Another example...blatant collusion...

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r101958's picture
r101958
Status: Martenson Brigade Member (Offline)
Joined: Aug 24 2008
Posts: 257
Another example...blatant collusion...

Here is a good one. I received 4 notices yesterday from BAC advising me (and my wife) of changes to our credit card contracts. I don't normally really care about these things because we carry 0 balances on all our cards. I opened them anyway and found that they are now charging 3% of transaction for each time the card(s) are used.....but here is the kicker....there is a minimum $10 per transaction charge. Now, how many folks do you suppose didn't bother reading the notice? Guess what is going to happen when they open their bill? To add insult to injury, today the Administration signed a bill putting a stop to this type of stuff....but wait, it doesn't go into affect until May 1st. So, that means the changes they just instituted aren't covered by the new law.

Does anybody here think this is a coincidence? The words duplicity and collusion seem quite fitting.

 

r101958's picture
r101958
Status: Martenson Brigade Member (Offline)
Joined: Aug 24 2008
Posts: 257
Re: Another example...blatant collusion...

No replies yet? Wow.....I thought for sure there were some other BAC customers out there with the same experience...or maybe now all BAC customers are rifling through their garbage trying to find the notice that they threw away?  Anybody have an opinion on this subject....am I reading too much into it? Did they just 'happen' to send these notices out two days before the Gov't passed a new credit card law?

BSV's picture
BSV
Status: Silver Member (Offline)
Joined: Jan 26 2009
Posts: 170
Re: Another example...blatant collusion...

r101958:

The lack of response could be related to the minefield nature of your post. We have a lot of good people in this community (I love them all) who feel that conspiracy is everywhere. There is another camp (which I'm in) that tends to accept that yes, there may be some conspiracies out there, but perhaps not everything is a conspiracy. There may even be a third group whose members feel that there are no conspiracies at all. Choose your group according to your beliefs. If you want to get flamed or get engaged in an unpleasant exchange, just offend one of these groups!

Okay, with that preamble, here are my tiny thoughts on this: A few weeks ago I noticed that our local community banks (which are all solvent, by the way, unlike the big boys, which are virtually all insolvent) had made a subtle change in their policies regarding automatic renewal of CDs. Here in Central Texas where I live, a reputable community bank started renewing expiring CDs automatically at an interest rate of 0.5%. That's half of one percent if you're not into financial stuff. The expiry notice did not mention the renewal rate; it just said that we will renew your CD if you don't withdraw the money before such and such date.

But if, when you received the CD expiry notice in the mail and phoned the bank, you could renew at a rate at least four times better. Being a student of human nature, I realized that a significant percentage of the bank's customers would not bother to phone and inquire about the renewal rate. This passivity allows the bank to make huge profits on the spread between the cost of funds (what they pay on time deposits) and what they receive when lending money to customers.

There are precedents for this. The Fed protects banks, especially during periods of economic stress. The Fed allows banks to rebuild their capital when this is needed. I concluded long ago that the very best franchise a local investor could choose is putting money into the stock of a well managed community bank. Perhaps this is not true in every state of the union but it is true here in Texas. If I had to choose between purchasing a McDonald's franchise or investing in a community bank, I would pick the bank every time. McDonald's can't leverage their sandwiches but your bank can leverage its deposits. If your McDonald's franchise gets into trouble, you can't count on any help from the Fed. Smaller banks can't either, but if the banking system runs into trouble, the Fed bails the banks out. Hey, I'm oversimplifying, but the point is valid.

It's entirely possible that local banks have been following the automatically-renew-at-a-low-rate policy for some time. But until now it has not been a major issue because rates were at least reasonable. Now, people who have worked hard and saved money are being robbed by exorbitantly low interest rates on their savings. If the true cost of money were allowed to float, both short and long term interest rates would be much higher. This amounts to confiscation of the assets of those who were thrifty and saved money instead of spending it. It is not local banks who are doing the robbing. It is the Federal Reserve and the U.S. Treasury.

Now, to credit cards. That's a big business. It's also a very lucrative business. Basically, credit card issuers get to change the terms any time they like. That being the case, they will do so to enhance their profits, especially when the parent bank is financially stressed. This is a terrible time to carry a balance on a bank credit card. The interest rate on balances carried forward is exorbitant. I prefer the term usury, but that's a legal concept. Basically, usury is illegal. But if you have a powerful enough lobby and you grease enough palms at the state and federal level, you can charge exorbitant fees and it's not officially considered usury. Do you suppose that credit card companies could do the things they do without support from powerful friends in Congress? For that matter, do you suppose that those annoying telemarketers could get away with what they do without support from powerful friends in Washington?

How does one ensure such powerful support? Simple. One pays for it. Congresspersons are 100% out to protect the interests of the voter -- unless someone persuades them otherwise. Such persuation is denominated in dollars. After all, there needs to be a medium of exchange for political ideas, and the dollar will suffice nicely. Our political system is corrupt. It has been so for years. Perhaps is it time that we recognize that and begin the grass roots work needed to reform it. Get elected to Congress and you're in Fat City. After a couple of terms your job security is like a bank vault. The Washington Establishment treats you like royalty and you're in the Washington Social Registry. It is time we all recognize the system for what it is. And what it is is corrupt.

