July 02, 2012 journal, the sad situation for persecution of poor people from the evil banks. The creator of money give it to the banks then the bank's loan it to the government then it becomes a debt to the tax payers. "The country's biggest banks are happy to make their money from the same governments about which they love to whine. Bankers love to rail against government interference in the "free market." Jamie Dimon, grilled this week in front of Congress over JP Morgan Chase's massive recent losses, famously complained last year that some regulations are "anti-American." And Lloyd Blankfein, CEO of Goldman Sachs, warned ominously that increased regulations might make the bank seek out another location to do its business: "Operations can be moved globally and capital can be accessed globally," he said. Even while some of them occasionally have the grace to admit that they wouldn't still be around without the massive taxpayer bailouts of 2008 (and continued access to ultra-cheap loans from the Federal Reserve), they still like to claim that they're free-market entities, subject to the whims of the invisible hand, and that the government's meddling can only be destructive. Yet those same banks are happy to make their money from the same governments about which they love to whine. Most of us know about the big, official bailouts. But the banks get much more than that from federal and state governments. Those lobbying dollars and campaign donations aren't just to keep regulators away; they lead to lucrative contracts where banks are paid to administer government services, and are put in position to skim fees off the very same taxpayers who pay for those services. The big banks have their tentacles in every aspect of government-despite right-wing hand-wringing about government bureaucracy, the big banks are often actually the ones coming between you and your money. So who's really getting rich off "welfare"? JP Morgan and Bank of America. Below are six ways the big banks rake in cash every day from services that are supposed to help working Americans. 1. Big Contracts for Food Stamps Suzanne Merkelson at Republic Reports points out that Supplemental Nutrition Assistance Program (SNAP) benefits-the program formerly known as food stamps, which provides food aid to families-increased to $72 billion last year (from $30 billion in 2007). And as the lousy economy keeps people relying on benefits to feed their families, big banks keep benefiting from the program too. A new paper [PDF] from Michele Simon finds that SNAP "represents the largest, most overlooked corporate subsidy in the farm bill." Merkelson writes: While SNAP is a federal program, USDA and the states work together to administer the program. States contract with banks, who authorize payments (Electronic Bank Transfers or EBTs) from the Federal Reserve to retailers. J.P. Morgan Chase has contracts in half the states "indicating a lack of competition and significant market power," according to Simon. How much are these deals worth? In New York, one seven-year deal originally gave the bank $112 million for its services, but was recently amended to add another $14.3 million. JP Morgan spends a bunch of money lobbying the Department of Agriculture on this program, making sure they get what they want-a big paycheck from state taxpayers. And the best part? When you have a problem with your JP Morgan SNAP benefits card? You call a JP Morgan call center for help-and that call center just might be in India. So to recap: big bank makes money off a program that helps people who are unemployed-and creates jobs in India with that money, rather than creating them here in the US. 2. Making Money Off the Unemployed The banks get paid directly by the state to handle the SNAP program, but that's far from the only program designed to help the victims of the lousy economy that has turned into a cash cow for the banks that created the crisis in the first place. Unemployment benefits in 41 states are provided through Wall Street giants like Bank of America, Wells Fargo, and JP Morgan Chase. In South Carolina, for instance, customers get a prepaid debit card from Bank of America to access their unemployment benefits-which is, of course, fee-free at a Bank of America ATM. But for rural South Carolinians, the nearest Bank of America ATM might be 50 miles away. Shawana Busby, a South Carolina user of the program, tells the Huffington Post that she's probably spent $350 in fees to access her benefits-which are $264 a week. Another user of the cards, Sandra Gortman, tells the Huffington Post that she was pressured to adopt the prepaid card, and then when she used it to put gas in her car, the gas station put a hold on her card for $75, which didn't come off for three days. When she called to check on the hold, she was charged a customer service fee. (The bank has now eliminated such fees.) The bank also collects a 3-cent fee from the state each time it "facilitates" a transfer on a prepaid card. It also gets those fees for direct-depositing unemployment benefits into someone's bank account. 