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Discount Rate For Banks: 0%; Discount Rate For The "Rest Of US": 400%; For Everything Else There's TaxpayerCard

Tyler Durden's picture


When your local friendly Too-Big-To-Fail bank needs a 'helping hand' loan to get through pay-day or buy some extra S&P futures, it picks up the shiny red phone and asks Ben for unlimited access to free money. When the 'rest of us' need a little extra - to get through the next week before our pay-check hits, we call this guy - who charges a 400% APR. The Central Bank Discount Window - Priceless.

What is perhaps most notable that no matter how much the CNBC anchors tried to corner this gentleman into admitting his vig is a little rich, the bottom line is that his services are in demand, and by a customer that has a far higher annual household income that we would have expected... once again the 'middle-class' is hurting to maintain any standard of living.




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Fri, 08/24/2012 - 17:32 | 2735466 Ahmeexnal
Ahmeexnal's picture

Hope and Change!

Fri, 08/24/2012 - 17:52 | 2735525 pirea
pirea's picture

Hope and Charge!

Fri, 08/24/2012 - 18:44 | 2735683 Tijuana Donkey Show
Tijuana Donkey Show's picture

I'm hoping for some change, silver change.....

Sat, 08/25/2012 - 14:59 | 2737379 Stackers
Stackers's picture

Obama Secret Service code name: Mastercharge

Fri, 08/24/2012 - 18:12 | 2735587 smlbizman
smlbizman's picture

how about the sap that takes a loan to pay a loan to take a loan to pay a loan...hmmmm, were have i heard this finance model before?...oh i get it, its ok if your a sophisticated customer like the u.s.a...who knows what they're doing..

Fri, 08/24/2012 - 17:36 | 2735480 JohnKozac
JohnKozac's picture

I'm going to 'unfriend' Ben....I don't want to see him on my FB page anymore.


Fri, 08/24/2012 - 17:38 | 2735482 malikai
malikai's picture

I saw ads for some of those things on the tube here in London. The effective rates were 1100%!

Fri, 08/24/2012 - 18:47 | 2735693 smiler03
smiler03's picture

There's a UK company called "Wonga" which advertises a LOT on TV.

From their website...

"Our flexible, short term service comes with a Representative APR of 4214%, but bear in mind that the loan duration is only up to a month. We provide short term loans and APR is an industry standard calculation that looks at annual repayment costs. We don't actually charge thousands of percent in interest!"

Fri, 08/24/2012 - 18:48 | 2735698 Matt
Matt's picture

It is more cost effective to default on a payday loan and pay the maximum interest rate then to keep paying it off every two weeks and re-borrow it, since most of the money is in fees rather than in the actual interest rate.

Fri, 08/24/2012 - 17:39 | 2735483 fonzannoon
fonzannoon's picture

"A credit union that will only charge 18%".....

Geez we need to bring back the mafia I think they were cheaper.

Fri, 08/24/2012 - 17:43 | 2735501 LMAOLORI
LMAOLORI's picture




Pretty funny I was watching the Untouchables they had an episode about the Mob running a lottery and now look who runs the lottery

Fri, 08/24/2012 - 18:50 | 2735708 rayduh4life
rayduh4life's picture

Around here, it's the gypsys - $2,000 fo 2 weeks for 50 bucks.  Sounds cheap by compartson.

Fri, 08/24/2012 - 17:39 | 2735485 Xibalba
Xibalba's picture

Banksters are pissed that they are not the end all be all??

Fri, 08/24/2012 - 17:39 | 2735487 Slightly Insane
Slightly Insane's picture

I'ld rather deal with the "Goombalooch" ..... i.e. the mafia for a loan.  In fact I would rather have the Mafia take over for the current administration, as I know the "guys" would take care of all these shenanighans.  My effective tax rate would be far less, everyone in the neighborhood would be taken care of, the "gang banger's", well they'ld get their one warning, and everything would be good.  Unemployment would be 1-2%, and "unemployment insurance" would be "un-necessary"...... same for every other type of "insurance".   These "guys" would at least respect "property rights" and the "politicians" would be effectively "nullified". 

Fri, 08/24/2012 - 17:57 | 2735541 chet
chet's picture

The mob would respect your property rights?

