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Open Thread - Landmark Ruling Last Week that YOU may not have heard about and then some...

  • Posted on: 18 August 2010
  • By: Connecticut Man1

Zach Carter takes note of recent ruling in a case that shows pretty clearly how the banks, not just Wells Fargo BUT all banks, purposely rigged their overdraft system against you:

Wells Fargo Overdraft Scam Makes Elizabeth Warren More Important Than Ever

A landmark court ruling on Wells Fargo's outrageous overdraft scam has the potential to return hundreds of millions of dollars in stolen funds to consumers all over the country. But like many of the banking scandals from the past decade, there's more to the story than simple bank predation. When banks devised this new program to swindle their own customers, bank regulators did not merely look the other way, they actively encouraged the behavior by writing a new rule approving a practice that courts now believe to be unfair and deceptive. The Wells Fargo case should be viewed as a clear example of why Elizabeth Warren ought to head the new Consumer Financial Protection Bureau.

The overdraft scam that Judge William Alsup slapped down yesterday is not unique to Wells Fargo-- every big bank in the country has been doing it for years, and if it's never happened to you, it's probably happened to your friends or family. Banks make a lot of money from overdraft fees-- $38 billion last year, compared to a combined industry profit of just $12.5 billion. They don't make that money by accident. Internal company emails and memos from the Wells Fargo case show bankers spending a lot of time figuring out how to maximize the number of overdraft charges they can hit their checking customers with.

One way is by changing the order in which your transactions are processed. Most people think that their checks and debit card purchases are processed in the order that they make them. But that's not how banks actually do it. Instead, they wait for you to make several purchases, and then process the most expensive purchases first. This method pushes a customer's balance to zero faster than the honest way that actually reflects buying habits. And the sooner your balance goes to zero, the more overdraft fees the bank can hit you with.

It is institutional fraud, across the board and directed at the average consumer, that had elevated the issue of the new consumer protection agency to a grassroots level to begin with.

And it is not just the bank customers that are institutionally screwed over by the financial system. Again from Mr. Carter, even the small players on Wall Street are habitutally hammered to the benefit of the American elite that continues to escape punishment for their crimes:

Sections: 

From "Too Big To Fail" To "Too Good To Stop"

  • Posted on: 21 January 2010
  • By: Connecticut Man1

From StevenD at Booman Tribune we get this interesting observation:

What part of my citation from this story is dripping with irony? Take your time, but it should be easy to spot without too much hard work.

The president will announce a series of measures to cut down on excessive risk-taking as part of a revamp of the country's financial regulatory system, a senior Obama official said on Wednesday.

The move could also help the White House tap into public rage over Wall Street excess after Obama's Democratic Party was rebuffed by voters in Massachusetts, who elected Republican Scott Brown to the U.S. senate.

"The proposal will include size and complexity limits specifically on proprietary trading and the White House will work closely with the House and Senate to work this into legislation," the official said.

Did you see it? I'm sure you did, but being the incurable know-it-all that I am, let me point it out for you anyway:

"[T]he White House will work closely with the House and Senate to work this into legislation."

I hope this doesn't mean that they will go about this the same way they "worked closely with the House and Senate" to get a workable health care reform bill passed. Because if that's the case all I can see is another looming failure where certain Senators and Blue Dog Democrats hijack the process and turn the financial reforms the administration proposes into the same bowl of thin gruel that health care reform ended up as, thanks to people like Bart Stupak, Joe Lieberman, Olympia Snowe and Ben Nelson.

In what is completely and totally unrelated news that will never, NEVER EVER, have any impact on the information StevenD is talking about:

Political Power of Just 6 Banks is the Problem

  • Posted on: 28 January 2009
  • By: Tony Wikrent

Last week ago, Institutional Risk Analytics interviewed Josh Rosner of Graham Fisher & Co and David Kotok of Cumberland Advisors, and the discussion is one of the most direct and revealing of the true political nature of the financial collapse I have yet seen.