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Advanta Corp. will pay up to $35 million in restitution to customers for alleged violations of federal consumer-protection and banking laws, the Spring House credit card company said today. Advanta, which froze its small-business customers' credit cards at the end of May because of mounting defaults, also agreed to pay a $150,000 civil fine under the deal between Advanta's bank subsidiary and the Federal Deposit Insurance Corp. The company admitted no wrongdoing. (snip) The FDIC said it received numerous complaints about substantial increases in annual percentage rates from borrowers who neither exceeded their credit limit nor were late on payments....

Ex-employees, backed by SEIU, say working-class and immigrant clients are urged to sign up for multiple services that carry high interest rates and fees. BofA denies any wrongdoing. CHARLOTTE, N.C., June 30 (UPI) -- Nine former Bank of America employees accused the bank of over-selling services to Hispanic clients to create financial chaos that would result in bank fees. "We were coached every day to push multiple checking accounts, credit cards and debit cards even when the customer didn't understand how to use them," said former employee Gabby Ornelas of Landover Hills, Md. Ornelas, who speaks Spanish, said she was...

Anchorage, Alaska - Governor Sarah Palin will ceremonially sign House Bill 172 in Anchorage Wednesday afternoon. HB 172, sponsored by the governor, allows the Department of Revenue to enter into a bond purchase agreement and letter of credit with the Alaska Student Loan Corp to finance student loans. Without this action, the state would have been unable to make student loans for the upcoming school year.

Reuters) – Citigroup Inc has increased interest rates on up to 15 million U.S. credit card accounts just months before curbs on such rises come into effect, the Financial Times reported citing people close to the situation. Citigroup had upped rates on 13 million to 15 million credit cards it co-brands with retailers such as Sears, the paper said.

Repaying a student loan could soon be a little less painful. Starting this week, anyone with a federal student loan can apply for a program, run by the Department of Education, that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years. Eligibility for income-based repayment (IBR) is determined by a person's income and loan size. A calculator at http://www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday. "It's a way to borrow for college without...

snip “My monthly payment from my four accounts will go from $961.00 a month to $2394.00 a month. Needless to say I will not be able to make these payments and will end up defaulting on my accounts and probably claim bankruptcy.”

  Problem where YOU live...?   I KNOW, given the state of the Economy, everyone is VERY concerned these days... ...and I have been meaning to ask you...        ...Do you have much of a problem with charging elephants where you live...???                 http://www.seadogbytes.com/sbimages/ChargingElephant.jpg     ...I understand that the ones from Kenya are the absolute worst....   http://www.seadogbytes.com/sbimages/ObamaKenyaMC.jpg    

The cascade of foreclosures, bankruptcies and bad debt that has rocked the market and sent the economy into a downward spiral has inspired the Obama Administration to propose a radical remedy: government oversight of consumer credit. “Too many households are spending money they don’t have and incurring debt they can’t repay,” said US Treasury Secretary Tim Geithner. “This is a formula for fiscal disaster. It has to stop.” Under the President’s plan, a new Financial Consumer Agency (FCA) would be created within the US Treasury Department. The FCA would be empowered to scrutinize all forms of consumer credit. If it...

Borrowers should accept a new world of tighter, more expensive credit as financial institutions recover from months of bad loans, failed banks and foreclosed homes, Citigroup Inc.'s chief executive said Monday. During the past few years, "U.S. consumption and credit creation were the two main drivers of growth," Vikram Pandit told a conference of business, economic and government leaders in downtown Detroit. "The world needs new drivers of growth — and a new business model." Pandit's speech closed the first day of the three-day National Summit, which is expected to draw about 3,000 attendees to Detroit over three days. The...

U.S. credit card defaults rise to record in May By Juan Lagorio Juan Lagorio NEW YORK (Reuters) – U.S. credit card defaults rose to record highs in May, with a steep deterioration of Bank of America Corp's (BAC.N) lending portfolio, in another sign that consumers remain under severe stress. Delinquency rates -- an indicator of future credit losses -- fell across the industry, but analysts said the decline was due to a seasonal trend, as consumers used tax refunds to pay back debts, and they expect delinquencies to go up again in coming months. "I find it hard to believe...