3.Sweet Campus Deals Prey on Students While Distributing Federal Student Aid Money A recent report from USPIRG, "The Campus Debit Card Trap," dug into the deals that universities, both public and private, make with banks to produce student ID cards and more significantly, actually handle and disburse student financial aid. In other words, young people who've already signed up for a lifetime of student debt are being preyed on further by banks that can charge them fees just to access their money. (And, remember, those same big banks are already making big bucks on student aid.) USPIRG found that 32 of the 50 largest public 4-year universities and 26 of the largest 50 community colleges-the schools in part supported by taxpayers-had deals with banks to provide debit or prepaid cards for students. The campuses often get money from the banks for the privilege of access to students, and the banks then make their money back in fees-and possibly other ways, too. Mela Heestand, writing for AlterNet about the protests at the University of California Davis that drove US Bank to close its campus bank branch, pointed out that "university contracts with banks encourage tuition hikes, because banks stand to profit directly from rising tuition, while the administration comes to rely on funding from bank contracts." US Bank has agreements at 52 campuses around the country. (After the protests that shuttered the US Bank branch, twelve activists were arrested and face up to 11 years in prison and $1 million in fines.) Students are the ones bearing the costs of access to money they're already paying interest on, and USPIRG points out that the fees are "steep and frequent," including per-swipe fees, inactivity fees (yes, you read that right), overdraft fees and fees to reload their prepaid cards. And financial aid that is paid to students through a debit card is subject, just like any other card, to ATM fees if students use an ATM not owned by the bank that currently has their money. The Department of Education has rules on this practice, banning banks from charging fees if they provide "convenient" ATMs for the students' use, but their definition of "convenient" is vague-leaving students at the mercy of a single ATM on campus, which produces long lines and leaves no alternative if it breaks or runs out of cash. 4. Cashing in on Tax Returns It's not only your unemployment, financial aid, or SNAP benefits that the big banks control these days-they also might come between you and your tax return. Once again, South Carolina takes the lead, claiming to save the taxpayer money by cutting a deal with Bank of America, this time to send out tax returns in the form of-you guessed it-prepaid debit cards from Bank of America. And just like with unemployment benefits and financial aid (or your regular, consumer bank card), the bank is making its money collecting fees from people trying to access their own money. "They're not even nickel and diming people, they're five-dollaring and 10-dollaring people," Sue Berkowitz, Director of the Appleseed Legal Justice Center, says. Oh, and the bank got this deal through a no-bid contract-the Department of Revenue calls them "the best fit" for the program. The program isn't mandatory but, the Palmetto Public Record notes, it's opt-out, not opt-in. Which means that unless you request otherwise, your money will be given to you through Bank of America-which in addition to sticking you with ATM fees and other charges, is going to make interest on your money while it's sitting in their account. 5. Refinancing Homes Means Big Bucks for Banks Getting the big banks to refinance mortgages and help people facing foreclosure stay in their homes has been a huge fight, with activists around the country putting their bodies on the line, physically occupying homes to keep residents in them. Now the program that's supposed to help those struggling homeowners looks instead to be a big fat handout to the same banks that were preying on borrowers to begin with. According to the Wall Street Journal, banks that service mortgages could make as much as $12 billion by refinancing under the newest version of the Home Affordable Refinance Program (HARP 2.0). And the borrowers? Oh, they'll save money, too-somewhere around $2.5 billion, maybe $5 billion tops. The program is supposed to let underwater borrowers who've made all their payments in good faith refinance their mortgages at current market value. But, Bonnie Kavoussi at the Huffington Post notes, instead those banks are able to charge steep fees and above-market interest rates. Shaun Donovan, the current Secretary of Housing and Urban Development calls it "a monopoly on refinancing," saying at a Senate hearing, "Whoever holds their current loan, whoever is the servicer, they can charge [borrowers]-and we're seeing this-very high fees." 6. Profiting Off The Very Idea of Another Big Bailout In case all this profit enabled by the government wasn't enough for you, perhaps the most disturbing recent bank-related news is a report by the "wild socialists" at Bloomberg that, "JPMorgan receives a government subsidy worth about $14 billion a year, according to research published by the International Monetary Fund and our own analysis of bank balance sheets." They explain: In recent decades, governments and central banks around the world have developed a consistent pattern of behavior when trouble strikes banks that are large or interconnected enough to threaten the broader economy: They step in to ensure that all the bank's creditors, not just depositors, are paid in full. Although typically necessary to prevent permanent economic damage, such bailouts encourage a reckless confidence among creditors. They assume the government will always make them whole, so they become willing to lend at lower rates, particularly to systemically important banks. In other words, because we bailed them out once, the expectation that we'll do it