Saturday, October 8, 2011

Bank Of America: Criminal Intent

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Bank of America's demonstration of unmitigated greed, selfishness and a total lack of regard for customers and depositors speaks of more than the inevitable feeding frenzy before a colossal economic fall -- it sets the tone for uncontrollable lawlessness amongst the amoral and faceless institutions which were the beneficiaries of the US Government bailout...they were institutions deemed by the Fed, the Treasury and all of the "pundits" and academicians responsible for making economic policy as "too big to fail."

These are the institutions that were rewarded for their unprecedented cupidity, negligence and out-and-out fraud. They helped to precipitate a global economic crisis. They were rescued (TARPed, actually). They responded and demonstrated their 'gratitude' by paying out giant bonuses to their highest-ranking executives (i.e., the perpetrators in this pennywise passion play), radically cutting back on credit lines to consumers and businesses, increasing fees and charges on every conceivable service, and with some casual admissions of further accounting adjustments for which they expect the taxpayers to pay.

Either the largest institutions are looting the town while it is burning -- because they have determined to grab what they can while they can prior to the complete collapse of the US economy -- or they are merely taking advantage of a failure on the part of government in general and law enforcement in particular, to investigate, prosecute and actually punish both these fiduciary entities (corporately) and the individuals (personally) who continue to derive the greatest benefit from this crime spree.

Neither motive bodes well for consumers or businesses.

Actionable Items:

Forget the rhetoric. Forget about the moral implications. Forget about your natural inclination toward loyalty and tradition. The smartest businesses will methodically take their deposits and their credit relationships out of B of A and place them into a varied portfolio of smaller, geographically-diversified financial institutions.

Hedge your bet against this runaway train by diversifying and reducing your critical dependencies. This is sensible risk mitigation, as well as an opportunity to discover the potential of new financial relationships. While I do not offer professional financial, investment or advice, I do offer my opinion as a reasonable businessperson.

Diversify away, methodically, in reasonable increments and within the next year at most, from any institutions which have been labelled as "too big to fail." They are, at best, insatiably greedy, and at worst, pathologically criminal, with knowledge and intent. And they have given more than an adequate warning to all. Other giants will follow in the footsteps of Bank Of America. They will not appeased.

You might explore credit unions, asset-based lenders, leasing companies, and other non-bank sources of capital and credit.

An excerpt of an article from Truthout about B of A's most recent piracy against consumers (debit card access fees?!) follows to help you build up your resolve. Put your politics aside, and think about surviving and thriving.

Douglas E Castle []
Article Excerpt:

It was an extraordinary moment: a United States senator called for a boycott of the Bank of America.

Sen. Dick Durbin (D-Illinois) took to the Senate floor this week to denounce how Bank of America is gouging Americans through excessive charges on debit card "swipe fees."

Debit card swipes, according to the Federal Reserve Bank, cost at most 12 cents to process, but the banks have historically charged, according to Durbin, on average 44 cents to the retailer. On October 1, a new law went into effect that put a ceiling on the swipe fees at about 24 cents. So, the Bank of America and other banks "too big to fail" are still getting at least a 100 percent profit for every debit card transaction, which is crippling some small businesses.

Moreover, the Bank of America represents the greed that is at the heart of Wall Street by not being content with a 100 percent profit. To circumvent the cap on grossly excessive swipe fees, the Bank of America is now going to charge customers $5 a month as a debit card "use fee."

"Bank of America customers, vote with your feet," Durbin urged in outraged reaction to the new "service charge."

"Get the heck out of that bank," Durbin exhorted. "They are overcharging their customers even for this new debit card reform. It is hard to believe that a bank would impose [such a fee] on customers who simply are trying to access their own money on deposit at the Bank of America."

"After helping to drive our economy off the cliff's edge in 2008, Bank of America was happy to accept a $45 billion dollar federal bailout for their stupidity, their greed and their mistakes," the senior senator from Illinois said with disdain. "And it was just as happy to take that money and hand out $3.3 billion dollars in employee bonuses in the same year 2008."

Remember that if you have a savings account - unless you have a ton of money - in many cases you are earning no interest or just pennies, even though the bank is lending out your cash and getting double-digit returns in loan interest.

This is legalized criminal behavior. The New York Police Department is arresting the wrong people down in southern Manhattan. What's going on in the Bank of America and many other New York City financial institutions is the looting of the United States."

Mark Karlin
Editor, BuzzFlash at Truthout

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by Douglas E Castle

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