More tales from broken the credit markets. Read » Ford has been learning the danger of being a relatively successful company in the age of bailouts: higher borrowing costs. The Associated Press breaks down the numbers: GMAC, 9.9 percent owned by GM and lender to its dealers and buyers, sold $3.5 billion of 2.2 percent three-and-a-half year notes on June 3 guaranteed by the Federal Deposit Insurance Corp. priced at 99.841 cents on the dollar to yield 2.25 percent. Ford issued $1.1 billion of five-year 8 percent notes May 28, priced at 82.036 cents on the dollar to yield 13...

ALL BUSINESS: Bond-market rout boosts mortgage rates, undermining economic prospects

Credit-card companies are getting a lot of grief in the blogosphere (not to mention Congress) lately. Most of these critiques are just a bunch of shaggy dog stories, but the very smart Rortybomb has an extremely numerate post in which he points out that when the interest rate on your plastic goes from 8% to 28% because you’re two days late on a payment, it’s highly unlikely that this is a pure reflection of a change in your probability of default. His analysis indicates that the way this price (i.e., interest rate) change is determined is not by the change...

Amidst the anti-market frenzy in Washington, D.C., President Obama today signed into law a bill that will drive up interest rates on credit cards and force people with good credit to pay more to subsidize people with bad credit. The bill, which extends a big, fat middle finger to credit card companies by limiting their ability to price their products according to risk, swept through Congress this week at breakneck speed. According to Edward L. Yingling, CEO of the American Bankers Association, provisions in the legisation "will undermine the availability of credit." Credit cards are "a strong economic driver and...

The widely heralded credit card reform legislation making its way through Congress is a sellout to the credit card companies. Obama has proposed and Congress has passed a series of minor reforms that deal with the fringes of the problem - late billings, retroactive interest rate hikes, misapplication of payments and such - but fail to reform the most basic offense of the companies: their usury.

CHICAGO (Reuters) - GMAC LLC, which is giving the U.S. Treasury Department a 35.4 percent equity stake, said on Friday it might take 17 years for the government to shed its investment if the auto and mortgage lender were to go public. The timetable suggests that federal involvement in GMAC's affairs could persist long after troubles plaguing the economy and the auto industry end. GMAC has gotten $12.5 billion of government infusions since December, including $7.5 billion on Thursday.

At the end of his book's harrowing account of mortgage mistakes and credit card crises, Edmund Andrews writes: "While our misadventure had certainly been more extreme than those of many other Americans, our situation was not all that unusual." And indeed the book reads like the story of an American Everyman, easily sucked in to the alluring world of easy credit as he struggled to blend a new family. The terrifying implication is that it could happen to you--to anyone who leads with their heart and not their head. But en route to that moral, it turns out the story...

The U.S. Treasury Department is preparing to announce as early as Wednesday that it will invest an additional $7.5 billion in lender GMAC LLC in a deal that could allow the U.S. government to hold a majority stake in the Detroit-based auto finance company, the Detroit News reported. GMAC (GJM), which also provides loans for consumers to buy General Motors Corp (GM) and Chrysler LLC vehicles, has been in talks for several weeks to secure additional capital, the newspaper said. The U.S. Treasury declined to comment. A GMAC spokesman could not be immediately reached for comment. U.S. Treasury Secretary Timothy...

NEW YORK, May 20 (Reuters) - American Express Co (AXP.N) Chief Executive Kenneth Chenault said a new law that would impose sweeping limits on credit card issuers will likely hurt his company and reduce the flow of credit to consumers. Chenault said the legislation will be "more negative than positive" for American Express, because it will make it more difficult for the credit card and travel services company to set rates based on the risk its customers pose. Chenault said: "My concern is from the standpoint of credit being available, to particularly consumers who need it."

...Thune was not alone in voting "no." A Democrat — *gasp* — and fellow South Dakota Senator Tim Johnson — also voted "no," probably for the same reason Thune voted "no" which was because it was going to kill 3,000-5,000 jobs in their state, which is simple math.

Sweeping new restrictions on credit-card companies would ban extra fees and fluctuating rates and arm tens of millions of consumers with more information on their debts. Starting in February 2010, a Senate bill passed Tuesday would ban practices such as charging consumers to pay by phone and sudden surges in interest rates. Payments above the minimum due would be applied to balances with the highest interest rates. Information once relegated to tiny print must be made clearer, and consumers will soon be told how long it would take to pay off a balance if they pay only the minimum due.