Fri, 08/24/2012 - 20:45 | 2735964 laomei
laomei's picture

At least when the mob taxes you for protection, they generally live up to their end of the deal

Fri, 08/24/2012 - 17:40 | 2735490 Agent P
Agent P's picture

It never ceases to amaze me how much money can be taken from people who have none to begin with. 

Fri, 08/24/2012 - 17:59 | 2735550 trebuchet
trebuchet's picture

This is so true and yet so sad... history of human race since money and power began.



Fri, 08/24/2012 - 17:47 | 2735491 LMAOLORI
LMAOLORI's picture



An informed citizenry is a wise citizenry


The Trouble With Democrats




American Usury


One of the fundamental issues that party managers wished to avoid was the scandal of American usury. Usury is the ancient sin of charging inflated interest rates sure to ruin the borrowers. It is considered immoral by Judaism, Christianity and Islam because usury involves the powerful using their wealth to ensnare weak and defenseless borrowers. The classic usurer offers an impossible choice that debtors cannot easily refuse. If they reject the terms of the loan, they will not be able to pay the rent or buy necessities. If they accept the usurious interest rates, their debts will accumulate until they are bankrupted (at which point the creditors claim their property). No civilized society can endure in such conditions.

Usury used to be illegal in the United States but it was "decriminalized" in 1980--the dawn of financial deregulation. A Democratic president and Congress repealed all interest-rate controls and the federal law prohibiting usury. Thirty years later, American society is permeated with usurious practices--credit cards charging 30 percent and higher, subprime mortgages and other forms of predatory lending, the notorious "payday" loans that charge desperate working people an effective interest rate of 500 percent or more. Businesses, especially smaller firms, are also prey to usury in less direct ways.

in full


Fri, 08/24/2012 - 18:36 | 2735661 silverserfer
silverserfer's picture

no it wasnt Jimmy Carter that pushed usuary on this country.  Your beloved catolic church changed from being a sin to being allowed. It has been abused by BANKERS ever since.


Fri, 08/24/2012 - 20:20 | 2735919 Bendromeda Strain
Bendromeda Strain's picture

Nice deception, except the article in question was published by The Nation, which means it wasn't a hit piece. Just because you didn't like what it said doesn't change that fact. If you had started your rebuttal with anything but "No, it wasn't" (fixed your semi-literate punctuation for you - you're welcome) then you might have some traction. Having said that, as Denninger the Nazi chihuahua has pointed out many times, the Catholic Church has backslidden on numerous fronts, support for usury and EMTALA (state charity) being two.

Fri, 08/24/2012 - 17:44 | 2735493 holdbuysell
holdbuysell's picture

Sheezus...that guy really earned his $200 in that hotbox. He actually did a good job and came across credible and well-informed with defensible data, including from actual banks who also charge a kajillion percent APR on overdraft time let's have those questions presented to Moynihan and Dimon and see how they do in such a hotbox.

Fri, 08/24/2012 - 20:18 | 2735926 Bendromeda Strain
Bendromeda Strain's picture


next time let's have those questions presented to Moynihan and Dimon and see how they do in such a hotbox.

No problem. They will be ably represented by Nathan Thurm, Esq.

Fri, 08/24/2012 - 17:41 | 2735496 Raymond K Hessel
Raymond K Hessel's picture

The Konsumer Federation declares war on Tuubigtufale.  


STupid.  36%?  How was that put together?  35% is okay. 37% no fucking way!

Just take responsibility for yourself.  Honestly.

Fri, 08/24/2012 - 17:48 | 2735513 Gromit
Gromit's picture

Kinda interesting how South Dakota has won the credit card business.

Their usury laws are very attractive for the banks!



Fri, 08/24/2012 - 20:21 | 2735929 Bendromeda Strain
Bendromeda Strain's picture

Delaware is planning to declare war. General Biden will lead the charge.

Fri, 08/24/2012 - 17:54 | 2735529 Rainman
Rainman's picture

Sheez....there's literally a scheme in place to fuck you from cradle to grave.

Doncha love the ongoing criminal enterprise called capitalizm !?

