James Clay Fuller

Things We're Not Supposed to Say

Sunday, April 17, 2011

You can bank on them to do you dirt

The big banks that, with the help of other financial institutions and federal and state “regulators,” caused the near collapse of the American economy in 2008 are bigger, richer, more powerful and more arrogant than they were before the near meltdown.

What was a lousy experience for the rest of us, and disaster for millions, actually strengthened the big banks that brought all that pain upon us, and made them more free from restraint than they were before.

They couldn't have done better for themselves if they'd planned the whole thing.

Thanks to easily bought politicians of both major parties and the extreme right-wing activist court of John Roberts et al, they all but own the U.S. government. They fear no one, are beholden to no one and, frankly m'dears, don't give a damn what anybody thinks of them. They continue to cheat Americans by the millions, and to behave as though they are beyond the reach of law, which, in fact, is the case. They are untouchable.

I've been thinking about this, watching the progress of their march to imperviousness in anger and frustration since the first days of the big collapse, but in the past week it came home to me in a much more personal way. I'll explain in a bit, and please excuse the use of a personal story.

Corporate media refuse to tell many of the stories of bank fraud, as they decline to tell many of the stories that would show the public the corporate takeover of government, but the facts are available to those who recognize that they won't learn much of importance from CNN.

The country's biggest newspapers do cover the very biggest, the unduckable stories about the banks, though they're not always prominently displayed.

The Root, an on-line magazine published with a black perspective, recently ran a story by Thomas Moore about a late-2010 investigation by the Florida Attorney General's office that found that Bank of America, GMAC Bank, JP Morgan Chase, Wells Fargo and several others are guilty of foreclosure fraud.

Moore noted that “nothing has been done by the Justice Department or any other federal officials” to bring criminal charges against the banks. Since I wrote this, the New York Times has printed an interesting commentary: http://www.nytimes.com/2011/04/19/opinion/19nocera.html?_r=1&hp

The Los Angeles Times – much damaged but still a better newspaper than most – ran an article on April 14 of this year noting that a two-year investigation led the Senate Permanent Subcommittee on Investigations to conclude that Goldman Sachs Group profited hugely from the financial crisis by “betting billions against the subprime mortgage market, then deceived investors and Congress about the firm's conduct.”

Some of that committee's findings will be submitted to the Justice Department and the Securities and Exchange Commission for possible criminal or civil action, the L.A. Times said.

Don't hold your breath waiting for charges to be filed.

On April 12, the New York Times noted in an editorial that JPMorgan Chase profited greatly from an investment that it knew was bad, but sold to clients anyway.

On March 31, 2010, the New York Times printed an editorial that rehashed the oft-discussed fact that big banks still owe taxpayers billions of dollars for bailouts, but continue to refuse to make small business loans. The banks pay individual customers almost nothing on savings, and follow other policies that harm the country and individual citizens, but nevertheless got approval from the Federal Reserve to increase dividends and take other steps that increase the wealth of major shareholders (including bank officers, of course).

That March 31 editorial also pointed out that Fed approval for bigger dividends came despite the fact that the banks are still on shaky ground on such things as properly valuing their mortgage holdings, and maintaining adequate reserves.

They are, in fact, too vulnerable to future economic upheaval to be giving away more money in dividends.

Several news outlets noted early this month that the country's biggest banks and federal “regulators” cut a deal which will put “closed” to the outrageous story of mortgage foreclosure fraud. The deal lets the banks off the hook for their blatant crookedness with a finger tap on the wrist, leaves millions of mortgage borrowers utterly screwed, and fails to install tougher rules to prevent the continuation of the abuses. The banks simply refused to stop foreclosure abuse, so the feds gave up without a fight.

No officer of a large bank has been charged with a crime, despite now countless reports of obvious fraud and corruption. Dozens of high-level and medium-level bankers should be in prison by now; few, if any, will be tried, let alone convicted.

Various government agencies continue to abet the criminals in their deceit.

We the people put billions of dollars into the banking system after the collapse. Far more than was at first reported, in fact. Some of the loans by the Fed to banks were kept very quiet, and only recently have started to come to light. The stories, when reported by corporate media, generally are printed on the inner pages of business sections, couched in terms the average citizen wouldn't understand if they could be pushed into reading them.

Billions of dollars of our money was used by the biggest banks to buy somewhat smaller banks, thus further centralizing banking in this country and all but doing away with genuine competition -- not that there was a whole lot of competition before 2008.

Too big to fail has become too big to restrain in any way.

Members of Congress of both parties and the Obama administration crawl before the bankers. They form barricades of lies and half truths to protect the bankers from angry citizens. And, of course, they pull in billions of dollars in campaign funds, soft and hard, visible and hidden, from the banks.

And, oh yes, there's a lot of job mobility between Congress and the White House on one side and the banks on the other. The pieces of the Obama administration that deal with the economy look like a branch office of Goldman Sachs.

Given the circumstances, you'd have to be truly silly to expect anything but abuse from any large bank with which you do business.