New Laws Would Limit Fees, Rate Flexibility; Critics See an Industry Bluff Credit-card companies, resigned to tough new rules for their industry, are threatening to raise interest rates on some less-profitable customers or even cut them off entirely. The Senate today is expected to approve a bill to overhaul the credit-card industry's business practices, with the House of Representatives soon to follow. President Obama could sign the bill as early as next week. The bill limits fees, imposes new restrictions on when card companies can raise rates on delinquent customers and sets new rules for how companies apply payments on...

A federal judge has issued a pair of temporary restraining orders to halt what officials describe as a wave of "robo-calls" warning people their auto warranties are expiring and offering new service plans. U.S. District Judge John F. Grady issued a temporary restraining order against Transcontinental Warranty Inc. on Thursday and one against Voice Touch Inc. on Friday. The Federal Trade Commission filed suit against the companies in U.S. District Court in Chicago on Thursday. Chairman Jon Leibowitz says the FTC "has disconnected the people responsible for so many of these annoying calls." Officials say Americans have gotten as many...

Restructuring experts are entering unchartered waters in the Persian Gulf. Kuwait’s Investment Dar, the Islamic finance holding company which owns a majority stake in British luxury carmaker Aston Martin, has suspended payments on its KD1bn ($3.5bn) debt. Its strategy of relying on short-term financing was crippled by the credit crunch. Sharia law provides no precedent for what happens next. Islamic finance is a recent phenomenon. The aim was to create products that work exactly like Western debt instruments, but without actually making “interest payments”, which is prohibited under some interpretations of sharia law. So, broadly speaking, the lender is called...

President Obama stepped up his populist campaign against the credit card industry on Thursday, pressing Congress to pass new limits on “anytime, any-reason rate hikes,” unfair late fees and misleading policies. As the Senate deliberated on legislation, Mr. Obama convened a town-hall-style meeting here led off by a woman who complained of being gouged by her credit card company. The president cited her story to make the case that banks and credit card companies have been taking advantage of loose rules to make money at the expense of hard-working Americans. “We’re lured in by ads and mailings that hook us...

The problem with the credit-card industry isn't just credit-card companies - it's you too. This week the Senate takes up a bill that would seriously clamp down on some of the industry's most unsavory practices, a piece of legislation that President Obama has said he wants on his desk by the end of the month. The bill, which builds on rules issued by the Federal Reserve Board and other agencies at the end of last year, would do away with interest-rate hikes on existing balances, prohibit issuers from putting customer payments toward lower-rate balances first and abolish the practice of...

LONDON: Criticising the British government for ignoring the manufacturing sector, Indian industrialist Ratan Tata has said he was not asking for a bailout but only a "facilitation of access to credit on commercial terms" for his businesses in the UK. In an interview published in British newspaper Sunday Times, Tata said: "We're responsible for the fortunes of the company but this is a bone-dry situation in terms of access to credit. Nobody can operate on that basis unless you have large cash balances, which we don't. My concern is that the government doesn't appear to care about manufacturing." The comments...

With mega financial institutions teetering on the brink of insolvency, President Barack Obama is proposing what he calls a “people’s credit” solution. In a “town hall” meeting to be held later in the week, the President is expected to ask Americans to “step up to the plate” and put their share of the federal deficit on their credit cards. The President said that “when you do the math, this year’s trillion dollar deficit works out to a modest $10,000 per household. Since most households have more than one credit card, the amount per card may be half this or less....

Send me a bill that stops credit card companies from taking advantage of consumers, and do it by month's end, President Barack Obama is demanding of Congress. But there's no guarantee lawmakers will deliver by Memorial Day, and the banking industry is fighting back. "Americans know that they have a responsibility to live within their means and pay what they owe," Obama said in his weekly radio and Internet address Saturday. "But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties and hidden fees that have become all too common." Legislation known...

