Sunday, August 02, 2009
Banks trying to gouge good customers to make up for new restrictions passed by Congress has infuriated not only those on the left but even conservatives like Carl Horowitz, director of the National Legal and Policy Center’s Organized Labor Accountability Project. Horowitz provides a litany of testimonies from individuals who have been subjected to the “gotcha capitalism” being employed by financial institutions like Bank of America, Chase and others.
“Banks and other financial institutions in recent years have raised existing fees to dramatic heights, imposed a broad range of new fees, doubled and even tripled interest rates on credit cards without prior warning and otherwise put the squeeze on unsuspecting customers,” Horowitz writes. He notes that banks are expected to collect $20.5 billion this year in penalty fees and another $38.5 billion thanks to overdrafts. Banks use numerous fine-print tricks to maximize their profits, including retroactive interest rate hikes and sudden reductions in credit ceilings tha t raise your credit utilization ration and thus trigger higher interest rates.
No one will ever mistake Horowitz for a socialist. But even a diehard capitalist can see how the arrogance of banks is threatening to take its toll on customers. “When trust breaks down, offending firms and industries must rebuild their reputation to remain competitive,” he argues. “The banking industry, to make a long story short, has a credibility problem right now.”
-Noel Brinkerhoff
Banks Go "Gotcha!" (by Carl Horowitz, Townhall)
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