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Molon Labe
04-02-2009, 04:10 PM
By Don Cooper
Don Cooper is a Florida native, Navy veteran and Oxford educated economist living and working in the Midwest.



I have been a customer of Bank of America since October 2006. In that time I have maintained, in good faith, a checking account, a savings account, an investment account and two credit card accounts.

This letter is to inform you that I am displeased with the service I've received from BOA and will no longer be doing business with you.

It has become evident to me that in light of BOA's irresponsible and abusive overdraft and credit card policies and their associated fees which are in direct opposition to your customer's wishes and in light of your dishonesty regarding your concern for your customers' welfare and in light of the moral hazard that you've accepted in receiving constitutionally illegal appropriations from the federal government to the tune of some $150 billion and in light of your breach of our good faith contract to provide me the understood banking services in a reasonable and professional manner, I find BOA to be a disreputable organization and have chosen to no longer do business with you.

As of today, I have an outstanding negative balance in my checking account of $440 as well as two outstanding balances on my credit cards totaling approximately $7,800.

I consider my debt to BOA to be paid in full by BOA for the following reason: from information I could find on the Internet BOA has a U.S. consumer base of some $29 million. I calculated my share of the bailout funds allocated to BOA then to be approximately $5200.

This is money I've already given to BOA from my federal tax allowances. Now this is just a loan understand. BOA is responsible for paying this money back in full and with interest, to me. Since the federal government made this loan without the constitutional authority to do so and with my money I would like to inform BOA of my terms of agreement which are in addition to whatever TOA you might already have with the feds.

The loan origination fee is $440.

I will start you out with an introductory rate of 10% APR. I reserve the right, however, to change this rate at any time and without notification. Like right now. It just went up to 15%. See how that works? Now as you make repayments.......

http://www.marketoracle.co.uk/Article9824.html

linda22003
04-02-2009, 04:16 PM
Yeah, that'll work. ;)

ReaganForRus
04-02-2009, 04:22 PM
I'm surprised the author hasn't sent the letter back to Nigeria.:D

FlaGator
04-02-2009, 04:24 PM
By Don Cooper
Don Cooper is a Florida native, Navy veteran and Oxford educated economist living and working in the Midwest.

Don Cooper is apparently an idiot too!

"BOA's irresponsible and abusive overdraft and credit card policies " where designed for people just like you Mr. Cooper. People who can't manage to keep enough money in their checking accounts to cover all the checks they write and people who can't manage to get a credit card payment sent in on time even when there is a grace period. If you haven't written a lot of bad checks then you can call customer service and get the overdraft fee wavied. I suspect this wasn't an option any longer for Mr. Cooper and he was put on an irresponsible customer list.

hazlnut
04-02-2009, 04:30 PM
Don Cooper is apparently an idiot too!

"BOA's irresponsible and abusive overdraft and credit card policies " where designed for people just like you Mr. Cooper. People who can't manage to keep enough money in their checking accounts to cover all the checks they write and people who can't manage to get a credit card payment sent in on time even when there is a grace period. If you haven't written a lot of bad checks then you can call customer service and get the overdraft fee wavied. I suspect this wasn't an option any longer for Mr. Cooper and he was put on an irresponsible customer list.

Where do you get that he bounced checks?

I've been wanting to call Citibank and ask to have my CC rate adjusted to the same rate they're getting from the Government.

FlaGator
04-02-2009, 04:35 PM
Where do you get that he bounced checks?

I've been wanting to call Citibank and ask to have my CC rate adjusted to the same rate they're getting from the Government.

He's got a negative balance on his checking account and he's complaining about overdraft fees. I know for a fact that if he only had one or two bounced checks over the course of a year or two they would waive the fees if he called and asked. I suspect that what we see here is that they wouldn't waive the fees because he has a history of overdrafts. Also the bitching about his credit cards allows me to infer that he's been late on a payment and they've jacked is interest rate to 33 percent which he agreed to before he was issued the card.

hazlnut
04-02-2009, 04:44 PM
Also the bitching about his credit cards allows me to infer that he's been late on a payment and they've jacked is interest rate to 33 percent which he agreed to before he was issued the card.

And raising the rate is going to help him pay down the balance how?

