Masters of the Universe category archive

The game of Fee Card Monte continues:

Nearly two years after the Federal Reserve began requiring banks to get customers’ permission before subjecting them to controversial overdraft practices, many account-holders are still surprised when they are charged overdraft fees for debit-card purchases or ATM withdrawals that could simply have been declined, says a new study financed by the Pew Charitable Trusts.

The Pew study found that more than half of those hit with overdraft fees did not believe they had opted in to the policies, which enable banks to approve purchases or withdrawals for customers short of funds and then charge them fees for the transactions. Pew says the median bank overdraft fee is about $35.

One is tempted to say, “Read those statements banks send you about ‘changes to the agreement’ carefully,” but, really, that’s pointless advice.

If you have a magnifying glass strong enough to make that four-point type legible, you find quickly that the prose is a multi-syllabic word salad that even Sarah Palin would step back to admire. Follow the link for a description of some of the semantic games banks play.

Here’s the two magic words for avoiding this.

Pay cash.

I don’t mean pay cash for everything; that’s an absurdist fantasy attractive only to those who fancy themselves “Libertarians.”*

I mean pay cash for that cup of coffee. Pay cash for those three bags of chips from the dollar store. Pay cash for anything under twenty dollars.

Will paying cash automatically keep your pocket from being picked?

No. It will make keeping track of your checkbook a lot easier. Then you can keep yourself from overdrawing your account.

_________________________

*Libertarian: A Republican who’s ashamed to admit it.

Bloomberg:

One of the more confounding aspects of the U.S. housing crisis has been the reluctance of lenders to do more to assist troubled borrowers. After all, when homes go into foreclosure, banks lose money.

Now it turns out some lenders haven’t merely been unhelpful; their actions have pushed some borrowers over the foreclosure cliff. Lenders have been imposing exorbitant insurance policies on homeowners whose regular coverage lapses or is deemed insufficient. The policies, standard homeowner’s insurance or extra coverage for wind damage, say, for Florida residents, typically cost five to 10 times what owners were previously paying, tipping many into foreclosure.

When I bought my truck, my lender tried to pull a stunt like this with my car insurance. Only I had insurance already–I had to show proof of insurance to drive the thing off the lot.

Their policy’s premiumn was four times mine.

It took me three months to get them to stop trying to swindle me. The car salesman, who was a neighbor of mine, later told me that he had heard that this was not an uncommon problem with them.

And they were not some finance company.

They were an old local bank.

At MarketWatch, Al Lewis (no, not that Al Lewis) takes a scathing look at those who give up their US citizenship so they don’t have to pay taxes. A nugget:

You and about 1,780 other expatriates did this last year, according to Andy Sundberg, secretary of Geneva’s Overseas American Academy, as quoted in a report this week by Bloomberg. That’s up from 235 in 2008, when the U.S. launched a major crackdown on UBS for helping ingrates like you illegally dodge their taxes.

Caught between your money and your country, you chose your money. You sold your American soul.

Read the rest.

The FDIC is still managing to find some nuggets to munch on.

Security Bank, National Association, North Lauderdale, Florida

If Goldman Sachs is a vampire squid, this at least qualifies as an Octopus.

Via Bob Cesca.

The fruits of your labor.

More at TPM.

Banks aren’t sure this is a good idea.

Richard Cordray wants lenders to adhere to the most basic tenet of banking: making sure borrowers can repay. Getting them to agree on how is proving tougher.

The director of the Consumer Financial Protection Bureau is aiming to discourage lenders from making home loans with risky features and outlining steps they must take to verify borrowers’ finances, as part of the “qualified mortgage” or QM regulation. Banks that follow the guidelines will gain legal protection against borrower defaults.

“Here’s what should be the least surprising lending advice you’ve ever heard: If you are going to lend money, you should probably care about getting paid back,” Raj Date, the agency’s deputy director, said in a speech April 20 in Los Angeles.

Could it be that they fear it might impede the pace of foreclosures mortgage sales commissions? Read the rest to find out.

Steven D. reports on the 21st century version.

Why the effrontery of these people! How dare they take the initiative!

The initiative looks to undo a portion of Colorado law that allows lawyers to attest their client banks have the foreclosure rights on mortgages without having to provide proof. The initiative would require lenders to show proof — essentially the chain of assignments and transfers mortgages undergo when they’re bought and sold on the secondary investment market — before they can take property through foreclosure.

The banks, natch, are against this. They want to be able to foreclose just on their say-so.

We know how well that has worked out.

As designed by Dillinger and Assocs, Compensation Consultants:

Chief executives’ total compensation at Georgia’s 13 largest companies rose almost 29 percent over the past five years — more than double the growth of shareholders’ returns at those companies. By comparison, a shareholder would have reaped a 12.9 percent return during the same five-year period, after investing equally in the 13 companies, including re-invested dividends.

Likewise, CEO pay at the companies on the Fortune 500 list rose four times faster than the firms’ combined profits, which squeaked up barely 7 percent in five years.

More masters of the universe are out of their jobs–so routine I don’t even check for the list on Friday evening any more:

HarVest Bank of Maryland, Gaithersburg, Maryland

Inter Savings Bank, fsb D/B/A Interbank, fsb, Maple Grove, Minnesota

Plantation Federal Bank, Pawleys Island, South Carolina

Palm Desert National Bank, Palm Desert, California

The first two on the list deserved punishment for crimes against spelling, regardless of their fiduciary behaviour.

In related news, some of our local masters of the universe are facing time. I suspect that they are not so special as to be the only ones deserving of that privilege.

The FDIC is still finding the occasional bank to blank.

Fort Lee Federal Savings Bank, FSB, Fort Lee, New Jersey

Meanwhile, in my local rag, more news of responsible fiscals:

The owners of the Wainwright building and the old James Madison Hotel conspired with three former Bank of the Commonwealth officials to fleece the bank out of $41 million, contributing to its collapse, federal prosecutors allege.

This should work out nicely.

From Bloomberg:

Dutch bankers and insurers will have to pledge an oath to put their clients’ interests first in a government bid to improve confidence in the financial sector.

A segment of the population with a well-established reputation for trustworthi–oh, never mind.

Yesterday’s bank failure:

Fidelity Bank, Dearborn, Michigan

The trickle of failure is the actual trickle of trickle-down trickery.

Warning: Mild Language.

Aside:

Being rich seems to be its own “Get Out of Jail Free” card.

Of course, it makes sense if you believe that wealth is a sure sign of virture.

Soon to be replaced by the eviction-based economy:

Bank of America Corp.’s mortgage-to-lease program may be an attractive deal for many homeowners facing foreclosure, and it will certainly help the bank recover money lost to bad loans.

But as a deal, this one is tilted to the banks.

That’s certainly the takeaway from the bank’s announcement Friday that it would offer borrowers a chance to turn over their homes to B. of A. in exchange for a deal where the bank would rent those properties to the former borrower. The rents naturally would be less than the previous mortgage payment. Read Wall Street Journal story on the program.

With the alternative of eviction, some troubled borrowers may find such a deal the best option in a bad situation.

The FDIC has stirred to life again and begun to dine, leaving scraps of banks in its wake. Among the orts:

Premier Bank, Wilmette, Illinois

Covenant Bank & Trust, Rock Spring, Georgia