Let's say you have a credit card balance of $3000, and your monthly minimum payment on the balance is $100.
Your bank requires you to get your payment to them by the 15th of each month.
You make your minimum payment and it arrives at the bank on the 14th. But some genius at the bank has come up with a scheme that makes it so your payment does not post at the bank for three days.
So your payment posts on the 17th, even though you got it there by the 14th.
According to the contract, you are two days late and therefore subject to a late fee of $25.
That late fee is subtracted from your $100 and that means only $75 is posted to your balance.
Since your balance requires a minimum of $100, and you posted only $75 to your balance, you get an additional fee for not paying the mimimum balance. That fee is $35, which is added to your balance.
This actually happens. There are assholes at the banks who thought up this kind of scheme. It even has a name: fee pyramiding.
And it is illegal.
Banks are notorious for fee pyramiding. State attorneys general tried to go after the banks for fee pyramiding.
But whenever a state attorney general would go after a bank, that state attorney general would get a call from the Office of the Comptroller General (OCC) telling them to cease and desist. As a federal agency, the OCC had eminent domain over the bad deeds being done by banks.
So the state AGs had to sit on their hands and wait for the OCC to do something about fee pyramiding.
Except the OCC did nothing about fee pyramiding.
It is easier for a credit card company to capture a single federal agency than it is for that company to capture 50 state attorneys general, see. And the OCC is completely captured.
There were many other scams credit card companies were pulling on their customers, and the OCC was doing nothing.
Someone like Elizabeth Warren was committed to doing something about these kind of fraudulent activities. She was going to punish the credit card companies, as they certainly deserved to be punished.
But the GOP did not want Elizabeth Warren having the power to punish the banks. They wanted her power diluted by a raft of political appointees from both parties so that nothing would ever get done, since both parties can't even agree which direction the sun rises each day.
The banks were gleeful to see the GOP tie up the CFPB creation and appointing of a singular director. Just...gleeful.
We clearly need someone to stop financial institutions from illegally transferring wealth from the consumers into their pockets. Clearly.
So Warren was made out to be the stoic heroine and martyr. "At least I tried."
But then it all went to her head, and she began expressing her deeply liberal thoughts out loud. Thoughts that said
no one got rich alone. Thoughts that said the factory owner got rich because of the roads and infrastructure and so forth, and therefore the factory owner should have to pay for however much Elizabeth Warren decided was "fair" for the owner to pay.
And thus it turns out that Warren is just as big a partisan hack as everyone else.
What does that mean in the context of credit card companies, you may be wondering.
Okay.
I gave an example above of a credit card holder being preyed upon. No sane person would argue the credit card holder is culpable in such a case. The credit card holder is a victim of a crime.
But let's take the case of a person who signs up for a credit card that has 19 percent interest and a $15,000 credit limit. And then this person goes to Disney World and buys a boat and some jewelry and goes on a Best Buy binge, and they eventually max out their credit card.
This person then finds it impossible to make their minimum payments.
Someone like Elizabeth Warren believes the credit card company somehow tricked or brainwashed that person into maxing out their credit card. Some like Warren believes the credit card company should not have given that person a $15,000 limit and should be penalized for doing so.
People like Elizabeth Warren believe consumers are child-like or mildly retarded and must be protected by the wiser beings like Elizabeth Warren.
The partisan hacks in the GOP stopped the partisan hack Elizabeth Warren. This is a case of being right for all the wrong reasons.
We still need a powerful person who is able to stop criminal activities like fee pyramiding.
NO ONE is holding the banks accountable. And we must not allow our focus to be removed from that reality by the reindeer games of the hacks.
The banks would love for all of us to lose focus. They are counting on it and working overtime to make us forget.
