Eugene Robert Zarwell
PMB 98 1153 Rt. 3 North
Gambrills, MD 21054
410 258-5064
Tuesday, August 21, 2001
Emory Wayne Rushton, Senior Deputy Comptroller
Office of Comptroller of the Currency
Independence Square
250 E Street
Washington, D.C. 20219-0001
Dear Mr. Rushton;
Recently, I learned about several issues affecting consumers that need to be visited by the appropriate authorities.
It amounts to legal thievery by the nations largest banks. Although they all claim disclosure, the print is sized less than that used by the bureau of engraving to identify
Presidents on paper currencies.
The practice of using psychological deception to defraud consumers has to stop. It is
beyond any form of legitimacy, credibility, responsibility and accountability to consumers who have an inherent trust in the banking industry only to be bilked by their tactics of greed.
I refer to the policy of charging higher than normal interest fees for cash advances from credit accounts and not crediting payments to
that high level interest until all purchases are covered. To the naïve, this means that banks can reap more than one thousand times the cash advance in interest by withholding
repayments for the life of the account. For some this can be 5-10 years of interest for a $10 cash advance taken out as a balance transfer from one bank to another.
Fair is fair, but gouging has been illegal for years. How is it that it is legal now!
Another practice to be challenged is that practice of assessing overlimit charges to accounts that as they approach maximum limits
receive over cost authorizations placed on the accounts by Hotels and automatic card readers at the gas pump. This practice can penalize cardholders by approximately $30 each time
they buy products while not knowing their card is maxed out. The banks automatically authorize those purchases without notifying the cardholder that it will exceed their limit.
How fair is a discretionary charge when the bank exceeds the limit with its overcharges and then seeks immediate remedial penalties of more than $30. Consumers again trust the
banks to alert them through the card reader that “this charge may exceed your credit limit and penalty fees could be imposed”. It will probably give consumers as much a break as
did the recent tax rebate. Why should the banks have the right to impose penalties on transactions that they can approve without notifying consumers?
How did this one get through the regulators?
And finally, debit cards need to be guaranteed safe from fraudulent use by card thieves. If
you can hang a horse thief, shoot a cattle rustler; kill a poacher, then why can debit card fraud be free from penalties. If the banks don’t have the security set up to stop a debit
fraud then perhaps they should pay the loss. Bank of America certainly hides behind their immunity to debit card fraud and in fact fails to notify consumers as it happens and
penalizes them for overdrafts it causes by force closing the accounts. There are many ways to identify a fraudulent transaction. If the US
banks aren’t safe for your deposits and transactions - where can you go – certainly not the government. I tried that one!
The challenge gentlemen and ladies is to fix these in favor of the consumer, or lose the credibility of your ploy to foreign banks.
Respectfully,
Gene Zarwell
Frank Torres
Consumer Advisory Council
Board of Governors, Federal Reserve
20th Street and Constitutional Avenue, NW
Washington D.C. 20551
Mr. Kenneth Lewis, Chairman and CEO
Bank of America
Fulfillment Center
P.O. Box 798
Wichita, KS 67201