Thursday, April 09, 2009

From the WTF File:
Wells Fargo Posts Record 1st Quarter Profit

Wells Fargo Bank, which took $3 billion in government TARP money just a few months ago just posted a record profit for the first quarter.

This might just be a foretaste of huge profits by banks that aren't complete basket cases. The spread between what banks pay for money and the interest they charge is near an all time high. While credit card defaults are going up and now around 10%, the fact is, credit card issuers are wellcompensated for this risk when they can borrow money in the low single digits, charge their low-risk customers 14%, their high risk customers 22%, and their late customers 36%. That's not to mention the late fees & over limit fees and other outrageous practices.

Outrage at banking practices may be high enough now for credit card reform legislation to finally make its way through Congress. Perhaps we can say goodbye to universal default clauses, two-cycle billing,

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