Good after bad.

Don’t know if you have credit cards with major TARP-rescued banks. I certainly do, and this week I received a notice from one of them telling me that they were summarily changing the terms of my credit agreement. In essence, they said they were raising the interest rate on my card to 23%. Yes, that’s right – 23% on a balance well below my credit limit, on a card I’ve had for at least a decade without missing a payment. You don’t seem surprised. Perhaps they’ve done the same to you… and, in fact, they are doing the same to everyone, as far as I know. It seems CitiGroup, the recipient of $45 billion in publicly funded bailout dollars, has settled on a business model that empties the pockets of American taxpayers a second time. Charging 23% and more on credit in an economic environment such as this, when people are losing their jobs, their homes, their shoes, for chrissake… and when institutions like Citi are drawing money from the Federal Reserve lending window at 0% to 0.25% interest. So… I guess when they’re earning less than 20% on your ass, you’re considered a non-performing asset.

Okay, so that’s one screw job. Not surprising that they would attempt to get all of their rate hikes in place before the consumer protection law goes into effect. Law of the jungle, right? Still… our government has a bit of leverage over these guys. Last I looked, we were the equivalent of major shareholders. And last I looked, CitiGroup’s executives were still making a pretty penny (top execs getting an average of $18.2 million – not bad). If this isn’t a case when pressure should be brought to bear, I don’t know what is. And lest this seems as though I’m just complaining about my own situation, I should say that this is not killing me – it’s people whose mortgages are underwater, whose kids are in college, whose jobs are on the chopping block… I mean, those folks really worry me. And if they’ve got a Citi card that’s shooting up to 23 or 29% and a JPMorgan Chase card that’s rifling 5% minimum payments out of them, they’ve got a problem.

Of course, it goes beyond that. The banking sector is making life impossible for people’s employers, as well. It’s making it hard to get credit for capital expansion. It’s tightening up on educational loans, scrutinizing the financial profile of colleges and universities to a more stringent degree than even the Department of Education uses. It’s lobbying hard against its own regulation, particularly the proposed Consumer Protection agency. So it seems like we need to severely limit these people’s ambitions, instead of acting as though everything is still the way it was three or four years ago when nothing could ever go wrong, ever. Meanwhile, there seems to be no limit on the amount of money we can borrow to burn pointlessly (and, in fact, profoundly counterproductively) in Iraq and Afghanistan, year after year. It almost seems as though Obama is beginning to see the handwriting on the wall with respect to the latter war. I wonder when he’ll see it with respect to these rapacious financial institutions.