From Alternet: http://www.alternet.org/corporate-accountability-and-workplace/are-big-banks-bunch-organized-criminal-conspiracies
The record of deceit and deception that has surfaced in just the past two months points to yes.
By Les Leopold
February 27, 2013
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn’t we seize their assets, just like we do to drug cartels?
Let’s examine their sorry record of deceit and deception that has surfaced in just the past two months:
Loan Sharking
You want to get really, really pissed off? Then read ” Major Banks Aid in Payday Loans Banned by States” by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list.)
The big banks, however, don’t make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim’s bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.
Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.
For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percentof payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.
Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury. Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims’ accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.
Continue reading at: http://www.alternet.org/corporate-accountability-and-workplace/are-big-banks-bunch-organized-criminal-conspiracies
