The Federal Deposit Insurance Corporation (FDIC) In Need Of Shoring Up
The FDIC, the federal agency that insurers depositors funds in checking, money market and savings accounts, is experiencing a serious in funds. As a result of the increased bank failures the insurance fund has fallen $4 billion dollars since December 2008. A total of 36 banks have closed so far this year. In 2008 four banks had closed by June, the mid-year mark. Another 305 U.S. banks have their names on the federal governments “problem list” per a Federal Deposit Insurance Corporation (FDIC) report recently released. Banks’ rate of defaults is at 3.76% on current loans which is the highest it has been since the second quarter of 1991. The currently solvent banks are making a one-time fee intended to shore up the FDIC fund by $5.6 billion. They are doing this in their own best interest as consumer confidence is at an all time low in the financial industry as a whole.
Individuals Suing Major Credit Card Companies Are Winning
The tide has changed and the credit card companies open frontier is being swept away by the current bitter public opinion against them. A landmark ruling by the federal appeals court requiring the huge financial service corporation, Chase Bank, has to clearly disclose that it can, and will, raise the annual percentage rates for cardholders based on current credit risk. The 9th U.S. Court of Appeals sided with a couple that sued Chase Bank for violating the Truth in Lending Act, reversing a lower court dismissal of the suit. The couple’s annual percentage rate on their credit card debit nearly tripled when it went from 9% to more than 24% after Chase Bank deemed they had become a higher credit risk due to the number of credit accounts the couple had recently opened. As amazing as that may sound almost every credit card company has written the acceptance contract stating they reserve the right to raise the percentage rate at their own discretion. Judge Diarmuid O’Scannlain said Chase Bank had a duty to “clearly and conspicuously” disclose that rates could change “for any reason at all”. The tide has turned from “buyers beware”!
CEO’s of Credit and Financial Services Facing SEC Scrutiny
With Securities and Exchange Commission’s recent attention to the CEO’s of the mega-corporations lack of moral responsibility to the stockholders in particular and the public welfare in general. The Chief Executive Officers in every bank and credit and financial services sectors are going to be moving very cautiously from here on out. The latest CEO facing SEC scrutiny is Angelo Mozilo, the former Chief Executive of mortgage lender Countrywide Financial Corp. Illegal insider trading and failing to disclose significant information to Country-wide shareholders, charges are likely to darken Mozilo’s future. A formal decision to file charges will not come until after a customary opportunity given to individuals to make a case that why the charges should not be made but with the current sentiment towards the financial services mismanagement by utives the case will have to be strong to forestall charges
Coastal Credit Solutions, Inc. operates a financial market place that matches Consumers and Businesses with debt eliminating and/or alternative financing service providers. If you have over $5,000 personal or business credit card debt or are seeking small business financing, please call us 866-205-8370 for a FREE no obligation consultation.
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