Fri, 08/24/2012 - 20:22 | 2735934 AlphaDawg
AlphaDawg's picture

tbtf is not capitalism, 'tis facism dude

Sun, 08/26/2012 - 05:52 | 2738171 MalthusWasRight
MalthusWasRight's picture

A rose is a rose is a rose...

Fri, 08/24/2012 - 17:54 | 2735535 Count de Money
Count de Money's picture

I watched this interview and saw how CNBC hacks were trying to spin the discussion. The typical attitude of these talking heads is that the rubes in the sticks are too stupid to figure this out for themselves.

The alternatives don't look much better. I have an checking account with an overdraft line. It used to be that if I wrote a check for $100 and had only $99 in the account, the bank would loan me the $1 and charge interest by the day until I paid it back. A few years back, I noticed that they changed the policy. Instead of the earlier example, they would leave the $99 in the account (at no interest) and advance me $100 from the overdraft and charge interest on that. Then they added a $10 fee for just touching the overdraft. Try figuring out an APR on that.

Fri, 08/24/2012 - 18:46 | 2735690 Tijuana Donkey Show
Tijuana Donkey Show's picture

APR - Another Penis in Rectum. 

Fri, 08/24/2012 - 17:56 | 2735537 pamplona
pamplona's picture

These CNBS anchors are idiots trying to demonize the pay day loan industry while they protect the Jamie Dimons and the Jon Corzines of the world. 


I spent $150 on groceries yesterday, annualized thats $55,000 a year on groceries!  But who says that I buy groceries every day?



Fri, 08/24/2012 - 18:33 | 2735649 pamplona
pamplona's picture

as an addendum, it's comical that these guys make a living as financial reporters yet don't understand that the concept of compounding interest does not apply in this context.  

Fri, 08/24/2012 - 18:00 | 2735553 Atomizer
Atomizer's picture

Nigel strikes again. Dutch elections

Fri, 08/24/2012 - 18:00 | 2735555 SwingForce
SwingForce's picture

Yeah, but No monthly minimum balance, NO monthly service charge, No overdraft or overlimit fees. Who cares what the % computes to, its still CHEAPER than a TBTF bank account. Really. And WalMart is gunning for this guy...

Fri, 08/24/2012 - 18:03 | 2735560 buzzsaw99
buzzsaw99's picture

cnbc doesn't give a rat fuk about anyone but their joo bank owners

look over there, an outrage that isn't connected to the felonious ny mafia!

Fri, 08/24/2012 - 18:09 | 2735578 q99x2
q99x2's picture

I pay cash for everything and no longer have any debt. I'm a bankers worst nightmare. Fuck the predators. Let them eat each other.

Fri, 08/24/2012 - 18:13 | 2735590 brown_hornet
brown_hornet's picture

My bank charges me $5 to transfer MY OWN MONEY to me from my savings acct

Fri, 08/24/2012 - 18:39 | 2735667 silverserfer
silverserfer's picture

and you deserve to pay said fee for CHOOSING to bank there. 

Fri, 08/24/2012 - 18:19 | 2735606 YesWeKahn
YesWeKahn's picture

Bernanke for president!

Fri, 08/24/2012 - 18:24 | 2735626 mademesmile
mademesmile's picture

Anyone else notice many of the " higher brand " companies are now offering rent-to-own options? This commercial is playing every 20 minutes in the St. Louis area. The main selling point is you get to make payments on the furniture for 48 months! Technically, it's not rent-to-own, but if you don't own it for 4 years, what else is it? 0 percent interest on 40% overpriced crappy furniture, AKA in house financing. Other new areas for buy now, pay later: new cars, carpet, Dental work, bathtub inserts, car repair, lawn furniture, pools, electronics.

Not many care about the cost or quality, just the monthly payment.


Sat, 08/25/2012 - 04:50 | 2736480 WTFx10
WTFx10's picture

ETHAN ALLAN is crappy furniture? What do you consider not crappy?

Fri, 08/24/2012 - 18:27 | 2735631 AldoHux_IV
AldoHux_IV's picture

The "Loaner Games"?

At this point, I'm all for Sheila Bair's idea of giving everyone $10milsky-- I mean really everything has reached the point of absurdity.

