Town Hall Meeting Focuses on Harmful Banking Practices

SEIU Press Release

Distributed on   PRNewswire-USNewswire


BOSTON, March 19 -- As federal lawmakers debate legislation that would protect consumers from rising credit card interest rates, U.S. Representative Barney Frank and Massachusetts Attorney General Martha Coakley are taking part in a town hall meeting today to discuss the devastating impact of unfair banking and credit card practices on consumers and working families. Town hall participants will share stories about how they have been affected by banking issues ranging from rising ATM and overdraft fees on checking accounts to higher interest rates and unfair terms on credit cards. Others will be victims of the abusive subprime and predatory lending that is fueling Massachusetts' fasting-growing foreclosure crisis.

"As I was going through my divorce, I needed food and clothes and school supplies and I began to rely on my credit cards to get those things for myself and my son," says Denise Perrault, a mother and a graduate student at the University of Massachusetts who filed for bankruptcy after the interest rate increased on her credit cards. "At first I tried to work with the credit card companies on my payments but it got harder and harder to do. The average working person cannot possibly give the time and effort it takes to get a square deal from the credit card banks."

The widespread use of policies including universal default and risk-based re-pricing, among other practices that can leave working people with unexpected hikes in fees and interest rates have come under increasing fire recently amid mounting concerns of a looming economic recession. The impact of credit card debt in particular has been increasingly compared to the subprime mortgage loan crisis, most recently in BusinessWeek and Fortune ("The Consumer Crunch," Michael Mandel, BusinessWeek 11/26/2007; "The $915 Billion Bomb in Consumers' Wallets," Peter Gumbel, Fortune, 11/1/2007).

"I have always prided myself on paying my bills on time and handling my finances well--but in December of 2006, I received my first and only 'late payment' strike on my credit report from Bank of America," says Eileen Curtis, a retired social worker from Westborough, Massachusetts and mother of two. "I accepted the fact that I missed a payment--that was my responsibility. However, I became frustrated with Bank of America's never ending nickel-and-diming, and I have since closed all my accounts with them."

Today's gathering is jointly hosted by the Service Employees International Union (SEIU), the Massachusetts Public Interest Research Group (MassPIRG), and United for a Fair Economy and is the second in a series of town hall style discussions with lawmakers and consumer advocacy organizations planned nationwide to address banking issues.

In December, SEIU released a number of reform principles to hold the nation's biggest banks accountable to working families, including:
-- Basic standards for fees and interest rates on credit cards, bank accounts, and other bank products.
-- Greater community reinvestment standards--including providing bank branches and fair loan products for low-income and communities of color.
-- Stronger oversight of bank practices and better protections for consumers and working families at the national and state levels.
-- Limits on how big the biggest banks--and the reach of their harmful policies--can grow.

"Ensuring that widely-available and competitively-priced comprehensive banking services are offered to all of America's working families is a major responsibility of the Financial Services Committee," said Congressman Frank, chairman of the U.S. House of Representatives Financial Services Committee. "SEIU's statement of principles is a welcome reminder of the importance of that responsibility and underscores my belief that there remains work to be done."

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The Service Employees International Union (SEIU) is the fastest-growing labor union in North America, with 1.9 million members. Together with consumer advocacy organizations nationwide, we are working to hold big banks accountable to working families and our communities.

Service Employees International Union (SEIU), Washington, D.C.;