Posted by MacRanger as Uncategorized
I’ve been getting a lot of emails from readers who – for arbitrary “business reasons” have had their credit card interest rates substantially increased from banks that received tax-payer bailout money.
Primarily Capital One. Back in December it was reported that Capital One received more than 3 billion in tax payer’s money in a bailout. But it came with a condition.
“So far, the one Richmond-based financial firm that’s getting help from the federal bailout is the one that says it doesn’t need it.
The bailout money — in the case of Capital One Financial Corp., $3.56 billion of taxpayer funds — is meant to encourage financial firms to lend more money.
But Capital One, with its main operations in Goochland County, expects to reduce car loans 45 percent this year. And barely two weeks after getting the bailout funds, it moved to snap up a healthy Maryland-based savings bank that would make Capital One the largest bank in the Washington area.”
So Capital One took over 3 billion of our tax dollars to bail them out of bad business decisions, ONLY IF they make it easier consumers to borrow money and thus stimulate the economy. So how is that “encouragement” working? Today yours truly received a notice from Capital One on a Business Platinum Visa. First let me ad that this account’s record is stellar, never a late payment and has been paid off three times.
“Due to extraordinary changes in the economic environment, we’re reviewing our existing credit card accounts. Having considered these economic conditions, your account’s current purchase rate, and the length of time you’ve had this rate and account, we will be increasing your Purchase Rate. We are also raising your Cash Advance and Default Rates.”
The rate increase? From 8.5 to 17.9. Given the option to decline the charges and close the account I opted to do so. Yet more important, Capital One – along with other takers of taxpayer bailout monies is violating the terms of their bailout, which is to make it easier – not harder – for consumers to borrow money.
Literally thousands of Americans are receiving such letters during a time – in the words of the media – during the hardest economic downturn since the Great Depression.
Capital One has every right to do business – within the law – as they see fit. However once they took taxpayer money that changed and accountability must be demanded by our elected officials and the government agencies that regulate Capital One and other banks.
The regulatory agency that handles Capital One is:
Office of the Comptroller of the Currency
Customer Assistant Group
1301 McKinney Street
Houston, Texas 77010.
Moreover, The Consumers Union was successful in achieving credit card reform, however it didn’t go far enough and gave too much time for the credit card companies to put into action. Therefore I’ll be contacting the Consumer’s Union to ask them to mount additional campaigns to bring CC companies into line with the agreements they made when they received taxpayer assistance.
While our Congress mulls yet another taxpayer funded bailout for banks and credit card companies it’s time for us to demand accountability of those who in fact owe us money.
Most of all I would strongly warn against doing business with Capital One, it’s the clearest message we can send that enough is enough.