Poor Citibank. They can’t even do something green and ostensibly nice, without mucking it up. I guess that’s what you get when you have a reputation as a money hungry, morally bankrupt (and literally bankrupt were it not for taxpayers) corporation.
”Some angry neighbors have plastered new Citi Bike stations in Brooklyn with messages saying they amount to intrusive examples of “advertising” and “commercial activity.”
The Brooklyn blog Brownstoner released a photo Monday showing a Citi Bike bike-sharing station in Fort Greene that had been covered with sheets reading, “Residential landmark blocks are not for advertising or commercial activity!” along with the Citibank logo.
Yep. One of the biggest culprits in sending the global economy into the toilet and making you feel lucky if you can get a job as a Walmart greeter is going to mamanage to make a ton of money by leading a deal that was made possible by their own greed and incompetance:
“The U.S. Treasury Department picked Citigroup Inc. (C) and J.P. Morgan Chase & Co. (JPM) to sell the government’s $8.8 billion stake in General Motors Co. (GM).
Treasury will pay the banks just one cent per share sold for the government’s 300.1 million shares, according to the agreement posted on Treasury’s website.
Treasury announced in December that the government’s remaining stake in GM would be sold over the next year to 15 months.
Selling the shares will close out the government’s stake in the company, which was a result of the financial-crisis bailout, known as the Troubled Asset Relief Program.
Taxpayers invested about $50 billion in GM under TARP. The government sold part of its GM stake in a late-2010 initial public offering.
According to a not at all shocking report by the Wall Street Journal, executives at some of the biggest and most faily companies regularly get large sums of money JUST before their companies go belly up. Why?
“Financially ailing companies often pay bonuses and other compensation to executives, directors and private-equity owners in the months before filing for bankruptcy protection. Federal law restricts “retention” bonuses paid to such “insiders” after a bankruptcy case is filed but not before.”
And here’s the kicker rational. I hope you are sitting down and have nothing in your mouth.
“Companies often say they are using their best business judgment when paying bonuses to executives who are working overtime to keep operations afloat. A firm’s fate often isn’t known when bonuses are paid, and companies argue they must motivate some executives to stay lest they suffer exoduses that further destabilize troubled situations. “There are good people in troubled situations [who] are clearly going to be more recruitable than others,” said Peter Crist, chairman of executive-search firm Crist|Kolder Associates, but “if you give yourself a bonus and the outcome two weeks later was bankruptcy, that’s not good.”"
This is called pulling a “Dick Parsons” and it is totally legal.
Just because the election is over does not mean you can stop paying attention to their influence peddling. Check out this review of Citibank’s political spending over the last few years. During the run-up to the midterm’s in 2012 Daily Finance listed “The 10 Biggest Corporate Campaign Contributors in U.S. Politics”:
“3. Citigroup(C) — $27.5 millionThe second-biggest campaign contributor from the financial services sector, Citigroup has given more than $27 million to a fairly even slate of Democrat and Republican candidates. Its spending spiked in the 2008 election cycle, when it contributed almost $5 million to various candidates. Today, its contributions are way down.
Citi’s lobbying efforts are also declining from a high of more than $8 million in 2007. Thus far in 2010, it has spent just over $3 million. It has also spent locally. In 2010, three of its top five candidates were New York Democrats: Senators Charles Schumer and Kirsten Gillibrand and Representative Joseph Crowley.”
I am only surprised that Citi is only number 3! But it puts a Bill Moyers in proper perspective:
“Big banks are rewriting the rules of our economy to the exclusive benefit of their own bottom line. But how did our political and financial class shift the benefits of the economy to the very top, while saddling uswith greater debt and tearing new holes in the safety net? Bill Moyers talks with former Citigroup Chairman John Reed and former Senator Byron Dorgan to explore a momentous instance: how the late-90’s merger of Citicorp and Travelers Group – and a friendly Presidential pen — brought down the Glass-Steagall Act, a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. In effect, says Moyers, they “put the watchdog to sleep.”
There’s no clearer example of the collusion between government and corporate finance than the Citicorp-Travelers merger, which — thanks to the removal of Glass-Steagall — enabled the formation of the financial behemoth known as Citigroup. But even behemoths are vulnerable; when the meltdown hit, the bank cut more than 50,000 jobs, and the taxpayers shelled out more than $45 billion to save it.
Senator Dorgan tells Moyers, “If you were to rank big mistakes in the history of this country, that was one of the bigger ones because it has set back this country in a very significant way.”
Now, John Reed regrets his role in the affair, and says lifting the Glass-Steagall protections was a mistake. Given the 2008 meltdown, he’s surprised Wall Street still has so much power over Washington lawmakers.”
This week in Citibank’s terrible customer folklore, we have a slightly ranty and grudge holding (we approve) gentleman who describes his blog thusly:
The chronicles of an MBA student…actually, chronicles sounds way too serious. Let’s just call if a bunch of stuff that’s happened. (Oh yeah, some people may have found this because I was on Jeopardy. For any of the inside info on the whole Jeopardy thing, you can now purchase a detailed account at Amazon by searching for “How I Got on Jeopardy”. Don’t worry, it’s only 99 cents.)
