You probably have never heard of Ann Minch of Red Bluff, Calif. For years, she was an ordinary middle-class American who lived a normal life. She went to work, paid her bills on time and loved her family. Her quiet, unremarkable life dramatically changed when she posted a video on YouTube on Sept. 8 denouncing banking executives as “evil, thieving bastards” and calling for “an American debtors’ revolution against the usury and plunder perpetrated by the banking elite.”
What makes a 46-year-old stepmother of two transform from dutiful citizen to firebrand revolutionary? The answer is simple: Despite being a loyal customer who never missed a payment, Ann’s credit card company, Bank of America, decided to raise her interest rates from 13 percent to 30 percent. The change was unfair and outrageous yet legal.
Ann’s webcam video, which has nearly 500,000 views on YouTube, has resonated because her story is shared by millions of other Americans who have seen their interest rates and fees hiked and their credit lines slashed, often with no reasonable explanation.
Ironically, many of these malicious changes may have been triggered by a bipartisan credit card bill that passed overwhelmingly in Congress and was signed by President Barack Obama in May. The legislation was meant to protect consumers by ending predatory lending practices and helping households get out of debt faster. The new law bans hidden fees such as those charged when paying over the phone, mandates that companies provide 45 days’ notice when they change the terms on your card and give consumers 21 days to pay their bill, rules out interest rate increases in the first year and creates new protections for cardholders below the age of 21. The financial services industry was united in their opposition to any of the changes.
Since most of the law’s provisions will not come into effect until February 2010, credit card companies are scrambling now to implement changes while they can. This is more disgraceful and despicable behavior from an industry that continues to post enormous profits and pay lavish bonuses to its executives despite requiring a $700 billion bailout from the federal government a year ago.
These changes will hit students particularly hard. According to a report released by Sallie Mae, the average college student has more than $3,150 in debt and half have at least four credit cards. As interest rates and minimum payments increase, students who already face severe budgetary constraints will be at a further, greater risk to fall deeper into debt or permanently damage their credit scores.
This behavior is unethical and unacceptable, and every credit card holder should be outraged. It is one thing to be incensed at JPMorgan Chase’s $3.6 billion in quarterly profit or irritated at the bank bailout that hasn’t translated into more lending. But when the banks unilaterally punish honest customers and refuse to treat them justly and with a modicum of respect, a line has been crossed. An industry that owes its continued survival to the generosity of American taxpayers should not betray the trust of the people.
It is time to stage a debtors’ revolt. Demand better treatment or refuse to pay. Withdraw your money and put it into community banks.
Enough is enough.
Matt Verghese is a graduate student in public policy. He can be reached at verghese at umdbk dot com.