79.9 percent rate targets credit-challenged

[demmiblue]

No, You're Reading That Right
79.9 percent rate targets credit-challenged
By BOB HANSEN
Updated 11:02 AM PDT, Thu, Oct 15, 2009


Gordon Hageman couldn’t believe the credit card offer he got in the mail.

"My first thought, it was a mistake," Hageman said.

The wine distributor called the number on the offer, gave them the offer code and verified his information. Sure enough, it was right: the pre-approved credit card came with a 79.9 percent APR.

---snip---

A spokesman with the Federal Deposit Insurance Corporation (FDIC) said interest rate limits on bank cards are set by the individual state and not on a federal level. According to information on the South Dakota Legislative Web site, there is "no maximum or usury restriction." In other words, the individual bank can set its own interest rate limits.

http://www.nbcsandiego.com/around-town/shopping/No-Youre-Reading-That-Right-64173667.html


I don't know if this was already posted (didn't see it)... outrageous :grr:!

[sharp_stick]

1. Next

the credit card companies will contract out to Vinnie the Bull to collect on late payments. I'm really surprised that kind of rate isn't illegal.

[Sal Minella]

4. I believe South Dakota is home to several credit card outfits and

we may be able to figure out why if we work at it a bit, here . . .

[myrna minx]

8. Frontline's "Secret History of the Credit Card" is an amazing doc.

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

[KamaAina]

16. An obscure Supreme Court decision opened the door to this

the Frontline doco cited above explains this.

http://en.wikipedia.org/wiki/Marquette_Nat._Bank_of_Minneapolis_v._First_of_Omaha_Service_Corp.#Aftermath

The decision attracted little notice at the time. Two years later, the possibilities it opened up became clearer when Citibank, squeezed by interest rate caps, decided to move its credit-card operations out of New York. The company persuaded Bill Janklow, then governor of South Dakota, whose agricultural economy was struggling at the time due to high fuel prices, to persuade that state's legislature to formally invite the bank there, as required by federal law before a national bank can do business from a state. He then successfully lobbied the legislators to pass a bill drafted by the bank that repealed the state's cap on interest rates, something a small group of legislators were already trying to do. Citibank quickly moved the 300 white-collar jobs in its credit-card division to Rapid City, where it has been ever since.

Shortly thereafter, Delaware would follow suit, building on its long tradition of offering shell homes for corporations.

Oh, and look who represented the original usurious card issuer:

http://en.wikipedia.org/wiki/Marquette_Nat._Bank_of_Minneapolis_v._First_of_Omaha_Service_Corp.#Fisher_v._First_of_Omaha_Service_Corp.

In Iowa, on August 30, 1978, the Iowa Supreme Court threw out the lower court decisions and ruled in favor of both Fisher and the attorney general. As a result, First National filed an appeal with the U.S. Supreme Court on September 11 and hired Robert H. Bork, to argue its Minnesota case before the justices.

[myrna minx]

19. Thanks for posting these links.

:hi:

[demmiblue]

17. Bookmarked! Thank you.

[myrna minx]

18. This will make your head spin.

:hi:

[Fire1]

7. You read my mind!!! LOL!!! Straight up GANGSTER!! LOL!!!! n/t

[demmiblue]

14. If they have any limbs left-over from the health insurance cabal.

[Sal Minella]

2. At least that beats the 3,000% PayDay Loan joints charge.

[depakid]

3. Thank Patty "usury" Murray and other fine Dems for this very foreseeable consequence

[closeupready]

11. Why? What was her role in this?

??

[depakid]

12. Voted against a very reasonable cap on credit card interest rates

in a bill earlier this year- one of several similar sell outs that prompted Durbin to note:

"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."

[liberalhistorian]

5. I sure wish I'd get one of these "offers". I'd have a lot of fun

telling them precisely what they could do with it and exactly how and why. There's a reason why many of us think the motto of our state, SD, should be "the loan shark state." And our Dem senator Johnson is deep in the pockets of the industry, so he's no help at all.

[FiveGoodMen]

6. God damn the congress that refused to outlaw this!

[inna]

10. +1.

my thoughts exactly.

on edit: and i don't even believe in god.

[inna]

9. IN-SANE in the membrane!

This is just CRAZY. What a corrupt country we have become.

:banghead:

:grr:

:argh:

[ecstatic]

13. Hopefully he turned the offer down! nt

[Xenotime]

15. Why don't they go after the wealthy. They can afford those rates.

What bullshit.

[gratuitous]

20. Fascinating, innit?

There are arguably about three verses in the Hebrew Testament that have to do with male homosexual behavior, and we have a national dialog about how and whether these apply to our society, that allegedly doesn't support a state religion. In the same Hebrew Testament, there are about 25 verses that forbid charging interest of any kind, under the rubric of "you shall not cheat your neighbor" (Lev. 8). But we have no national conversation whatsoever about that.

[hugo_from_TN]

21. Wow, I hope they're not forcing anyone into getting that card!!

[msaroff]

22. You have problem with Corporate Communist Capitalism©®™, comrade?

Seriously, for a lot of the finance types out there, this is a feature, not a bug.

[Enrique]

23. there's no national usury limit?

didn't we just have a big "reform" of credit card regulations?

[Nikki Stone1]

24. "There is no federal limit on the interest rate a credit card company can charge."

http://www.pbs.org/wgbh/pages/frontline/shows/credit/eight/

» There is no federal limit on the interest rate a credit card company can charge.

If you've ever looked at the return address on your statement, you may notice your credit card issuer is located in a state such as South Dakota or Delaware. That's because these are the states that have either weak or no "usury laws" meaning there is no cap on the interest rate that is charged. (View this map that shows the states where the top ten credit card issuers are located.) The federal government once had national usury laws that set a cap on the amount of interest that could be charged on a loan. But after the Great Depression, it repealed them and some states put no new usury laws in place. That's why Citibank, the issuer of Mastercard, moved to South Dakota, which has no cap on interest rates. (For more on the South Dakota story and how the credit card industry took off in the 1980s, read The Ascendancy of the Credit Card Industry.

[inna]

27. it's insane. can they charge 100%? what about 200%?? 500%???

» There is no federal limit on the interest rate a credit card company can charge.


:wtf:


:argh:

[LAGC]

25. Pay your credit card off every month and you have nothing to worry about.

If this allows people to get credit that otherwise couldn't get it, then I can see this as a service.

However, if they are specifically targeting those who probably will carry balances every month, then that's pretty slimy.

[LAGC]

26. Addendum.

I visited their web-site (First Premier Bank) just to see what kind of rate I might qualify for, and I noticed they were advertising only a 9.9% APR, but with a catch:

Account Set-up Fee: $29.00 (one-time fee)
Program Fee: $95.00 (one-time fee)
Annual Fee: $48.00
Monthly Servicing Fee: $84.00 Annually1
Additional Card Fee: $20.00 Annually per card, (if applicable)

FUCK THAT! You'd end up paying more in monthly service fees than you would have available on the fucking card!