How The Banks Thank You For Bailing Them Out

The nation’s banks have accepted hundreds of billions of bailout dollars from the government, which – in more direct language – means, eventually, from the American taxpayer. As reported by World Net Daily on February 19, 2008, citing information derived from a handy calculator supplied by Right.org, “according to the calculator, with a total bailout of nearly $8.5 trillion divided among 300 million Americans, every man, woman and child in the U.S. would have a tax burden of $27,599. (The IRS reports there were only 138 million taxpayers in 2007, putting the load at $61,153.04 per taxpayer.)” And, topping off their displacement of their private losses to the shoulders of the consumer, a burden never to be lightened by a share of their private profits, is a continuous effort at taking even more from the nation’s already sacrificing people. Banks Getting A Cut Of Unemployment Benefits Kind of ironic, when you consider one of the primary ways in which the current economic downturn, recession, depression – whichever word best matches your economic perception, there are experts touting each as an accurate description of today’s situation – broke into public consciousness, which was via the sub-prime mortgage fiasco, the housing crash, and the resulting credit crunch. After all, the banks we’re bailing out lost big as a result of the sub-prime lending fiasco, the insanity of the derivatives market, and assorted other risky business behaviors, making a hefty contribution to the rising unemployment and generally poor economy we see today. At a time when unemployment is rising and the number of people receiving unemployment benefits is reaching record levels, billion dollar bail out banks, such as JP Morgan Chase, Citigroup, and Bank of America – all of which have benefits in the 10s of billions each from bailout packages – have gotten a sweet revenue increasing deal from the government, as has been broadly reported by publications and news agencies ranging from the Consumerist to Reuters to daily newspapers throughout the nation. Many states are actively promoting the delivery of benefits through debit cards, rather than issuing and mailing, with some states making this method mandatory. The banks involved benefit from this, as they should – after all, nobody should be expected to work for free – via interest earned on the funds before they are withdrawn, as was pointed out in a February 20, 2008, article published on Consumerist.com. However, that simply isn’t enough for the banks fortunate enough to have gotten such a reliable stream of income deal during these tough banking times. Nope, the banks involved have to up their take to include variety of fees, never mind that this is unemployment money, so obviously the people drawing it are struggling to make due without a job. Assorted fees the banks take from those using this means of accessing their funds vary according to the specific arrangements the bank made with the state, according to an Associated Press report carried by ABC News on February 19, 2008, and can include charging for customer service calls, for withdrawing money more than once in a day, and for using non-bank specific ATM machines. Some even use the now standard revenue enhancing technique that is often referred to by the insulting to the intelligence phrase “overdraft protection” – a $20 overdraft fee, something pretty easy to rack up before realizing how a call or two to customer service can affect available balance and disrupt to the penny calculations when using the card in grocery stores and such. You’d think they could have the decency to just decline the purchase for the poor unemployed individual, but no. The banks using this revenue booster could care less about decency, it seems. Money Too Tight To Loan, But Not Too Tight To Spend Many of the bailout banks are full of excuses when pressured to lend, despite loosening the flow of credit being among the primary reasons for the loans and bailouts to begin with. However, while crying poor when questioned by officials and others as to why they’ve been slower than expected in applying their bailout funds to making loans, billion dollar bailout banks are still laying down some serious cash in other arenas. For example, in November of 2008, USA Today published an article detailing the amount of money bailed out banks spent on lobbyists. According to data cited in the article, JP Morgan and Chase received, Bank of America, and Citigroup each received $25 billion [by the publication date of the article] from the government and during the time between January and September of 2008, each spent about $5 million on lobbying politicians. These are just a few of the banks that received assistance and spent a significant portion of that on lobbying lawmakers. Furthermore, according to a story published by the American Institute for Economic Research on February 23, 2009, “over 161 financial companies that were approved for money under the $700 billion Troubled Asset Relief Program (TARP) passed by Congress last year also invested lots of money in the 2007-2008 election process. Candidates running for Federal office, as well as the political parties and committees supporting them, received $37.5 million dollars from the banks now on the government TARP gravy train.” Ah, but that’s not all. There have been bonuses, the now infamous Citibank new private jet incident, which – some say due to public outrage – has been canceled, and millions spent by numerous banks to have their names on sports stadiums. Yes, that’s right… taking money from taxpayers and spending tens and tens of millions of dollars to name stadiums that many taxpayers can no longer afford to visit. As reported by Bloomberg.com on February 5, 2009, “Citigroup Inc., targeted by lawmakers for paying $400 million to put its name on the New York Mets’ new ballpark, and seven other banks that received government funds may face questioning by Congress for spending $845 million on stadium sponsorships. Bank of America Corp., which like Citigroup received $45 billion in government funds, is paying $140 million to have its name on football’s Carolina Panthers stadium. JPMorgan Chase & Co., which received $25 billion from the Troubled Asset Relief Program, is spending $66 million for branding Chase Field in Phoenix, home to baseball’s Arizona Diamondbacks.” While, of course, people still need mortgages and loans, as well as a place to put the money they’ve still got, perhaps the time has come to be a bit more thoughtful in the choosing of banks. Maybe a bailout bank treating the consumer with such contempt should be avoided in favor of smaller regional and local banks, who tended to manage their finances in a more responsible manner anyway, or local credit unions. Perhaps it is an era for thinking outside of the fiscal box, and considering such options as peer-to-peer lending, reducing as much as possible the amount of interaction with and profit to these grasping, ungrateful, multi-billion taxpayer bailout banks.