The Secret History of the Credit Card Essay

Background. Grant Thornton LLP v. FDIC, took place in West Virginia District Court in 2004. We are here today as a result of the appeal filed by Grant Thornton. In asserting for the OCC, we will prove why Grant Thornton is responsible for not acting in accordance with the laws and regulations designed for independent financial institutions while conducting an audit for the First National Bank of Keystone. The OCC is an independent bureau of the U.S. Department of Treasury that is responsible for supervising all national banks and federal savings associations, including federal branches and agencies of foreign banks (Office of the Comptroller of the Currency, 2015). The First National Bank of Keystone was incorporated in 1904 in Keystone, West Virginia. Keystone Bank was a member of

Despite the suspicious by many Americans back then that banks have an inherent nature to serve the wealthy elite over the common people, there was an underlying agreement stretching

In 1816, the 2nd National Bank of the United States was chartered by Congress, establishing a branch in Maryland. In trying to protect local business and claiming the unconstitutional chartering of the National Bank, (?????as a direct response????), the state of Maryland passed legislation to impose a tax on all banks not chartered within the state (the Bank of the United States was the only bank that qualified). However, McCulloch, the cashier of BUS’ Baltimore branch, refused to pay this tax and was sued by the state. McCulloch lost in county court and the decision was reaffirmed by the appellate court.

Wells Fargo fired 5300 employees. The employees took millions in fees by regularly opening new

As competition increased between savings and loans, banks, and credit unions, banks were eager to attract loan applicants in order to increase revenue and compete with other financial institutions. Jack S. Light, the author of Increasing Competition between Financial Institutions, said in his book that “commercial banks are diversifying their assets toward higher percentages of mortgages and consumer loans, and thrift institutions are seeking authority to diversify their loan structures. Moreover, mounting pressures are working toward, and have partially succeeded in, changing the authority of thrifts to include third-party payment accounts similar to commercial bank demand deposits.” (Light) Because of this eagerness to bring in new clients, they were willing to give out loans without checking into the financial stability of the borrower or the business that was requesting the loan. Unfortunately since the banks didn 't look into their clients’ financials adequately, many clients defaulted on their loans because they could not afford the payments, especially when balloon payments started.

Before the advent of the Federal Deposit Insurance Corporation (FDIC) in 1933 and the general conception of government safety nets, the United States banking industry was quite different than it is today. Depositors assumed substantial default risk and even the slightest changes in consumer confidence could result in complete turmoil within the banking world. In addition, bank managers had almost complete discretion over operations. However, today the financial system is among the most heavily government- regulated sectors of the U.S. economy. This drastic change in public policy resulted directly from the industry’s numerous pre-regulatory failures and major disruptions that produced severe economic and social

Wells, Fargo & Co. came into America in the age of economic boom and westward expansion, and

Hello Cassaundra, thanks your posting nevertheless, the information into processes applied by Delta Community Credit Union. Their operation process strategy planning and campaigning to educated consumers that they can have no monthly banking fees, lower interest rates on loans was marvelous. The operation process seems to have empower many other consumers to join Delta Community Credit Union for only five dollars. Delta Community Credit Union strategy planning for greater customer services was on point validated with the article, thus, “2014 suggest that a significant percentage of consumers left “big banks” due to feelings of distrust and lack of service, per (Epperson, 2014).” I feel they made the right decisions, subsequently, because

Wells Fargo is a public trading company that was formed in the year 1852 by Henry Wells and William Fargo. The company transcended from a service that transported from a fright from the East Coast to mining camps throughout California during the California Gold Rush old rush in the 1800s (APA, Wells Fargo). At Wells Fargo’s inception it focused on offering banking solutions to the people of California with an established mission and principles that has enshrined in its culture and values that are geared towards the company vision that states “we want to satisfy our customers financial needs and help them succeed financially.” (APA – Wells Fargo VV)

In 1968 there was concern dealing with the treatment of consumer lending and the real rates (cost) of credit with lending institutions. This concern lead to the federal government creating the Truth in Lending Act (TILA). The Truth in Lending Act makes lenders reveal the terms dealing with the loan in a clear and concise manner. This way the public can determine which company and interest rate works best for them. Stemming from the truth in lending act originates Regulation Z, which is like the truth in lending act. Regulation Z forces lending institutions to provide the amount of money that was loaned, along with the interest rate, APR, fees of the loan, and charges for the terms of the loan in a clear and easy to understand manner.

I have decided to research JP Morgan Chase as my top firm to write about. My decision to write about Chase was because I have an account with this company. American banking was a small-scale affair before the 198o’s and nationally charted banks were limited as well (Larson, 2010). Economies of scale are known as savings that companies enjoy when they become larger and produce more output (Larson, 2010). A variety of technological factors constitute a third force contributing to economies of scale (Thomas & Maurice, 2010).

Whilst a critical part of consumer spending, credit card companies are constantly accused of malicious legal contracts and schemes to increase profits. Without heavy regulation, these companies have the power to bankrupt millions of Americans that rely on credit cards in their daily lives. However, after the introduction of The Credit Card Act of 2009, these accusations represent an inability to accept responsibility for financial blunders on the consumer’s behalf. Due largely in part to the government’s strict regulations, credit card companies should not be at fault for the student credit card debt crisis. Credit card companies remain blameless for student credit card debt as a result of

In May 2009, President Obama stated, “The credit card act was intended to uphold basic standards of fairness, transparency, and accountability (Lindow).” Is this to say that credit card companies were deliberately deceiving consumers to capitalize on profits? Unfortunately, the answer is yes: profit was not the concern of this act, as the banks had abnormally high profit margins. What was in question, however, was the approach of generating these favorable profits for banks (Warren). The Credit Card act provides protection for young consumers with specific provisions such as: fix interest rates, 21 day grace period, the right to opt out of adverse changes in terms, a 21 year age requirement and clearer agreements for transparency.

Since 1852, when Henry Wells and William Fargo founded the company, it has always had the main focus on its customers. Originally, the idea set aside this financial institution from the rest was the determination with the Pony Express and the classic stagecoaches to allow express banking. “Wells Fargo earned a reputation of trust by dealing rapidly and responsibly with people’s money” (Wells Fargo, 2017). The bank began to grow rapidly throughout the years and took on the motto “Ocean to Ocean”, it was a this time the stagecoaches began traveling miles and miles in order to deliver their customers banking needs in a timely manner. However, by the time the Great Depression hit, the bank unfortunately lost all their business and resorted back to their original stomping grounds in San Francisco. It wasn’t until during this time, the Wells Fargo stagecoach became a symbolic icon in the Hollywood western films. By taking on this credibility in the films, it provided a leverage for the company to come back and take back their “Ocean to Ocean” title. “New banking concepts not only changed where people banked, but how they banked. Drive-up tellers,

The banking industry is highly competitive. The financial services industry has beenaround for hundreds of years and just about everyone who needs banking servicesalready has them. Because of this, banks must attempt to lure clients away fromcompetitor banks. They do this by offering lower financing, preferred rates andinvestment services. The banking sector is in a race to see who can offer both the