This is probably the strongest post that I've made since joining the community. It happens that I'm a retired financial guy and I'm well read on this stuff. Anyway, you started this thread and this is my response. It will be interesting to see if others choose to add their three cent's (inflation, y'know) worth.

 

 

 

 

SPM's picture
SPM
Status: Silver Member (Offline)
Joined: Mar 20 2009
Posts: 241
Re: Another example...blatant collusion...

I'm glad I have a credit union.

Definately a financial guy. I'm happy I know what the acronym DJIA means.

Ed Archer's picture
Ed Archer
Status: Martenson Brigade Member (Offline)
Joined: Oct 12 2008
Posts: 225
Re: Another example...blatant collusion...

@BSV I think you are exaggerating how touchy the various camps are. :)

I didn`t reply because I don't have a credit card and am glad about not having it.

Ed

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: Another example...blatant collusion...
r101958 wrote:

Here is a good one. I received 4 notices yesterday from BAC advising me (and my wife) of changes to our credit card contracts. I don't normally really care about these things because we carry 0 balances on all our cards. I opened them anyway and found that they are now charging 3% of transaction for each time the card(s) are used.....but here is the kicker....there is a minimum $10 per transaction charge. Now, how many folks do you suppose didn't bother reading the notice? Guess what is going to happen when they open their bill? To add insult to injury, today the Administration signed a bill putting a stop to this type of stuff....but wait, it doesn't go into affect until May 1st. So, that means the changes they just instituted aren't covered by the new law.

Does anybody here think this is a coincidence? The words duplicity and collusion seem quite fitting.

r101958,

I had to re-read your post a couple of times to see if I really understood what you were saying.

If I have understood you correctly, you are saying that if you go to Best Buy and pick up a $700- computer that you personally will be charged an additional $21.00 (3%) for the privilege of using your BAC card?

And that if you use your BAC card to buy a couple of grocery items totaling $7.50 that BAC will charge you an additional $10.00 on top of the groceries?

I'm sorry. I have a hard time believing that.

Now if you were to say that the charge to the Merchant was a 3% transaction fee with a $10- minimum, that I could believe.

Please clarify. Thanks.

r101958's picture
r101958
Status: Martenson Brigade Member (Offline)
Joined: Aug 24 2008
Posts: 257
Re: Another example...blatant collusion...

Sam..you are mostly correct and I stand corrected. Here is what it says exactly:

"What is Happening:

We are increasong certain transaction fees on your account.

Amendment to Your Credit Card Agreement:

Effective on June 1, 2009, the transaction fee (Finance Charge) we assess on each of the transactions identified below will be equal to 4% of each such transaction (Fee: Min. $10):

-ATM Cash Advances

-Balance Transfers

-Bank Cash Advances

-Cash Equivalents

-Check Cash Advances

-Direct Deposit Cash Advances

-Wire Transfer Purchases"

So you are right, it is not for all transactions and they are confined to a certain group. However, I still imagine that some people will be seeing some extra charges that they had not expected.

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: Another example...blatant collusion...

Hi r101958,

Now that information I can believe.

What you're seeing is the greedy banksters sucking the consumer dry one step at a time. Sort of the frog in the water trick. I feel sorry for all the people out there living on the edge and getting hammered by the slime-ball banksters that are already being supported by us taxpayers!

r101958's picture
r101958
Status: Martenson Brigade Member (Offline)
Joined: Aug 24 2008
Posts: 257
Re: Another example...blatant collusion...

   Yes I agree Sam. I guess I was and still am upset with all the efforts to have us pay for bad decisions made by others. I also got some unwelcome news today regarding the pension plan where I work. Contributions to the pension plan were discontinued some time ago but now lump sum payments for terminated/RIF'd employees have been halfed or possibly done away with completely. This means that employees that had been expecting to get a lump sum pension payment if they are RIF'd can no longer expect that money. Not really a good thing for the employees.

Ready's picture
Ready
Status: Platinum Member (Offline)
Joined: Dec 30 2008
Posts: 917
Re: Another example...blatant collusion...
Zombie210 wrote:

@BSV I think you are exaggerating how touchy the various camps are. :)

Ed,

While BSV may or may not be correct about this specific thread, there are definitely issues here and touchy subjects.

Here are 2 off the home page without even looking hard!

http://www.peakprosperity.com/blog/albert-bartlett-growth/10466

http://www.peakprosperity.com/forum/definitive-conspiracy-theorist-new-world-order-mad-max-alex-jones-fan-club-thread/14326

With respect, it is sometimes difficult to bring a counter idea to this forum without getting flamed. I tend to pick my battles since we all have other important things to do, and arguing here can be a real time waster unless there is some light at the end of the tunnel, some idea transferred that the listener was not ready for, but ultimately received. These exchanges are few and far between, so we retreat to our foxholes and pick the important things to address.

I recently witnessed a situation where a poster who always sees and presents the positive side, never initiates or succumbs to flaming, and has a truly intelligent thing to say about most every topic, got taken to the mattresses over something someone thought he might have meant. Sheesh! If you look at the posts, it wasn't there, but he spent 30 minutes or more defending himself and smoothing things over. Sorry 'bout that Doc.

I think CM.com has reached a critical mass where the opinions are as varied and the personalities as strong as that in congress.

You just have to pick your battles, although not necessarily your sides.

Cheers,

Rog

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