americans increasingly can’t pay their credit cards, rent and mortgage payments. Despite these hardships, recently several U.S. banks and credit card issuers—largely jacked up interest rates they charge credit card customers. Consequently it should be expected the large hikes in interest will further choke consumer spending and cause a new surge of credit card defaults and home foreclosures? During the 1930’s banks inflamed Americans and the Great Depression by similarly raising consumer interest rates that forced millions of people and businesses to default on loans. Houses could not be sold. Perhaps Americans in 2009 should ask Congress ASAP, “Could banks jacking up credit card interest during a horrendous recession—delay U.S. economic recovery and destroy the expected benefits of the Economic Stimulus Plan?”

Congress has proposed spending billions of taxpayer dollars to pay for an Economic Stimulus Plan to create jobs, generate bank lending and stimulate consumer spending. How could any Economic Stimulus Plan be expected to succeed if Congress doesn’t act to limit the rate of interest banks charge credit card purchasers? During these bad economic times credit card lenders need to be limited to twelve percent. The current high credit card interest rates discourage consumers from making card purchases at retail and other businesses that would help stimulate economic recovery. Unless credit card interest rates are strictly regulated, credit card issuers could become the main recipient of the Economic Stimulus Plan, sucking up stimulus dollars from Americans forced to pay higher credit card interest on debts they incurred prior.

Here we go again? U.S. banks are duplicating in part through credit card lending some of the same problems that caused the sub-prime mortgage collapse and real estate crash. Except this time, U.S. banks aren’t selling packages of so-called mortgaged-backed securities to investors; the banks are selling “credit cardholder debt” to investors. Under this operation, after the bank sells a credit card holder’s debt at a specific interest rate, the selling bank can keep raising the cardholder’s interest rate—keeping part of the higher interest charged: the bank will have little or no exposure for the sold debt. This operation gives the bank little or no incentive to lower the credit card holder’s interest rate after they raised it. The bank can also profit from subsequent fees charged the credit card holder. Sound familiar? Do the words Sub-Prime Mortgage come to mind? Sub-prime mortgages sold by banks to investors, were frequently defaulted on by borrowers because they could not pay higher interest rates provided for in mortgage loan agreements. At least purchasers of Sub-Prime loans had real estate to secure the mortgages. “Credit card debts sold by banks” generally provide debt-investors with only the debtor to look to for repayment.

Banks selling credit card debt to investors has the potential of becoming a scheme that could cost U.S. taxpayers and the global economy billions. Congress needs to limit fees and interest rates banks can charge credit card holders. That would eliminate much of the incentive for banks to resell a credit card’s debt then keep raising interest rate on the credit card.

Meanwhile while U.S. banks continue to Jack Up your credit card interest, keep in mind these are some of the same financial institutions that failed to sufficiently provide the U.S. Government with an accounting explaining how they spent billions of “bailout dollars” provided by U.S. Taxpayers.
- - playwrite27
  - http://www.davidtennant.blog.co.uk
  - 06/03/2009 @ 12:46:00 pm
  Thank you for your rather lengthy reply. It's interesting reading, but totally wasted on me. Mainly because not only do I no longer have a bank account, I no longer have any credit cards--haven't even had a Visa debit card in nearly a year.
  
  I think you will find that, like me, more and more Americans are ditching credit cards--or paring them down.
  
  I haven't had any credit card debt on my books, over 15 YEARS....because I saw the trap of credit cards 20 years ago, and heeded the warning.
  
  If I absolutely HAVE to have a credit card, I can EASILY buy a PRE-PAID credit card, for just the amount I need. Even with a 5 to 10 dollar fee, added on, this is still more affordable for low to moderate income Americans, than getting into deeper debt with often exorbant--and frequently invisible-- credit card fees.
  
  The Economic Stimulus Plan should not so much do as you suggest it do, but it SHOULD go after banking FEES. FEES, and banks who allow consumers to DELIBERATELY go over their card limits---so they can take on even more exorbant fees.
  
  I don't see you railing against that? Not sure what the purpose of your credit card manifesto is, but again, thanks for commenting.
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