There’s your free promo sir. Now, what does this MBA toting customer of Citibank have to be angry about? The usual:
“Ok, for those who don’t know, I keep an internal list of large corporations that have wronged me in some way. I’ve realized that complaining does absolutely nothing to solve problems (except for the potential opportunity to get free products/services from said companies, which just gives them another chance to screw up) so I just blacklist them from getting any of my money, forever.
Citibank, welcome to the blacklist. Take a seat between Enterprise Rent-a-Car and MetLife.
So why am I so pissed at these guys? Well, it all started when I moved out to Chicago.
After a couple of ATM withdrawls with my PNC bank card and some surcharges, I resolved to get a new bank account for spending money. I wanted to go with a national bank, someone with lots of ATMs, and I figured, a reasonably easy process. Citibank has an ATM in the basement of my building and one out at school, a natural fit right?
So I went online and signed up for a free checking account. No hassles, just some online forms and my initial deposit from my PNC account. I could expect to receive my new debit card in the mail soon.
Great right???
Well, so I got my debit card a little while later, and got all excited. Not only did I have a new ATM card (and would avoid fees) but I also got my Jeopardy prize check in the mail. All that money, and a new bank to put it in.
So I went to the nearest Citibank. Inserted my ATM card (which said it only needed to be put in an ATM to be activated) and had no problem depositing my Jeopardy monies.
Now just a quick withdrawl…
ERROR MESSAGE
Hmm…let’s try that again…
ERROR MESSAGE
What the hell??? I just deposited a ton of money with this card, but I can’t take out any money?
YOUR EMOTIONS ARE POINTLESS…ATMs DO NOT FEEL SYMPATHY”
In a non-shocking turn, Citibank and one of its harrassment/debt collection agents is getting sued for violating the Fair Debt Collection Practices Act (FDCA):
“Kelly Fosen filed suit against Rausch, Sturm, Israel, Enerson & Hornik and Citibank N.A. on Oct. 9 in the Eastern District of Texas, Sherman Division.
According to the lawsuit, Citibank sent Fosen a letter in December 2011 that discussed if Citibank could not contact her about the outstanding credit card loan they may file a lawsuit to collect a judgment. Citibank hired RSIEH to collect on the alleged debt. Under the federal laws, Fosen disputed the debt and requested validation with Citibank’s lawyers in Jan. 2012. She states she did not receive a response.”
Who or what is RSIEH? They are a law firm, to whom a ANOTHER law firm has a web page devoted, because they violate the FDCA so often! Continuing…
“In July 2012, RSIEH filed a lawsuit against Fosen in an attempt to collect the debt in the Justice Court of Collin County.”
Prepare to contain your shock…
“Fosen was never served with the petition. The case was dismissed without prejudice in August 2012.”
According to Business week, Vikram Pandit (aka “Bandit”), abruptly (but maybe unsurprsingly) turned in his walking papers, leaving Citibank to find a new CEO:
“Pandit walked into a job that made him the poster boy for the bank bailout, and in his tenure at Citibank was never able to shake the bailout stigma. In his first two years he worked for a token salary, he [meaning you] repaid the government (which completed its sale of Citi shares at the end of 2010) and brought most of Citigroup’s units back to profitability. Still, he could never shake the criticism that he was running one of the country’s losingest banks.
Pandit made some major mistakes in his tenure, like betting too heavily on the brokerage business with the Morgan Stanley Smith Barney (MS) joint venture. Still, the $4.7 billion charge-off Citi took on that was smaller than JPMorgan Chase’s (JPM) loss from one terrible derivatives bet.
Ultimately what made Pandit’s position particularly difficult is that the public made little distinction between the officials who led the banks into the crisis and those who were assigned to stumble their way out of it. In her recent book on the bailout, former federal regulator Sheila Bair called Pandit “Bob Rubin’s handpicked choice for CEO.” The new boss, in other words, was the same as the old boss.”
No kidding. And we think the next guy is going to be different how?
While I have not had the pleasure of being on the wrong end of a crecit card lawsuit, I have had the pleasure of telling a collection agency to get bent when I’ve received notices that I owed some sort of balance to some company I’ve never heard of, so this story was not surprising:
“Mel Newcomer’s client called, puzzled and angry.
The client was being sued by Citibank for nonpayment. There was just one problem: Citibank had the wrong guy.
Turns out, said Newcomer, a Lancaster attorney, someone with the same last name and first initial as his client had an account with the bank. But at no time, wrote Newcomer in his response to the lawsuit, had his client had a Citibank credit card; at no time had he ever received a bill from Citibank.
The case is still ongoing. But Newcomer, and other local attorneys who deal with debt collection cases involving credit cards, say the scenario is all too familiar.
The number of credit card debt collection lawsuits filed in Lancaster County has surged in recent years; the 1,184 cases filed in 2011 might be a record. According to courthouse records, 708 cases were filed here in the first eight months of 2012, an average of 88.5 cases per month.