Hey Government! We get it, you like-- LOVE the banks, even though this relationahip is going to kill our country you're going ahead with it.  Just give us our cash and we'll leave you to whatever your unholy love fest is and be on our way just don't invade/or touch us in any way.

Sat, 08/25/2012 - 09:47 | 2736661 TheFuture_MrGittes
TheFuture_MrGittes's picture

The JB's had a similar idea.

Fri, 08/24/2012 - 18:37 | 2735660 ebworthen
ebworthen's picture

Organized crime - sanctioned by courts, politicians, and the "justice" department; "Corleone and Guido" now "Dimon and Corzine."

Fri, 08/24/2012 - 18:41 | 2735672 mrdenis
mrdenis's picture

My bank Vally National charged me 2 bucks to check my balance ...not at another bank but at another Vally bank branch ! 

Fri, 08/24/2012 - 18:48 | 2735699 dwill6413
dwill6413's picture

HAHAHA, sounds like the BIG BOY BANK shills are pissed that this consumer option is cutting into their profits from overdrafts, late fee charges and other fee's. Always look behind the curtain. :)


Fri, 08/24/2012 - 19:06 | 2735746 robertocarlos
robertocarlos's picture

I am soon out of debt. The bastards charge me 6 percent so that's 25 bucks a month.


I forgot the bank charges me $1.75 to withdraw any savings so I pay them about 28 bucks a month. I previously had 2 free withdrawals from my savings account every month.

Fri, 08/24/2012 - 19:44 | 2735859 rufusbird
rufusbird's picture

Support your local credit union.

Fri, 08/24/2012 - 20:06 | 2735904 Capitalist
Capitalist's picture

Once again the elitists think they know more than the market and that they have to "protect" the consumer.

Fri, 08/24/2012 - 20:57 | 2735980 laomei
laomei's picture

$15 for a $100 loan for 2 weeks.  It's basically a dollar and some change a day.  In all honesty it's not the WORST thing in the world.  Anything over 10% is predatory to be honest, but it really comes down to the amount that's being talked about and if that rate is compounding or not.  

Sat, 08/25/2012 - 02:41 | 2736387 the tower
the tower's picture

If you need to borrow $100 from a bank for two weeks, this means that you have no friends or family who can lend this to you. Only people in a poor social network will have to go through this, and for these people $15 is a lot.

This kind of money lending is catered to the poorest in society, it should be banned.

Sun, 08/26/2012 - 01:21 | 2738025 Cthonic
Cthonic's picture

Some people make it a point not to borrow from or lend to their friends or family.  Anyway, if you watch the clip, they ain't loaning to the poorest in society, they're offering short term bridge loans to the poorest planners in society. As disgusting as it is, no one is forcing anyone to take out a loan with these guys.  And if someone does get a loan this way, no one is coming to break their fingers if they're a day late on paying it back.  Interest rates just don't scale linearly to small sums.  When a person needs money now, and won't have any until later, they're usually stuck making hard decisions on how to minimize related losses.  If the lender isn't offering something of benefit, the borrower isn't going to go through with the transaction.

Sun, 08/26/2012 - 05:49 | 2738165 MalthusWasRight
MalthusWasRight's picture

On the other hand, to whom would those without a social network turn if they indeed did need this type of short-term financing?  One can imagine that it would be a lender with a slightly more aggressive collection plan than a commercial institution.

Sat, 08/25/2012 - 00:25 | 2736271 Lord Koos
Lord Koos's picture

I'm sure this loan guy is a Christian.

Sat, 08/25/2012 - 01:53 | 2736336 the tower
the tower's picture

400%? that's nothing:


Representative 1734% APR:

Sat, 08/25/2012 - 09:14 | 2736619 ella
ella's picture



Why are my tax dollars paying for this... "SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, the proposed Export-Import Bank of the United States investment in a $10 billion Australian coal-mining deal is at best highly suspect, failing to use sound underwriting principles ... too secretive for general public scrutiny ... may contradict the best interests of American foreign policy. "

WE are constantly told that we must control spending, so where is the control?

