Presidential Call to Action on Credit Card Companies that received TARP funds

Presidential Call to Action on Credit Card Companies that received TARP funds

Credit card companies are preying on the plight of Americans that are already in a financial crisis. Many credit card companies are raising annual interest rates on credit cards making minimum payment raise an average of 30-50% regardless of the consumer credit scores or payment history. These are banks that received taxpayer government assistance under the TARP program and now they are receiving double benefits through their hikes in minimum monthly payments. As the already financially strapped consumer tries to make the minimum monthly payment to at least maintain their good credit through the economic crisis they are finding themselves in a significant dilemma of whether to continue making the payment, seek debt relief, or simply default on the credit card payments and accept the credit hit. Credit Card companies hope that the consumer will chose the last option so that they can receive more bailout monies as the demonstrate to the Federal Government that they are unable to meet their own financial obligations.

As taxpayers that has already given a hefty bailout to these credit card companies through the banking system, it is up to the Federal Government to step in and regulate the interest rates that banks can charge during this economic crisis. If a bank has received bailout monies, they should not be able to increase interest rates over the next ten years to allow consumers and the economy to recuperate from this economic dilemma that they have created. Why should the American taxpayers receive a double hit, bailout monies and increased monthly payments, to supplement the high salaries of the executives at these banks (http://www.moneymorning.com/2008/12/23/executive-compensation-at-banks/)? The concern of many is that there was not due diligence by the Federal Government to investigate past practices of these organizations to determine what caused the financial instabilities prior to the bailouts. There was no financial analysis of the organization to determine where the organizations sustained the losses and why. When the banking industry indicated that they would fail without government assistance, there was no government officials saying “why, when, how, where, and what”.

When a taxpayer requests government assistance through the Department of Health and Human Services, they are subject to intense scrutiny. They have to provide their income, household information, bank data, and everyone within the household income. Many are subject to interrogations as to why they need the money, why they are not working and limitations are put on how long they can receive the money and what it can be used for. When the banking system requested assistance, the only question was “How much?” What is wrong with this comparison? Ordinary citizens are homeless, without utilities, families are living on the streets while what are rightfully taxpayer monies is being used by the Federal Government to increase the wealth of the CEOs.

This is a call to action for the Federal Government and President Obama to intercede with the credit card companies and banks and indicate that if they received bailout monies they cannot increase the annual rates and that they should actually be lowered to less than 10% to allow the American taxpayers to be able to “survive” in this economic crisis. While there are debt relief organization that can assist consumers, they are of little assistance when the consumer can barely make payments and while using the debt relief organization they are paying a fee for the organization to be an intermediary. There should be automatic debt relief programs offered directly from the credit card companies for consumers that are unemployed so that they are not subject to the continuing interest rates while unemployed. Federal Government and the President have an obligation to the consumers to enforce that reduction of interest based on the utilization of taxpayer monies to assistance these companies.


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