The numbers mirror national trends; across the country, credit card lawsuits have soared as the economy has stumbled.
But attorneys and others who deal with these cases say there’s a problem: Many of the cases, like Newcomer’s, are rife with errors or an utter lack of documentation.
Attorneys who defend credit card cases say borrowers should definitely contest the cases in court. But most don’t.
‘Anecdotally, 85 to 90 percent of people who are sued do not defend,’ said James R. Leonard Jr., a Lancaster attorney who handles many credit card cases.
‘I think that’s what [the debt collectors] are looking for.’”
Gee. You think? But, there’s some good news and lesson from James Leonard, a Lancaster attorney:
“‘Especially after years of litigating, you’d think credit card companies would have their act together more,’ he said. ‘If they produce an account agreement [between the debtor and company] usually they just throw a generic boilerplate form at you, and you can’t tell if there’s any connection,’ if his clients have actually agreed to those specific conditions.
In particular, he said, debt collection companies that buy unpaid debt from credit card issuers tend to be thin on documentation. “They typically don’t have the records,” he said, and without the records, the case falls apart.
So next time you get some threatening mail, make sure it if it’s really your debt. If it’s truly not, wait for them to come after you before spending any money, but once they do, defend yourself!
I’d say hire this guy, but his production values leave me concerned:
According to Gawker, your student loan debt is fine, just fine:
“To briefly recap: America is currently in a student loan bubble, holding an unimaginably huge amount of student debt, as delinquency of loan payments swells, and even the well-off question whether they can affordcollege. It would seem, then, rather obvious that student loan debt is too big. Surprise: the people who control the higher education spigot—college admissions directors—disagree!
A new Inside Higher Ed survey of college admissions counselors of all sorts asked: What do you consider a “reasonable debt level” for a student to have, for four years in school? Fort two percent said $20k-$30k, and 17% said $30K-$40K, meaning that a vast majority of college admissions directors are perfectly comfortable with you coming out of their school with between $20k and $40K worth of debt.”
Keep in mind, you’d kind of freak out if you had $40k in credit card debt right? Don’t forget, it’s still a lot of money, despite the fact that there PLENTY of people with far more debt:
“Lauren Asher, president of the Institute for College Access and Success, and its Project on Student Debt, said that many interesting issues are raised by the admissions directors’ responses to the questions about debt and gapping. For instance, she said that there is no “rule of thumb” on how much debt is too much. But she said that the comfort level of a plurality of admissions directors with the current range may be problematic. Of the $20,000-$30,000 debt level for students, she said, “that will be O.K. for some students, but not for other students.” So much depends on a student’s educational plans, career plans, financial resources beyond loans, and various support networks.
Asher said she worried that various news reports of late about students with six-figure debt totals (a real, but very small share of the borrower population) may be “numbing people” to the reality that $25,000 in debt (far more common) can impose “real burdens,” and that those burdens can truly hurt some borrowers.”
Back in February, there was a tiny light at the end of the tunel for foreclosed homeowners:
“State and federal officials on Thursday will announce a landmark settlement with five of the nation’s banks over their flawed and fraudulent foreclosure practices.
The $26 billion deal, which officially will be unveiled at a 10 a.m. Department of Justice news conference, aims to help troubled borrowers by reducing the amount they owe on their mortgages, lowering their interest rates and paying restitution to homeowners who suffered mortgage-related abuses.”Well, $26 billion. Great! That should really help a lot of middle class families that lost their homes. So, where do these former homeowners stand now? According to firedoglake, on a big pile of nothing:
“A number of states have announced that they are sending out claim forms to foreclosure victims who are eligible for a one-time cash payment under the foreclosure fraud settlement. $1.5 billion has been earmarked for roughly 750,000 homeowners (depending on takeup) who were foreclosed upon between Jan. 1, 2008, and Dec. 31, 2011, by one of the Big Five servicers in the settlement (Bank of America, JPMorgan Chase, Wells Fargo, Citi and GMAC/Ally). The plan is to pay out the claims in mid-2013.
If this works and they get the target of 750,000 responses, then the payout will amount to $2,000 “sorry your home was stolen” checks. However, the challenge will come in actually finding these homeowners, who after all lost their home and experienced an upheaval in their lives. They may have left a forwarding address, and presumably that’s where these claim forms are being sent, but that doesn’t necessarily mean that the families still live there. Moreover, foreclosure victims may be wary of anything through the mail that has their old bank’s name on it and references their past foreclosure. Hopefully the packet doesn’t look like the bank going after them for a deficiency judgment.”
My, turning 26 billion dollars into 1.5 billion dollars. Well, it makes sense with Citibank involved, because nobody decreases value for consumers like they do.
The second-biggest campaign contributor from the financial services sector, Citigroup has given more than $27 million to a fairly even slate of Democrat and Republican candidates. Its spending spiked in the 2008 election cycle, when it contributed almost $5 million to various candidates. Today, its contributions are way down.