Sat, 08/25/2012 - 13:02 | 2737155 boiltherich
boiltherich's picture

Payday loan rip-off interest is NOTHING next to Chase fees and charges. I get paid by automatic deposit on the first of every month, it is a fixed income so I am careful with my bills and rarely write checks. I was a WaMu customer for years and I had a nearly perfect record in those years of avoiding NSF fees and over drafting my account. Maybe twice I made honest mistakes and by a few cents managed to rack up a fee, but the bank was always really good about it, hitting me with a single NSF fee of $25.

Along comes May 2009, I bought a good used Chevy truck because my little convertible was not up to the task of going camping. I had to add the truck to my insurance from mid May to August when my renewal came due, $119. My AllState agent said in future I could receive an additional 10% discount on my car premiums if I were to sign up for automatic payments. I told him I wanted to pay with my debit card today (it was the Monday before the start of the Memorial Day weekend) because I was going on a camping trip, but I would come in next week and sign up for the deal for next renewal in August.

I knew I had a couple hundred in the account and that I would be paid June 1 and I did not need more than about $40 bucks for the few things I needed camping because after all I was going to be out in the forest for several days, funds were ample till payday when I returned.

Well, of course I stopped and got $20 from the ATM for the campsite fees, and I needed charcoal lighter fluid from WalMart= $1.29, I got a cuppa Starbucks for $1.50, passing through Shady Cove I remembered I needed mustard for the dogs so I bought a bottle (Goulden's=$1.59) and when I got up to Prospect I stopped and got some cold beer, for another $6. Five transaction totaling $30.38, added to the $119 for the truck premium still left money in checking, not much but enough.

So I get to the campgrounds and the park hosts no longer collect the fees, it is now a self pay envelope drop box collected by a contract outfit that collects every few days. My fee was 12 bucks for two days so I wrote a check rather than overpay by $8 because I had no change. Again funds were enough. I was going to camp there for two days and go down to Stewart State Park for two more. But, it got cold and crowded Friday (May 29) as the weekend really got started so I just went home. When I got there I logged on to WaMu's online banker but the page was down for the switch over to Chase, it said check back in a few days for my new Chase online. I also went to my insurance agent and did the sign up for the future auto pay on premiums,

Well it was Sunday May 31, the day before payday when the account was available online again and to my horror I was nearly $300 overdrawn. And it was a Sunday so there was NOTHING that could be done about it. It turns out that the original $119 to AllState went through instantly on the debit card and my account was hit for that, but AllState then a full work week later had not posted that payment to my account, so when I signed up for the August auto pay feature their fucking computer saw that balance due and instantly hit my account for it again. That overdrew my account and generated not one but two fees of $32, and the bank paid the second fee so that made me <$70> before I ever hit the road when I thought I had plenty of funds available, and then the other transactions started to hit, 5 of them totaling less than $40 but each was sent through twice earning $64 in fees. and to make matters worse Chase does not post or tell you about fee charges till at least 48 hours has passed so I got paid and thought I was OK, but fees hit and got paid first and I saw a balance that was higher than what it really was even though you did not even know they were charged for another two days.

And there were a raft of new fees, a fee each day for being overdrawn, a fee per item to process a failed transaction, a fee for being three days overdrawn, I went to my WaMu, now Chase and the very same employees that used to be so helpful were now snotty, uncooperative and obviously terrified of being the first layoff of the many they knew were coming under new management. Then that forgotten $12 check came in...

NOBODY at the bank wanted to talk to me and the one guy that did basically said it was my fault deal with it, there was an actual glint of delight in his eyes, it was as if those chosen to not be terminated would be the ones that generated the most fee income for the bank and this prick just hit the mother load.

I told him that I had a $132,000 mortgage with Chase and they were not going to get another house payment till they fixed this problem to a reasonable set of charges and I did not even yet know why all this happened, all I knew was the total of fees was over $900. You deal with that motherfucker! And the truth was they stole almost a full house payment for the month of June 2009 so I could not pay the mortgage that month anyway if they did not refund the more unreasonable fees.

I found out that the former manager guy I used to find so helpful at WaMu was now in a grocery storefront location and I went to him, he got $300 of the fees reversed but said he would be fired if he tried to do more. Chase never apologized, and they never got another house payment, the house has been sitting empty for years. AllState was more than happy to refund the "overpayment" but took no responsibility for double charging my checking account and I have never done business with them since and I never will. I closed the Chase account and am with a credit union where once again there have been NO problems for years. I will never bank with a federally chartered regional or national bank again. Complaints to the comptroller of the currency... at the height of the financial meltdown? Round filed unopened is my guess.

