banks
US Bails Out Citigroup
Federal regulators took extreme steps to prop up Citigroup, backing $306 billion of mainly real estate loans and securities and directly injecting money by buying $20 billion of preferred stock. The $20 billion of stock will pay an 8% dividend. Regulators will also get an additional $7 billion of preferred stock. Citigroup will basically halt dividend payments for 3 years and limit some executive pay. It will also implement the FDIC’s loan modification plan, which is close to the one it had already announced for itself.
Citibank Teaches Us How To Destroy A $244 Billion Banking Institution
Only two short years ago, Citibank was worth $244 billion. Now, after its stock lost half of its value in just the past week, the bank is estimated to be worth $20.5 billion. What happened? The New York Times attempted to answer that question Saturday, and it pointed the finger at the usual suspects — conflicts of interest between those who were supposed to manage risk — and those who stood to benefit from making risky bets.
Kiss Courtesy Overdraft Fees Goodbye With WaMu Debit-Only Card?
Whoever came up with the name “courtesy overdraft fee” is one smart cookie. They figured out a way to let you do something you don’t want to do, charge you a fee, and make it sound like they’re doing you a favor. WaMu is one of the few banks that let you…
Banks Want To Forgive Credit Card Debt — But The Government Says No
The next wave of the credit crisis — the skyrocketing defaults on credit cards — is coming in and odd alliances are being formed. The Consumer Federation of America, along with the Financial Services Roundtable ( a self-described “major player on Capitol Hill and with the regulators” which represents the securities, investment, insurance and banking industries) has requested a “special program that would allow as much as 40 percent of credit card debt to be forgiven for consumers who don’t qualify for existing repayment plans.”
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The government has officially announced that they will not be buying troubled mortgage assets — the original point of the so-called Trouble Asset Relief Program, and will instead be offering the bailout money to financial firms that are getting hit with a wave of defaults in credit cards and car loans. [CNNMoney]
So, Um, What Happened To That 2 Trillion Dollars In Bailout Money?
“Hey, guys? Where did that 2 trillion dollars go?” asks Bloomberg. The answer? We’d tell you, but it would be bad for you.
Watch Out For Illegal "MB Image World" Charges On Your Bank Account
Watch out for a charge on your checking account for a charge from “MB Image World.” People are complaining that the porn site, that they’ve never done business with or gave their account information to, is fraudulently issuing electronic check charges for $39.99. If they hit you, report the item to your bank as fraud and reverse the charges.
How To Avoid Record-High Bank Fees
Bank fees are increasingly disproportionate to the cost of business they’re supposed to cover, as shown inBankrate’s latest annual survey of consumer banking costs.
- Average NSF (non sufficient fund) fee: $28.95, a 2.5% increase from last year
- Average ATM surcharge is $1.97, up 1%
- The minimum balance required to avoid fees on interest checking accounts at a brick and mortar bank: $3,461.84, up 4%
- The average minimum required to open an online checking account: $650.81, up $517.48
Fees are designed to take advantage of your inattention. To avoid getting tripped up…
Chase To Fix 400,000 Option-ARM Mortgages
Chase will turn 400,000 high-interest option-ARM mortgages into lower-cost fixed ones, the bank announced this Friday. Foreclosure processes on the loans will be stopped for 90 days while the procedure gets set up. Banks mainly have latitude to adjust the mortgages they themselves own. The complexities of modifying a loan that may have been sold and repackaged into a security are intricate. For one, hedge funds have threatened to sue banks if they modify the loans underlying their bonds. So hooray for the lucky 400,000. Only a few more million to go. If you’re a homeowner facing foreclosure and you’re unable to get your lender to work with you, try contacting the HOPE NOW hotline at 1-888-995-HOPE for free advice from a home preservation counselor.
500,000+ Banking Passwords Stolen By Sinowal Trojan Horse, So Far
Security researchers uncovered over half a million bank account logins stolen via a sophisticated trojan horse known as Sinowal. The data goes back to 2006, an unusual longevity for a trojan horse. Not mentioned in the news reports: who’s to say this is the only cache? [NYT] (Photo: Darcy McCarty)
Treasury, FDIC Considering Plan To Guarantee Millions Of Mortgages
The Washington Post says that the Treasury Department and the FDIC are considering a plan to guarantee millions of mortgages. According to the WaPo, the plan under consideration would encourage lenders to reduce borrowers monthly payments based on the homeowner’s ability to pay. To attract lenders into the program, the government would guarantee to repay the lender for a portion of its loss if the borrower defaulted on the reconfigured loan.
How Outsourced Call Centers Are Costing Millions In Identity Theft
A former Chase call center rep tells the story about this one thief who was able to rip off one customer for over $40,000, thanks to his constant outwitting out the internationally out-sourced security department. It wasn’t that hard. Over and over again, he was able to commit credit card fraud just knowing the guy’s name, social, and mother’s maiden name.
Banks Using $700 Billion Bailout To Buy Other Banks, Not Make More Loans
Washington told taxpayers a major rationale for us to fork over $700 billion to banks was to save the American economy by making loans more accessible, but it looks like at least at Chase they rather use it to buy other banks, NYT reports.
Reach Citibank Executive Customer Service
Having trouble getting people at Citibank to help you out? If you’ve tried regular customer service and supervisor multiple times and failed, try these numbers:
24% APR Crushes Reader To Death
I have a card with one bank (that I am trying my hardest to pay off ASAP) that is 24% APR. It is killing me. A week or two ago, you had an article about a woman who paid off all her credit card debt over the course of 20 months or so. Good for her and it was a good story. One thing about it had me wondering though. She said that she negotiated with her lenders to get lower interest rates on her cards. How do you suggest I do that?
After Losing His Home, Man Trashes House, Spray Paints Message To Bank
Here’s an odd story from the Bay Area. A man who says his house was “sold without his knowledge” to a bank after he signed a “deal” to prevent foreclosure has trashed the property — spray painting a message to the new owner.
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More countries on the global money trouble list: Hungary, Serbia, Baltic states, Kazakhstan, Indonesia, South Korea, Argentina Russia, Brazil, Ukraine, Poland. [Slate]
