Bank Bailouts and Fee Hikes


(Reuters) – U.S. banks that received money under the Troubled Asset Relief Program (TARP) are facing a probe over increases in rates and fees, the Wall Street Journal said. The Congressional Oversight Panel, the body named by Congress to oversee the federal bailout, is working on a report examining instances of potentially inappropriate lending by banks that got taxpayer capital, according to the paper.

“The people who are subsidizing the activities of the banks through their tax dollars are the same people who are furnishing the high profits through consumer lending,” Elizabeth Warren, chairwoman of the Congressional Oversight Panel told the Journal in an interview.

“In a sense, we’re asking taxpayers to pay twice,” Warren told the paper.

The U.S. Treasury Department’s $700 billion TARP was intended to provide lenders with more capital to spur lending and improve the economy.

Here is the link to the Congressional Oversight Panel.  Without reviewing documentation and conducting a critical review of this website, it will be difficult to clearly assess what actions are being taken with respect to TARP.  Even a critical of the site will not be sufficient, but it is a place to start.

Here is the complete list of Hearings & Testimony.

Here is the latest press release (April 7, 2009).


  1. This shouldn’t come as a surprise, seeing as most banks’ growth in profits the past few years was due to increased fees. The TARP money doesn’t really mean a thing to the banks. When Congress and Clinton loosened the strings on banks in the late 90’s, you knew there would be trouble. All of a sudden, they became “financial institutions”. When Bush got in office, and decided that financial institutions could police themselves, well, you see where we are now. Many of the mechanisms that kept banks under control were put there for a reason. The greed in the late 20’s and 30’s lead to a collapse of the financial system then, which lead to the creation of sensible things like, a bank could not hand out mortgages or provide insurance.

    Because Bush and his cronies got what they wanted, now because banks are broke, they are hitting folks with fees more than ever. People can get their payments in early, and the bank conveniently loses it, or it’s a small payment, so it gets pushed to the back of the queue and isn’t cashed ’til later. The customer gets screwed with an ever-increasing late fee that’s now $40+ in some cases. They also might incur an over-draft fee, etc. Now, more banks are raising the minimum you must have in your own account at all times. Otherwise, you incur a maintenance fee! How much maintenance does it take to look after a small amount of money?

    Credit card companies are taking the opportunity to turn up their fees and financially rape their customers before new legislation takes place. Cutting good customers who they can’t get fees off of. Making interest rates jump higher when people miss payments.

    Most financial institutions aren’t even doing anything meaningful with TARP money. This is the hypocrisy in giving it to them in the first place. A friend and I argued about the difference between the financial industry bail-out and one for the automobile industry. Her argument was Obama knows what he was doing, etc… I argued that the government (augmented by the press) put way more pressure on the Big 3 than they ever did the banks. Think those bank CEO’s flew in to the hearings on Southwest? The government never put restrictions on banks on how to use the money when they gave them money. They were given carte blanche to do what it took to get themselves back to profitability. Detroit’s people might as well be in Ozwald Correctional Facility getting shanked! I’ll be the first to admit that the Big 3 have essentially killed themselves, but so did the banks, in a much shorter time than it took the Big 3.

    Sorry T3, you know my mind tends to go off in tangents! Too much pent up anger living in a cell (cubicle)!

  2. The Empire surely shot itself in the foot by not letting the banks go belly up–or putting in strong measures to ensure that the banks would in fact stimulate lending. Letting the automotive sector go belly up would hamper the empire’s ability to ramp up manufacturing weaponry like tanks, jeeps, and humvees, etc., if necessity demanded it. At least the auto industry, unlike banks, actually produce a “durable” good that is a measurable economic indicator.

    People were somewhat miffed that Barack started laughing during the 60 Minutes interview right when he started talking about America’s greater disdain for bailing out the auto industry as opposed to the banking industry. Sure the auto industry shot itself in the foot by nepotism, stubbornly antiquated engineering practices as well as the continued production of Large sports utes and trucks that proved to be great liabilities during this latest gas shock. However, the auto industry doesn’t do too bad when you consider that they compete against foreign companies that are backed/subsidized by their home governments.

    The banks are making Barack’s effort look terrible.

  3. My credit card limits were soon cut down. my balance transfer offers soon disappeared. And my interest rates that weren’t locked in soon increased.

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