JPMorgan Chase and others are shoring up balance sheets by reducing or eliminating these financial lifelines to entrepreneurs For small business owners, a line of credit can be a lifesaver, giving them a buffer against cash-flow problems and enabling them to handle regular expenses such as payroll. But beginning in March, according to documents obtained by BusinessWeek, JPMorgan Chase suspended credit lines for a large number of business owners. According to someone familiar with the matter, the move affected thousands of businesses. They had been clients of Washington Mutual before Chase bought the ailing bank in September 2008. The documents...

Some high-risk borrowers now get car loans with a digital leash attached: if they don't pay up, they can't drive. High-risk borrowers now get car loans come with a digital leash attached: if they don't pay up, they can't drive. (ABC News Photo Illustration) More PhotosElliot Munoz loves driving his Jeep Liberty around his hometown outside St. Louis, Mo. He particularly likes the four-wheel drive for the snow in his hilly town. But when a red light on his dashboard starts flashing, Munoz knows he needs to get out his checkbook or else he won't be able to start the...

Federal guarantees by 13 countries on more than $400 billion of financial company bonds are punishing the AAA-rated World Bank Group with record borrowing costs -- an indication of what can go wrong when government gets in the way.The Washington-based ...

wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday. China has the world's largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.

Sen. Chris Dodd (D-Conn.) said on Wednesday evening that the Obama administration was "ambivalent" about the bill's key provision and didn't make it as high a priority as credit card reform. The House-passed bill allows judges to renegotiate - or "cramdown" - mortgages for homeowners in bankruptcy. "They could have done--there was always some ambivalence about this. I've sensed that as well. The president said he was for it and that's pretty good," said Dodd. He then qualified his statement: "The administration said they were for it. I wouldn't expect much more probably. Credit cards is a larger issue. It's...

Flanked by two prominent activist attorneys and backed by a throng of supporters, Minneapolis resident Rosemary Williams spent her 60th birthday in court Wednesday, resisting a lender's attempt to evict her from her foreclosed house. She and supporters vowed that if she loses in court, they will use non-violent civil disobedience to try to block authorities from removing her from the south Minneapolis house where she's lived for 23 years.

Bank of America warned of worsening loan default problems Monday even as it posted a first-quarter profit of $2.81 billion. Investors concerned about the banking industry's health sent financial stocks and the overall market sharply lower. Although Bank of America said higher revenue from the purchase of Merrill Lynch helped offset a surge in credit costs, it took a hefty $13.4 billion provision for credit losses during the first three months of the year.

After beating analysts' earnings expectations last week, JPMorgan Chase(JPM Quote) Chief Executive Officer Jamie Dimon vowed to return the $25 billion in government aid the bank had received "as soon as possible." Dimon should hold on to those funds. The pace of defaults in the company's credit card business, its third-biggest revenue source, rose for the eighth-straight quarter. If the economy weakens further, more of JPMorgan's customers will probably stop paying their bills. Banks are experiencing record credit card defaults as strapped consumers lose jobs and miss loan payments. The rate of uncollectable accounts is rising across the industry. Competitors...

White House economic adviser Larry Summers told NBC’s “Meet the Press” that President Obama plans to join a push planned by congressional Democrats on “credit card abuses” as part of looking out for the little guy while rebuilding the nation’s financial system. "We need to do things to stop the marketing of credit in ways that addicts people to it," Summers said. Summers told moderator David Gregory that Obama is concerned about “the way people have been deceived into paying extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into.”

WASHINGTON -- President Barack Obama will soon turn his attention to the issue of high credit card rates and other abuses, giving a potential boost to congressional efforts to rein in credit card companies. The president is "going to be very focused, in a very near term, on a whole set of issues having to do with credit card abuses," White House economic adviser Larry Summers said on NBC's "Meet the Press" airing Sunday. He said the abuses include charging consumers "extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into." Mr. Summers...

ORLANDO, Fla. -- Eyewitness News has learned that millions of debit and credit cards at SunTrust and several other major banks are at risk. The card information was somehow compromised while in the hands of a third party vendor. Banks are sending their customers letters from SunTrust, Bank of America and Fifth Third bank

Washington, D.C. (AHN) - Capital One has experienced a surge in charge offs as credit customers in the U.S. default on credit card debt they can't pay.The number of Capital One customers unlikely to pay surged to 9.93 percent in the U.S. in March compared to an 8.67 percent charge off rate internationally. Financial experts say that the growing U.S. unemployment rate is of concern. Historically, rising credit card charge offs have lagged increases in unemployment, but some think that trend might be reversing. Capital One (NYSE: COF) stock has lost half its value since the beginning of the year.

he jump in likely credit-card loan losses at Capital One Financial (COF) suggests that other major consumer lenders may be facing similar losses for the first quarter. On Apr. 15, the issuer of MasterCard and Visa credit cards reported a one-month spike of 1.27% in net charge-offs for U.S. cardholders, to 9.33%, in March, surpassing the increase in unemployment by a widening margin.

