H.R. 627 Credit CARD Act Legislation to Protect Consumers Begins to Go Into Effect in 3 Phases: August 20, 2009, then February 22, 2010 with Final implementation on August 22, 2010
President Obama signed into law on May 22, 2009, the “Credit CARD Act also called the “Credit Cardholders’ Bill of Rights.”
The timing of Citicard now starting in April unloading its low-interest credit card holders before the legislation fully kicks in on August 22, 2010 to protect consumers is just a coincidence right? Mmmm…
Photo derived from Fat Cat by danperry.com on Flickr creative commons
The new legislation fully goes into effect on August 22, 2010 to protect credit card holders, and Citicard starts investigating card holders in February 2010 and unloading credit card holders in April who pay on time more-than-the-minimum-balance but coincidently also have low locked in interest rates under 8%. Foul Foul Foul Citicards!
Is there a smoking gun memo somewhere that had parameters of who to target to get off their books so everyone would now have higher interest rates at Citi? For example, a NYT article by Louise Story on 4/18/2010 shows us that Goldman Sachs was getting directives from on high about their little double dealing bets against their own clients with their mortgage backed securities CDOs by using Credit Default Swaps.
Could it also be that there was a directive from the upper echelons of Citigroup to remove low interest credit card holders in Citigroup’s Citicard division? Better find those hot emails before they bite the dust in cyberspace.
On April 19, 2010, the New York Times online showed that CEO of Citigroup, Vikram S. Pandit, is thrilled that Citigroup has made a $4.4 Billion profit in the first quarter of 2010.
Wow, Mr. Pandit and his team of Wall Street Wizards must be happy, especially since a lot of that ability to stay afloat was thanks to the little taxpayers who footed the bill. You would think Citigroup would appreciate the little guys given that Citigroup was swimming in kitty litter stench from their wild ride with the mortgage backed securities scandal not only in the U.S., but also in foreign markets.
“Beginning in the fourth quarter of 2007, certain of Citigroup’s regulators and other state and federal government agencies commenced formal and informal investigations and inquiries, and issued subpoenas and requested information, concerning Citigroup’s subprime mortgage-related conduct and business activities,” the bank said in its annual report. “Citigroup is involved in discussions with certain of its regulators to resolve certain of these matters.” (from NYT DealBook Blog: Citi Distances Itself from Goldman’s Troubles)
Meaow, wasn’t that just a few months ago?
According to a New York Times Blog on Investments Article, “Citigroup Stands Alone”:
In addition to providing Citigroup with $45 billion in TARP money, the federal government has also agreed to back roughly $300 billion in soured assets that remain on Citi’s books.
Bikram Pandit appeals to American taxpayers on their use of TARP funds and acknowledges the economic challenges average Americans face:
Opening Statements by Citigroup CEO Vikram Pandit to Congress
So now they are possibly targeting their little pesky clients with low credit card interest rates. You know, it could possibly affect Citi’s bottom line having people with such low interest rates.
Hello Senate Banking Committee, maybe Mr. Pandit together with President and CEO of Citicards, Kendall E. Stork, need a return trip to a hearing for a little tete-a-tete about how Citi might be finding ways to get around the new consumer Credit CARD Act protection legislation. And Mr. Geithner, remember the average person in the U.S., what are you doing to protect them from unfair credit card company practices and the big rush to jack up interest rates or get rid of people who have low locked-in interest rates?
Considering Citigroup gave itself “lavish bonuses during bailouts” on the backs of taxpayers, as an article at the New York Times reports, it is really disturbing that they are now targeting people who already were good customers with locked-in low interest rates.
The NYT article regarding “lavish bonuses” to bailout companies like Citi reported:
The report does not include certain other highly paid employees, like brokers who are paid on commission. The report also does not include some bank subsidiaries, like the Phibro commodities trading unit at Citigroup, where one trader stands to collect $100 million for his work last year.
Free enterprise does not mean the Wild Wild West of Greedy Little Wall Street Wizards, Sharks and Piranahs can do whatever they want without regulations solely for the-profit-of-it-all.
Photo derived from Shark! by happosal Flickr creative commons.
Time for Citigroup to stop hurting its innocent customers. And, also Congress it’s time to pass a meaningful Consumer Protection Bill that will regulate the Greedy Little Wall Street Wizards. It is clear self-regulation will never happen on Wall Street. Also, Americans are disgusted that the bankers abused the bailout money by giving themselves obscene bonuses. The hubris of it all.
Readers, if you want to find out if Citigroup is unfairly targeting its clients, encourage the Senate Banking Committee and House Financial Services Committee to launch investigations on Citigroup and Citicards. These institutions should not be able target low interest cardholders unfairly before August 22, 2010 or after.
The Huffington Post also did a recent story about other Credit Card Companies unfairly raising rates on its consumers. See this article by Arthur Delaney. Delaney reports about Citi:
Craig Gibson of Tyler, Texas wrote that rates went up on cards he holds with American Express, Chase, and Citi. He chose to “opt-out” rather than continue his Citi card at the higher rate, but he isn’t too happy to have been forced to choose.
“The catch is that, if you accept the new rate, you are getting screwed for nothing!” Gibson wrote. “And, if you opt-out, like I did, then when you close the account, you get screwed on your credit report! For nothing!”
Were there special deals struck with certain U.S. federal agencies to allow Citi to discard its low-interest credit-card holders before August 22, 2010?
According to this co-authored article by ProPublica & Politico, it appears that Citigroup is heavily monitored by several government agencies.
- Uh-oh, did Citi got the green light to unload low interest cardholders from the government! Let’s hope this possible scenario is not so because it would be a low blow to consumers that Congress is supposedly trying to protect.
“Though the Federal Reserve is the primary regulator of Citigroup, the bank holding company, other regulators have jurisdiction over pieces of the firm and work closely together: the Comptroller of the Currency supervises Citibank; the FDIC insures Citibank’s deposits; and the Securities and Exchange Commission oversees investment banks, like Smith Barney. As part of the bailout, Citigroup indicated it had previously entered into regulatory agreements with bank supervisors but did not disclose details.” (ProPublica & Politico Article)
Tell Congress and the President to close the big loopholes in the current Credit CARD Act that allows credit card companies to target low-interest holding credit card clients.
U.S. Senate Committee on Banking, Housing, and Urban Affairs:
534 Dirksen Senate Office Building, Washington, D.C. 20510,
P: (202) 224-7391, F: (202) 224-5137
U.S. House Financial Services Committee:
2129 Rayburn House Office Building
Phone: (202) 22504247
President Obama, The White House Comment Line:
Phone: (202) 456-1111