If you have any relationship with a big bank, it is screwing you and, given any opportunity it will do worse. No regulator will protect you, existing consumer protection laws are weak and largely unenforced, and the right-wing extremists in Congress are gearing up to do away with what little regulation is left.

One of the biggest scams is entirely legal:

Banks pay almost nothing on deposits these days. A one-year certificate of deposit, which paid a paltry 3.8 percent at many banks in 2006, now will get you an interest rate of half of one percent – 0.5 percent – to perhaps 1.5 percent at the most generous of banks. Money in a savings account, if you leave anything there, now draws 0.5 percent, on average – less in some places.

On the other hand, most people who have bank credit cards pay upward of 14 percent interest on balances. Some pay 20 percent and even more. It gets worse instantly if you are even a day late with a payment.

And banks charge absurd fees on services that cost them next to nothing. Withdraw, say, $100 from an ATM and in most places you'll pay $1.50 to $2.50 – in some high traffic areas $3 – for the privilege of getting your own money. The costs of those machines and their simple operating systems were covered within months, if not a few weeks, of their installation. Servicing costs are next to nothing in comparison with what they take in.

Now my personal story:

I missed making the March payment on a Wells Fargo credit card. I accept responsibility for that.

My simple system for handling most bills involves writing the due dates on the outside of the envelopes in which they arrive, and placing them in a basket on my desk in the order they must be paid. With perhaps three exceptions in my entire adult life – the others because of disputes over the charges – my bills always have been paid on time.

But somehow I missed the March bill on that credit card. My first thought was that the bill never arrived, but given that Wells Fargo, like all other major institutions, is infallible in all things, I gave up on that idea. More likely, I mistakenly shredded the bill along with some of the numerous credit card offers my wife and I receive every month. (How I'd like to bill those banks for all the time I spend doing that, not to mention to cost of the quality shredder I bought when two cheaper ones gave out, one after the other.)

OK. My bad.

But I didn't realize I hadn't paid the bill. Ideally, one should post a list of regular bills and their normal due dates, and check the list regularly, so that one is aware of the fact if a bill should not show up at an appropriate time.

Know anyone who does that?

I became aware of the error when I received a nasty and threatening letter from Wells Fargo. The bill, at that point, was about 24 days over due. The letter was sent when the bill was just 20 or 21 days over due.

Our home mortgage is held by Wells Fargo, purchased by that bank from another company some years ago. Mortgage payments are up to date and always have been.

We have had that credit card for a couple of years now, and payments before the one in March, were made on time.

The bill was less than a month overdue. And here is a letter from the bank, over the signature of Larry Tewell, senior vice president for card services, ordering me to “send the past due amount immediately to avoid further collection action on your account.”

I mailed a check for notably more than the required amount the day that I received the letter. (It has since been cashed by Wells Fargo.)

Ah, but that was just the first shot from the bank.

Two days after the arrival of the letter, I got a telephone call from an exceedingly rude, harsh-voiced woman who demanded I make payment right then, over the phone. I told her I'd sent a check two days earlier, but that was not satisfactory, she said. “You must make a payment right now, during this telephone call.”

Again, I started to tell her that a check had been mailed two days earlier, but she continued to talk over me, demanding immediate payment again and again. In fact, she raised her voice and talked over me, constantly. At one point I said: “Ma'am, please stop talking for a minute and listen to me,” (Note, I did not say, “Shut up,” as I wanted to do.) But she continued to say the same things repeatedly, at a level barely below a shout, refusing to allow me to say anything. Obviously it was what she had been trained to do.

After several minutes of abuse, I hung up.

The woman on the telephone said several times that the bank would inform credit reporting agencies of our delinquency, and would damage our credit rating. I have no doubt it will do that.

I have not yet decided how I will deal with that, but my anger is such I'm willing to expend both time and money to protect our credit rating and, if I can, put some hurt on the bank. Various regulators, members of Congress and state legislators will see or hear my story. I am fortunate in where I live; at least two of the politicians are of that rare type who actually care about the welfare of their constituents.

Yes, failure to make payment was ultimately my responsibility. I would not fight a reasonable financial penalty for that mistake. But the penalty won't be reasonable, and damage to my credit standing could do me serious harm.

In a sense, I am shocked that a bank, even one of the giants such as Wells Fargo, will so abuse a long-time customer with a solid history of credit worthiness.

But I am not really surprised. Wells Fargo is one of the big outfits, impersonal and utterly contemptuous of everyone who is not them, with a history in recent years of doing terrible things to people for the sake of profit. Just like all the other big banks. Officers who were in charge when the worst things happened make more millions now than they did in 2007.

Words such as “service” are simply advertising words, without real meaning. The standards that people of my generation accepted as the norm – providing service and and returning value for money, courteous treatment of customers, especially long-time customers, and, in fact, common decency – no longer apply. Given that there is virtually no competition, and that governments at all levels now exist primarily to serve money and power, the individual has no effective way to resist, and exists only to be milked.

This is Corporate America, Tea Party America.