Wells Fargo got caught ripping off millions of customers by setting up fake accounts in their names, then billing them for "services" related to those accounts, sometimes tanking their credit-ratings, costing them jobs, even their houses -- but the company says you're not allowed to sue them because their employees fraudulently signed your name to a "binding arbitration" agreement that forces you to take your case to a fake judge whose salary they pay. Read the rest
A prepaid debit card company's lobbying efforts in Washington are paying off. Congressional Republicans are seeking to repeal limits to the amount banks can charge customers in overdraft fees. The company is Total System Services, and it stands to make tens of millions of dollars when the GOP starts letting it charge exorbitant overdraft fees. And Total System Services only had to spend $270,000 to make the GOP do its bidding. What a great investment!
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Last week, Georgia Republican Sen. David Perdue introduced a resolution in Congress, alongside other Republicans including his fellow Georgian Johnny Isakson, to throw out a new package of rules for the prepaid debit card industry.
The rules, finalized by the Consumer Financial Protection Bureau in October, include limitations on overdraft fees, which have become a significant source of consumer complaints about the financial industry — and an important revenue stream for Georgia-based financial firm Total System Services, whose NetSpend unit is the country’s largest manager of prepaid cards, according to a 2015 financial filing.
The vast majority of prepaid debit cards don’t come with overdraft fees, but NetSpend’s do, and the fees accounted for 10-12% of its overall revenue in 2016, or $80-85 million, the company told investors in October. Its parent has spent big on lobbying and political donations in a bid to kill the rules: in the last three months of 2016 alone, it spent some $270,000 lobbying Congress.
The company’s political action committee has also given its home-state senators Perdue and Isakson $37,500 in campaign contributions since 2010, according to data from the Center for Responsive Politics.