[tomder55]

If you want to commiserate ,I've had a running battle with HSBC over other policies they adopt (overdraft)... and now a battle over an account I closed and they reopened without informing me(an issue that is getting uglier by the day) .

[NeedKarma]

Damn it, that's where I moved everything (HSBC). So far so good but I'll keep an eye on things.

[speechlesstx]

If you want to commiserate ,I've had a running battle with HSBC over other policies they adopt (overdraft) ...and now a battle over an account I closed and they reopened without informing me(an issue that is getting uglier by the day) .

I love HSBC, too but they haven't irritated me enough yet to tell them to kiss off. I have significant line of credit with them (with a zero balance) through a furniture store so I'll hang on to it for a while. My next battle though is going to be with Farmers Insurance and their obsession with raising my rates for no good reason. That's the one thing about Texas, we don't have an income tax but we have some of the highest property insurance rates in the country.

[spitvenom]

My wife works for a bank that strictly does business credit card. They jacked people's rate to 39% (because of the state their head quarters are I think they can go up to 40%). And now they are wondering why so many people are defaulting.

In my opinion they are worst then the mob.

[speechlesstx]

My wife works for a bank that strictly does business credit card. They jacked people's rate to 39% (because of the state their head quarters are I think they can go up to 40%). And now they are wondering why so many people are defaulting.

In my opinion they are worst then the mob.

That was a point I made with the "Sr. credit analyst" I spoke with who didn't seem to get the connection. If your line of reasoning was you had to raise the rates because of so many defaults, wouldn't that lead to more defaults?

[spitvenom]

EXACTLY Speech!! Yeah would you think someone would say Hey times are tough and we can probably look like we care about our customers if we helped them a little bit by freezing or lowering their rates. But instead they raise it so high people can't even pay them minimum so then they lose even more money. Just makes no sense.

[excon]

Just makes no sense.

Hello again:

You guys are talking about the symptoms, not the disease. In my view, in recent years, the entire industry shifted their focus away from providing customer service, and toward lobbying congress for laws that AUTOMATICALLY reward them whether they provided service or not.

The ability to arbitrarily raise your interest rate is the best example.

The natural progression of thinking like that, would be to raise rates instead of increasing customer service, and not thinking twice about it. That today, has evolved into an arrogant expectation by the banks, that that's the way it should be.

That is going to have to change. Under the new rules coming under Obama, they will.

excon

[speechlesstx]

The natural progression of thinking like that, would be to raise rates instead of increasing customer service, and not thinking twice about it. That today, has evolved into an arrogant expectation by the banks, that that's the way it should be.

We all want customer service, sometimes you sacrifice some of that for economics. Sometimes like this instance, you get screwed. I'll remedy that myself... but I don't put any hope in Obama's regulations restoring things to the way they should be. I just see more government involvement in every area of my life and don't believe that's going to be a good thing.

[excon]

I just see more government involvement in every area of my life and don't believe that's going to be a good thing.

Hello again, Steve:

Dude! You complain about a problem, and when I tell you that Obama is going to FIX the problem, you complain about that too.

Talk about the party of NO.

excon

[speechlesstx]

Hello again, Steve:

Dude! You complain about a problem, and when I tell you that Obama is going to FIX the problem, you complain about that too.

Talk about the party of NO.

OK, let me begin with NO since I'm of the party of NO. It's not that I would object to this particular fix, it's what else he might "fix" in the process that has me concerned. His plans to expand government exponentially is not a good thing for you or me. I feel confident that once you get over the honeymoon you'll get on board with that, too.

[spitvenom]

Speech I feel Confident that once this problem is fixed by Obama And nothing else gets "fixed" that doesn't need to get fixed you'll get over the honeymoon of distrust and you'll get on board with us.

[ETWolverine]

That was a point I made with the "Sr. credit analyst" I spoke with who didn't seem to get the connection. If your line of reasoning was you had to raise the rates because of so many defaults, wouldn't that lead to more defaults?

That's not a very good Sr. Credit Analyst. And I speak as a senior credit analyst.

I have been doing defaulted loan workouts for years. The one thing you shouldn't be doing if you want to get paid back is to make it harder for your customers to pay you back. By decreasing the customer's cash flow through an increase in interest, you are making it almost a sure thing that you will be suffering a loss.

The best method to use is as follows:

1) Freeze the line of credit so that the borrower cannot borrow more under your line... limit the possible loss of principal.
2) Meet with the customer and detgermine what he can pay and how often, and work out a payment plan that doesn't completely drive him into bankruptcy.
3)WAIVE the pentalties and fees and higher interest rates as long as he continues to pay according to the new repayment plan.
4) Continue to maintain regular communication with the customer so that you can remain on top of his financial condition and know where you stand.
5) Only if after trying to work with the customer he is still not doing what he should to fix the situation should you then start to take legal action like filing suit in court, raise the interest rates and levey the fees. Because at that point, the customer no longer is willing to work with you, and you have nothing to lose by doing it. Either he's going to disappear (in which case you get nothing anyway) or he's going to file for bankruptcy protection (in which case you are only going to get pennies on the dollar anyway).

BTW excon, I was never against regulating interest rates. I happen to be in favor of regulating credit card rates. I so no reason that credit cards should be able to get away with things that banks are specifically prohibitted from doing. I want the credit card regulations (and the regulations for credit unions) to be the same as the regulations that banks have to observe. I happen to think that the usury laws in the USA, especially foir credit cards, are way too linient. This happens to be one the few areas where we are in agreement.