Molon Labe
04-02-2009, 04:57 PM
There are some great points about his negative balance etc. but this credit problem and bailouts get's way too much blame on the individual debtor. He like all of us are footing the bill for bad business practices.
If you give people easy credit, then they will naturally take it. I'm pretty much good on my debts...it wasn't always that way......but most people are up to their eyeballs not just because they were stupid but because this type of behaviro is promoted by the policies in lending. It's because of intervention in the markets that gets way too little credit. (No pun intended) such as....

What about the Federal government making laws forcing banks to engage in liberal lending practices. Lending money to people who shouldn't get it. Community Reinvestment Act.....Fannie Mae etc? What about how the government uses techniques that allow artificial speculation in the markets.

To me the banking industry and government collusion is AS irresponsible as the ignorant who buy up everything on credit cards.

hazlnut
04-02-2009, 05:11 PM
There are some great points about his negative balance etc. but this credit problem and bailouts get's way too much blame on the individual debtor. He like all of us are footing the bill for bad business practices.
If you give people easy credit, then they will naturally take it. I'm pretty much good on my debts...it wasn't always that way......but most people are up to their eyeballs not just because they were stupid but because this type of behaviro is promoted by the policies in lending. It's because of intervention in the markets that gets way too little credit. (No pun intended) such as....

What about the Federal government making laws forcing banks to engage in liberal lending practices. Lending money to people who shouldn't get it. Community Reinvestment Act.....Fannie Mae etc? What about how the government uses techniques that allow artificial speculation in the markets.

To me the banking industry and government collusion is AS irresponsible as the ignorant who buy up everything on credit cards.

Also, when people find their income abruptly and drastically changed as a result of unemployment--things can stack up pretty fast.

Are BofA and Citibank raising interest rates and lowering limits as way to encourage people to be more responsible with their plastic? What happens when minimum payment doesn't cover monthly interest?

Time to sell the Seadoos.

My understanding is that credit card debt was part of AIG's CDSs--along with the subprimes.

FlaGator
04-02-2009, 05:51 PM
And raising the rate is going to help him pay down the balance how?

Its not about him paying his balance down. It is about teaching someone the consequences of lack of responsibility. In short you own your own problems. He knew the consequences but apparently he didn't respect them enough to make sure he got a payment in on time or to makre sure that there was enough money in his account to cover things.

hazlnut
04-02-2009, 06:04 PM
Its not about him paying his balance down. It is about teaching someone the consequences of lack of responsibility. In short you own your own problems. He knew the consequences but apparently he didn't respect them enough to make sure he got a payment in on time or to makre sure that there was enough money in his account to cover things.

If a bank customer defaults on the CC debt then who wins? I understand lowering limits, but I question raising rates during a recession?

How do we teach the banks the consequences of their actions? (just throwing it out there as a thought)

Molon Labe
04-02-2009, 06:24 PM
Its not about him paying his balance down. It is about teaching someone the consequences of lack of responsibility. In short you own your own problems. He knew the consequences but apparently he didn't respect them enough to make sure he got a payment in on time or to makre sure that there was enough money in his account to cover things.

Your absolutely right about the personal responsibility. People are stupid. I don't agree with how he handled his finances. I don't know his story. But we just don't acknowledge enough how liberal laws that make easy credit the norm have perpetuated this mess.

I'm less angry at the Don Cooper's of this world and much more concerned about businesses who entered into impurdent lending agreements with people who had no business doing so, because Uncle Sam made it either illegal to discriminate in lending or made it too easy to lend.

Let's face it, I think everyone has been tempted by easy credit. How many have ever been at a Best Buy or Circuit city "just browsing" on that surround sound system you've been dying for. You had no intent on actually buying one, but then the associate tells you you qualify for a gazillion in credit at the store. You only made about 17,000 this year, but what the heck..you can make the payments 12 months no interest. So you get a new LCD TV too.
I'm not convinced that the Don Cooper's are the reason that Circuit City or BOA are defunct. It's because CC dolled out too many 12 months no interest loans. They deserve to go belly up IMO

What is so difficult about lenders knowing the risk being able to say NO!

Molon Labe
04-02-2009, 06:25 PM
If a bank customer defaults on the CC debt then who wins? I understand lowering limits, but I question raising rates during a recession?