You know I can understand when a habitual over drafter can't or won't control their accounts hit them with some punitive fees and see if they keep doing it. But, I had a good record with my account and they could see that there was a debit card charge to AllState of $119 on Monday and an AllState computer generated ACH transfer for $119 that same week which even to an idiot would seem fishy, and clearly since it was an ACH was not of my initiation.

The total results of that one simple mistake by AllState in the end has cost me essentially over $600 that month, my house, and since I knew this would devastate my credit I also traded the convertible, and the pick up I owned all of 7 weeks, for the BMW while my FICO was still 778 later in June. I was underwater by $19 grand on the two trade vehicles and BMW financed that as a balloon payment on the end of my car loan. So that is also pretty much part of the fiasco. Then I moved out of my house and became a renter again. Credit score now 590. And I have NO recourse against any of the nameless faceless monsters that robbed me financially in 2009. Part of me wants to head downtown and file chapter 7 and tell the whole world DEAL WITH THAT BASTARDS. And leave America for good because to stay means you willingly take such repeated ass rape so you can't complain, they have a license to steal and if you let them you deserve it.

Now, next to that what is a $39 charge for a 300 dollar payday loan?


Sat, 08/25/2012 - 21:56 | 2737902 bunnyswanson
bunnyswanson's picture

This happened to me but due to auto payments to HSBC.  I had instructed the bank and HSBC to stop the payments (lost my job) but HSBC pushed them through.  I had 300 in OD charges from daily attempts by HSBC. 

Thanks to WAMU/Chase, I am now in ChexSystem and have to bank with MetaBank - owned by Visa.  This bank charges 2.00 per transaction and 10.00 per month for banking fee.  Deposits must be made through direct deposit or at a store which is 5.00. 

It's been awful...This is what I mean when I say it is very expensive being poor.


Sat, 08/25/2012 - 13:43 | 2737252 dark pools of soros
dark pools of soros's picture

was that a CNBC issued headrug they gave that guy?

Sat, 08/25/2012 - 13:59 | 2737287 Downtoolong
Downtoolong's picture

I love this shit. It proves that just because someone is wearing a pinstriped suit doesn't mean they are professional, fair, or reasonable. In fact, it's more likely they don't give a shit about you, or your well being, or your future, or anything other than how they can squeeze your last dollar out of you. Even more likely, they want to force you into a position where they can squeeze a lot of dollars out of someone you know who cares more about you than they do. 

Imagine if your physician behaved this way, or even your parking garage attendant for that matter. This IS the financial industry.

Sun, 08/26/2012 - 05:51 | 2738169 MalthusWasRight
MalthusWasRight's picture

Welcome to finance, bitch.

Sat, 08/25/2012 - 14:11 | 2737310 DownsideHedge
DownsideHedge's picture

The fed is trying to firm up bank balance sheets for the final resolution of the Eruo and American debt crisis.  Banks have to make money who cares about the cosumer.  What's the problem would have been solved if the conusmer had access and a willingness to take on credit.

Sat, 08/25/2012 - 19:57 | 2737776 flaunt
flaunt's picture

Sorry but does anyone else see the irony in questioning the "legality" of someone charging usurious rates of interest on loans to extremely risky individuals while the very legal system that would make it "illegal" allows the bankers to get away with acts of financial terrorism that make such loans a necessity in the first place?  Cognitive dissonance on a mind-boggling scale.

Sat, 08/25/2012 - 20:58 | 2737845 fukidontknow
fukidontknow's picture


hey look in New Zealand once you're a trusted customer you can get the super low rate of only 520% most likely these favourable terms are available because we had the good sense to vote in an investment banker as our prime minister 

Sun, 08/26/2012 - 07:59 | 2738255 El_Puerco
El_Puerco's picture

I think, this Is the  right person, who can answer very well, how our banking system works!

Care to watch, if you want!



Sun, 08/26/2012 - 08:21 | 2738273 Umh
Umh's picture

In the service we would loan money at the rate of 100% per pay day. That frequently was 100% per day, because pay day was tomorrow.

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