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April 13, 2009

Bailed-Out Banks Scrutinized for Raising Interest Rates and Fees
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Meanwhile, the Wall Street Journal reports the committee overseeing
federal banking bailout programs is investigating the lending practices
of institutions that received public funds, following a rash of
complaints about increases in interest rates and fees. Last week, Bank
of America told some customers that interest rates on their credit cards
will nearly double to about 14 percent. The bank is also imposing fees
of least $10 on a wide range of credit card transactions. Citigroup is
pushing new loans that carry annual interest rates of 30 percent, while
Wells Fargo is offering its own form of a payday loan that carry annual
interest rates of about 120 percent. Last year, US banks and savings
institutions collected nearly $40 billion in deposit account charges and
fees for everything from ATM usage to balance transfers. The fees
accounted for about 25 percent of the industry’s total revenue.



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