How do we teach the banks the consequences of their actions? (just throwing it out there as a thought)

You teach them by letting them go the way of the do do. Then prudent investors will buy up the real assets. And the economy will be on track much faster than prolonging the inevitable.
That' the cliff note version.

patriot45
04-02-2009, 06:31 PM
You teach them by letting them go the way of the do do. Then prudent investors will buy up the real assets. And the economy will be on track much faster than prolonging the inevitable.
That' the cliff note version.


That is the correct way of doing it. But you forgot the mantra of - A Crisis! You can't let it go to waste!
Doing the right thing might be painful, can't have that. The funniest part is now they are going to start forcing bancruptcies:confused: Rather then letting the market dictate who lives and dies.

Molon Labe
04-02-2009, 06:37 PM
That is the correct way of doing it. But you forgot the mantra of - A Crisis! You can't let it go to waste!
Doing the right thing might be painful, can't have that. The funniest part is now they are going to start forcing bancruptcies:confused: Rather then letting the market dictate who lives and dies.

Exactly! A Crisis! Must save the people!

Problem is that now the suffering continues twice as long (maybe longer). There's going to be suffering in a free market. Been there done that.
It just makes sense that if the risks of dying as a free market business are there, then the prudent will be much more plentiful in the market. The way we have it now is that the risk takers who run the show. Which is why my housing lot has 3 unfinished plots on it, that probably won't be bought for another 5 years or more.

FlaGator
04-02-2009, 09:29 PM
If a bank customer defaults on the CC debt then who wins? I understand lowering limits, but I question raising rates during a recession?

How do we teach the banks the consequences of their actions? (just throwing it out there as a thought)

So the banks should just let them slide with no punitive response? What actions do you speak of? By the way I am a former Vice President in T&O of a rather large bank. I am curious as to what actions do you think they did that deserved consequences.

hazlnut
04-02-2009, 11:19 PM
So the banks should just let them slide with no punitive response? What actions do you speak of? By the way I am a former Vice President in T&O of a rather large bank. I am curious as to what actions do you think they did that deserved consequences.

Re: The Customer, the bank has the right to expect timely repayment of debt. Late fees are appropriate, but raising rates--making the entire debt go up-- my question was who wins if the customer doesn't pay.

Does the bank have an interest in doing something that although profitable in the short run, ends in more loss when accounts are sent to collection.

Re: Bank Consequences. Is it your view that the major banks taking bail-out funds are without fault?--meaning they conducted business in a prudent manner and were not in any way responsible for the situation that led the need for government involvement?

FlaGator
04-03-2009, 09:39 AM
Re: The Customer, the bank has the right to expect timely repayment of debt. Late fees are appropriate, but raising rates--making the entire debt go up-- my question was who wins if the customer doesn't pay.

Does the bank have an interest in doing something that although profitable in the short run, ends in more loss when accounts are sent to collection.

Re: Bank Consequences. Is it your view that the major banks taking bail-out funds are without fault?--meaning they conducted business in a prudent manner and were not in any way responsible for the situation that led the need for government involvement?

Did you know that a lot of banks didn't want the money and were forced by the feds to take it in order to keep quiet the banks that were really in trouble vs. the banks that were doing ok? Also, here is the deal with Bank of America as I understand it. Originally BofA turned down the first round of bailout money but the feds insisted for the reasons above. Then as BofA was doing the purchase of Merrill Lynch the auditors realized that ML was in worse shape than BofA was lead to believe. Hey wanted to back out of the deal but the feds held their feet to the fire saying what a disaster to the economy it would be if ML failed so the Feds promised to help out with more bailout money if BofA found out they were in over their heads. BofA got the money but still had to cut something like 35,000 jobs in a few months. Those cuts are still taking place because no matter how big a company is, the lost of 35,000 jobs in that short period of to hurts and is hard to adjust to. I may be wrong on some of the specifics here, but to the best of my knowledge this is how things went.

linda22003
04-03-2009, 10:21 AM
FlaGator is right. A lot of banks didn't want the bailout money, but Paulson basically tied their CEOs to chairs and beat them about the head and shoulders with a beer bottle until they took it.


How Paulson forced bail-out on the banks (http://www.guardian.co.uk/business/blog/2008/oct/15/banking)

hazlnut
04-03-2009, 01:52 PM
All great info and links, thanks. Very complicated when you start peeling back the layers.