Elliot

[spitvenom]

That's not a very good Sr. Credit Analyst. And I speak as a senior credit analyst.

I have been doing defaulted loan workouts for years. The one thing you shouldn't be doing if you want to get paid back is to make it harder for your customers to pay you back. By decreasing the customer's cash flow through an increase in interest, you are making it almost a sure thing that you will be suffering a loss.

The best method to use is as follows:

1) Freeze the line of credit so that the borrower cannot borrow more under your line... limit the possible loss of principal.
2) Meet with the customer and detgermine what he can pay and how often, and work out a payment plan that doesn't completely drive him into bankruptcy.
3)WAIVE the pentalties and fees and higher interest rates as long as he continues to pay according to the new repayment plan.
4) Continue to maintain regular communication with the customer so that you can remain on top of his financial condition and know where you stand.
5) Only if after trying to work with the customer he is still not doing what he should to fix the situation should you then start to take legal action like filing suit in court, raise the interest rates and levey the fees. Because at that point, the customer no longer is willing to work with you, and you have nothing to lose by doing it. Either he's going to disappear (in which case you get nothing anyway) or he's going to file for bankruptcy protection (in which case you are only going to get pennies on the dollar anyway).

BTW excon, I was never against regulating interest rates. I happen to be in favor of regulating credit card rates. I so no reason that credit cards should be able to get away with things that banks are specifically prohibitted from doing. I want the credit card regulations (and the regulations for credit unions) to be the same as the regulations that banks have to observe. I happen to think that the usury laws in the USA, especially foir credit cards, are way too linient. This happens to be one the few areas where we are in agreement.

Elliot

Elliot why do they do this then? I do not know what Speech does for a living but I assume it is not banking. If an IT Geek (Me) and speech can see what needs to be done why don't the people who make the decisions and who are supposed to be the experts realize this? Is it greed? Is it just making their quarterly reports look good?

[speechlesstx]

I have been doing defaulted loan workouts for years. The one thing you shouldn't be doing if you want to get paid back is to make it harder for your customers to pay you back. By decreasing the customer's cash flow through an increase in interest, you are making it almost a sure thing that you will be suffering a loss.

All good points Elliot. That seems a no-brainer to me. The good news here is I'm not defaulted on anything and I don't need BOA. Maybe they think that since I do pay my bills well I can afford the increase. Who knows what those idiots think, in my dealings with BOA they seem to have a split personality and it's somewhat like dealing with car salesmen.

[ETWolverine]

Spit,

Because credit card execs don't take the advice of credit analysts. They see their industry as if it were under the same conditions as early 2007. They think that if they raise rates, they'll lose a few customers, they'll have to deal with a few delinquencies, but they'll see a 60% increase in credit card incomes.

What they are missing is the fact that their delinquencies won't increase just a little bit, but rather by a HUGE amount that will cripple those credit card companies. And they won't lose a few customers, they are going to lose their best customers in droves. The economic pressures are completely different from what they were 2 years ago, but the execs can't see that. Or they may see it, but they can't internalize it. They see the possibilities of profits, but they can't see the trap they are setting for themselves. And credit analysts in some back office earning $60K - $80K a year don't exactly have the ear of the President of B of A who is earning that about every two weeks or so. They don't live in the same worlds, and they don't talk to each other.

Elliot

[spitvenom]

Spit,

Because credit card execs don't take the advice of credit analysts. They see their industry as if it were under the same conditions as early 2007. They think that if they raise rates, they'll lose a few customers, they'll have to deal with a few delinquencies, but they'll see a 60% increase in credit card incomes.

What they are missing is the fact that their delinquencies won't increase just a little bit, but rather by a HUGE amount that will cripple those credit card companies. And they won't lose a few customers, they are going to lose their best customers in droves. The economic pressures are completely different from what they were 2 years ago, but the execs can't see that. Or they may see it, but they can't internalize it. They see the possibilities of profits, but they can't see the trap they are setting for themselves. And credit analysts in some back office earning $60K - $80K a year don't exactly have the ear of the President of B of A who is earning that about every two weeks or so. They don't live in the same worlds, and they don't talk to each other.

Elliot

That is what I thought is happening but I was hoping it wasn't. I have always had the attitude that you know (or at least should know) what you are getting into with a credit card. But I feel for people more in this climate because some people who always did the right thing are getting screwed for something that is not their fault.

[speechlesstx]

because some people who always did the right thing are getting screwed for something that is not their fault.

Exactly.

[spitvenom]

The movie Fight Club comes to mind in this mess. Minus the split personalities.

[speechlesstx]

Confirmed, credit card companies are expecting the good customers to subsidize the deadbeats thanks in part to the new credit card "reform" which will limit penalties on risky borrowers. Sounds vaguely like what happened with the housing industry, we're being penalized to help deadbeats pay their mortgages. I guess that's "social justice" for you.

[tomder55]

Yes that should stimulate consumer spending and confidence. Put that right up there with the new mileage standards and this idiotic cap and tax proposal going through Congress as some of the most a$$-backward ideas ever conceived to move the economy out of a downturn.

Still this is what he promised and we should not be surprised that he intendeds to go through with his plans. We were forewarned.