Concerns over US credit card companies grew on Wednesday as Capital One Financial, a leading issuer, said its credit card loss rates were exceeding the unemployment rate. Credit card writedowns have topped the jobless rate on a handful of occasions in the past, and only once by any significant margin. That was in 2005 as a flood of borrowers entered bankruptcy and wrote off their credit card debt before the passage of a law that made it harder to file for bankruptcy. Credit card loss rates have in the past closely tracked the rate of unemployment. But in this recession...

An examination of the Obama’s finances show that they were living off lines of credit along with their salaries until 2005, when the book royalties came through and Michelle received her astonishing 260% pay raise at the University of Chicago. This reexamination of the Obama’s finances was triggered by a Chicago Tribune story on whether the Obama’s should refinance their home in Chicago. In addition, it is tax time with tea parties and that is another good reason to take another look. As we first reported here last year, the Obamas received a better mortgage rate from Northern Trust than...

MADISON, WI - U.S. Sen. Herb Kohl warned college students Tuesday to be wary of credit card marketing ploys involving free T-shirts, blankets and food, saying they can lead to mountains of debt. Kohl spoke to about two dozen students at the University of Wisconsin-Madison, touting a bill that would place new limits on credit cards for college students. He complained about direct-mail offers sent to students and kiosks on some campuses where companies offer freebies to students for signing up. "Be very cautious," said Kohl, a Democrat. "Don't be enticed by a free sandwich or something. A lot of...

Below are summaries of class action lawsuits filed against major credit card banks. This is not a complete list, just a few samples. First USA (which became BankOne which became Chase)-- A class action lawsuit was filed against First USA when it changed the due date so that some customers, accustomed to paying by a certain date each month, would be caught off guard. Many of them would send in their payments late, not realizing that their due date was a few days earlier than they thought. First USA charged customers $29 every time a payment was late. When two...

We’re all searching for security in one form or another, whether it’s security in the form of personal safety and protection or security in the form of freedom from anxiety and fear. With our world turned upside down by the failure of financial, retail, and manufacturing giants along with rising unemployment and fears of a global depression, the search for financial security takes on a new level of importance. Here are my seven keys to acquiring financial security:

Ireland was stripped of its top AAA credit ranking and downgraded to AA+ by Standard & Poor’s(S&P) yesterday while being warned that it could drop further if Dublin fails to get its public finances under control. The former “Celtic Tiger” economy is the second eurozone country after Spain in January to lose its top ranking since the onslaught of the global downturn.Such a downgrade will increase Ireland’s borrowing costs. S&P said the Irish Government had underestimated the scale of its fiscal problems and the agency dismissed the possibility of a solution emerging at an emergency budget next week. “The downgrade...

The Treasury and the Federal Reserve are throwing trillions of dollars at financial firms to prod them to lend more. But even if those programs succeed, debt-strapped families probably won't want to borrow hand over fist. Consumer spending rose 0.2% in February, the second straight gain, the Commerce Department said Friday. But that was due to January's spike in disposable income. Total wages haven't risen since August due to soaring job losses.Household net worth has dived by $12.8 trillion since Q4 2007.So it's no wonder that demand for all types of consumer loans is weak. "There will be some pent-up...

Saving Money is Bad for the Economy: Personal Savings Rate Higher, Consumption Slightly Up, Banks get new American Express, and Markets Begging for Money. Posted by mybudget360 in US Dollar, bailout, bankruptcy, banks, budget, credit cards, economy, monetary policy 0 Comments Last month the savings rate hit the 5 percent mark. That makes two months over 4 percent and for the first time in a decade that Americans have actually saved more than 4 percent for two consecutive months. Saved 4 percent of what? Of their personal income. You would think that most people would be saving a little bit...