Morgan Stanley, Smith Barney, and UBS are now selling � ���"structured notes� �� �, which are essentially highly risky and complex derivatives for small businesses.46
In recent months, investment banks have once again started repackaging old mortgage-backed securities and selling them, again, as new products. These were the same toxic securities that helped cause the crisis in the first place, and banks are now repackaging and marketing them as super-safe AAA-rated investments.47 Why should they worry when they have the US taxpayer to bail them out should things go awry? All they have to do is threaten us with the possibility of system-wide collapse of our economy and they will get the bailout they need. It's called � ���"too big to fail.� �� � It should be called � ���"too big to avoid the Sherman Anti-trust Act.� �� � In other words, such gigantic firms should be broken up into smaller companies just like Standard Oil was broken up into 34 separate companies by the US Supreme Court in 1911, and just like AT&T's local operations were split into seven independent Regional Holding Companies, also known as Regional Bell Operating Companies, or "Baby Bells" in 1984.
Banks like Wells Fargo, US Bank, and Fifth Third are starting up or expanding usurious payday loan programs that charge interest rates as high as 400% to low-income, high-risk consumers who typically cannot afford to pay back the loans.48
Hiking Bank Account Fees
Banks are also boosting their bottom lines by raising fees on consumers to offset their losses on risky loans and toxic securities.49 American consumers will pay more than $38 billion in overdraft fees this year,50 more than the annual revenues of most Fortune 500 firms including Apple, Google, and Nike.51 That is $125 for every man, woman, and child in the United States.52 The national median overdraft fee rose to $26, the first time the fee has gone up during a recession.53 Earlier this year, Bank of America more than doubled its daily overdraft fee limit from $160 to $350.54
But the fee increases are not limited to overdrafts. Bank of America also increased its monthly maintenance fee for its MyAccess Checking Accounts by 50% this year.55 Meanwhile, Wells Fargo, JPMorgan Chase, and US Bank are passing increased costs for deposit insurance onto customers.56 As the New York Times put it, the result is that � ���"Americans are paying more to save and spend their money.� �� �57
Raising Credit Card Rates
Banks are also running up interest rates and fees on credit card rates in an effort to boost profits before the new credit card reforms take effect next year.58 This year, Citigroup has raised interest rates on 13-15 million credit cardholders, by an average 24%, or nearly three percentage points.59 Bank of America, JPMorgan Chase, and Capital One also hiked up interest rates on many of their cardholders that had never missed a payment.60 Bank of America had already been arbitrarily raising interest rates on at least one million play-by-the-rules, pay-on-time customers even before the bailout.61 Bank of America, Chase, and Discover have all raised transaction fees for balance transfers on credit cards by at least 20%.62 As Senator Durbin said of the US Senate, � ���"Frankly speaking the banks own this place,� �� � or words to that effect. http://www.huffingtonpost.com/2009/04/29/dick-durbin-banks-frankly_n_193010.html
Cutting Small Business Loans
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