How Bank of America can raise capital
Filed under: Banks, Ripoffs and Scams, Saving Money
Bank of America is one of the worst companies on the planet, making the Medellin Cartel look like Trader Joe's by comparison.
Yet for some reason the United States taxpayer has been told that he must send in cash to be poured into the company's coffers to help it pay its dividend and avoid a bankruptcy that would create systemic risk.
Browsing around for a savings account today, I had an idea about how Bank of America can raise capital. Take a look at the interest rates offered on savings accounts by various financial institutions, courtesy of BankRate.com:
- Flagstar Bank in Troy, MI: 2.28%
- Beverly National Bank Online: 2.28%
- Heartland Bank Direct in St. Louis, MO: 2.27%
- Goldwater Bank in Scottsdale, AZ: 2.24%
- Bank of America: 0.20%
So here's what happens: Bank of America goes crying to the federal government and says "We don't have enough money! We need more money and the market is so illiquid that we can't possibly raise cash! Wah, Wah, Wah!"
Hey Kenny (That's CEO Ken Lewis, America's favorite welfare brat), here's an idea: Maybe if you raised the interest rate on your savings accounts to something other than a sick practical joke, people would deposit their money with you and you wouldn't need to borrow money from Uncle Sam. Just a thought.
Meanwhile, the Wall Street Journal (subscription required) reports that "Starting with June account statements, any credit-card customer who carries a balance and has an interest rate below 10% will see his or her rate jump into double-digit territory. A company spokeswoman declined to provide an exact number, saying the changes would affect less than 10% of the bank's card customers in the U.S."
WalletPop covered the story this morning.
So let's recap: Bank of America pays people 0.20% percent on their money and then lends it out at interest rates over 10%. Then they plead for and actually receive a taxpayer subsidy and then turn around and raise people's interest rates on credit cards. Holy cow!
Ken Lewis made $24.8 million in 2007. No word yet on whether he keeps it in a savings account paying 0.20%.
Reader Comments (Page 1 of 1)
4-09-2009 @ 4:57PM
Steph said...
I must be in that "10 %" then. Won't be for long tho. I'm outta there. I'll take my money somewhere else (like they really care)
Reply
4-10-2009 @ 3:41AM
Jay Adler,Music Critic said...
April 12, 2009
I do not even have an account with Bank America, I have been paying an old balance off and I still got their predatory and quasi-usurious letter. This outfit is right out of 1984 and the way they arrogantly pushed me around over the phone, I am waiting for Bank America to place a telescope through our Master bedroom window. We can win this and here's how, Individuals such as myself who have legal training and court experience can send a dispute letter with the first bill and then figure out a payment perhaps $20 less than your usual remittance to accommodate your new inability to amortize the loan. In most states the bank must wait for as much as a month to begin the action. I am sure I can reel everything back at that point. If you are timid about fighting back, write your Representatives, agencies, newspapers, radio and TV with form letters fax or e-mail. That may make it more expensive for the Bank to keep this nonsense up. If you can cut up and close all your credit cards and go to debit cards your life will be a breeze with no interest or bills. If we do not have a we are not going to take it approach the country will never get out of the meltdown. Until they cave I would not use any Bank America products. I have had it -the Whole World Is Watching
Jayadlermusiccritic
Reply
4-10-2009 @ 9:23AM
Ken Collier said...
Bank of America just plain sucks. They are a rip off!!!!
Reply
4-10-2009 @ 9:48AM
Joni Mitchell said...
Bank of America is neither a bank nor American. It is a massive ponzi sceme that is breaking the back of America one credit card holder at a time. WHY does Uncle Sam allow this to continue? Shame on you Obama......You must march into the corporate offices in Charlotte, NC and personally fire Ken Lewis and have him escorted out by security. Then, book him, Dano!
I dare you!
Reply
4-11-2009 @ 7:29PM
Jay Adler said...
Something tells me Both Sides Now Joni Mitchell, the most revered Folk Rock Jazz musical genius would not be a blogger. Why do you identify youself in this manner?
4-10-2009 @ 1:40PM
belavucica said...
It's critical for the country to separate Bank, Security and Insurance in three different entities.
Small bank maybe are turn down but, a small businesses in this situation have taken their chance. If you are buyer, seller or expert some of them you should check new site and you will find such important information for your small business.
www.bizcloud.net
or
http://www.bizcloud.net/Texts/Owner/tabid/154/language/en-US/Default.aspx
or
http://www.bizcloud.net/Texts/Buyer/tabid/152/language/en- US/Default.aspx
Reply
4-30-2009 @ 5:43PM
Windy said...
Our members of congress allowed the banks to write the banking bills and put us customers in an untenable position -- the banks have ALL the power and we have none -- way to treat the citizens, go congress! NOT!!!
I've had the interest rates increased on all my cards even tho I've maintained my end of the contract (which stated I would have that interest rate "until the balance was paid in full") by paying my payments on time, without fail. They have breached the contract by increasing the rate without cause, and without my EXPRESS permission (via a back door "changes to your agreement" notice that no one ever reads and with a cutoff date for not accepting said changes mere days from receipt of the notice). Here is the letter I sent each of the cards that raised rates on me:
I absolutely object to the increase in interest rate on my account. You banks have gotten away with murder, you manipulated congress to make sure we consumers have little recourse to your usury. I had an agreement with you for a certain amount of interest "UNTIL the balance was paid in full" and now I'm paying almost double that agreed-to interest rate without my express agreement to the increase. If I were to renege on my part of the agreement you would come down on me with the full force of your power, yet I do not have the same recourse? Absolute bullsh*t! You take bailout money from the taxpayers and then treat your customers this way? Shame on you! You deserve to fail!
I canceled those cards (Chase and Citi), and now I am sending this information to everyone I know, and I am also going to post it all over the internet (like here). I am starting a "cancel your credit card" revolution and, hopefully, my activities will lead to breaking the backs of these huge usurious banks that our congress so stupidly coddles and caters to over the rights and best interests of the populace (because they control congress' puppet strings), and I don't give a DAMN what it does to the economy!
Join me, cancel all your credit cards (if you have a balance you can continue to make payments even tho the card is canceled) and spread the word to everyone you know.
Reply