again is actually making the banks money. Other lenders are willing to lend money to the "systemically important banks" (read: banks that got bailed out by the US government because they were "too big to fail") at lower interest rates because they presume that they'll always get their money back since the government will make sure the banks don't go belly up. So the biggest banks are paying less in interest than medium-size and small banks--and that adds up to billions. So they're profiting just from being too big to fail. And each time there's a crisis, the expectation of government support actually grows-as of 2009, Bloomberg notes, they're saving about 0.8 percent every time they borrow. The total benefit to the big banks just of the expectation that there will be another bailout? About $76 billion a year-which Bloomberg points out is equal to their total profit from the past twelve months, and is more than the federal government spends each year on education. Brad Sherman, a Representative from California, asked Jamie Dimon this week, before Congress, "[H]ow can medium size banks compete against you when your cost of capital is reduced by 80 basis points, 0.8 percent, because of a belief that if they go under we'll let 'em go under, but if you go under we'll bail out your creditors?" Dimon, of course, claimed that it wasn't true, and that he borrowed in the marketplace, "with the smartest people in the world." But it looks like the smartest people in the world are getting a whole lot of help-and making a whole lot of money-off of college students and taxpayers, off the working poor and unemployed in the U.S. This piece was reprinted by Truthout with permission or license." Klaatu-All true. But these are side effects of the corruption of our financial system and the government it has purchased and owns. Rather than fixing each one of these problems individually, take away the basic weapon the money power has, the ability to create and control money. 1. Reenact Glass-Steagall re-separating banks into deposit banks and investment banks. 2. Declare the investment banks bankrupt, which they are. 3. In bankruptcy the gambling debts (speculation) will be declared null and void. 4. Let them fail. 5. Jail them after 1934-style Pecora Commission hearings and prosecutions. 6. Audit and abolish the Federal Reserve. This will get rid of most of the national debt. 7. Restore constitutional money based on national credit which Lincoln brought back with his Greenbacks and Kennedy tried to do. Look what it got them. 8. Remove corporate personhood. 9. Start infrastructure projects to rebuild the country which will create many jobs. 10. Clean up the courts and law enforcement. 11. The economy will recover quickly and dramatically. Help people understand this program. gew600-If they only would...vote the repubs out...and then let's march and get it done.... Douglas-You are mistakenly assuming that the Democrats have any interest in doing any of these things. They don't! Which ones of these proposals has Obama promised to support and work for? Which ones have the Democratic senatorial and congressional candidates in your state promised to support? None of them! That's what I thought. shamocracy79-You missed the entire point, both sides are blatantly corrupt by the same corporate special interest groups. The Left vs Right is all a charade, mostly focusing on social issues to divide us and keep us from realizing the actual game being played. 12. Separate Money from the political process. We need to go beyond campaign finance reform and remove all outside money from our political process if we ever want to clean it up. No campaign donations, no lobbying, no subsidies. Have all campaigns state funded, it'll cost more the first year but we'll easily make it back by cutting out corporate welfare and wasteful spending that comes with corrupt politicians. Theodore Ziolkowski-Use this link to contact the Department of the Treasury, the U.S. Attorney General, and the Inspector General to file complaints about the concerns and problems that you may have with what they are doing. http://www.treasury.gov/connec... 1. Big Contracts for Food Stamps. SNAP "represents the largest, most overlooked corporate subsidy in the farm bill." big bank makes money off a program that helps people who are unemployed-and creates jobs in India with that money, rather than creating them here in the US. 2. Making Money Off the Unemployed. The bank also collects a 3-cent fee from the state each time it "facilitates" a transfer on a prepaid card. It also gets those fees for direct-depositing unemployment benefits into someone's bank account. 3. Sweet Campus Deals to Prey on Students While Distributing Federal Student Aid Money. Students are the ones bearing the costs of access to money they're already paying interest on, and USPIRG points out that the fees are "steep and frequent," including per-swipe fees, inactivity fees (yes, you read that right), overdraft fees and fees to reload their prepaid cards. 4. Cashing in on Tax Returns. in addition to sticking you with ATM fees and other charges, is going to make interest on your money while it's sitting in their account. 5. Refinancing Homes Means Big Bucks for Banks. banks are able to charge steep fees and above-market interest rates. 6. Profiting Off The Very Idea of Another Big Bailout. profiting just from being too big to fail. And each time there is a crisis, the expectation of government support actually grows-as of 2009, Bloomberg notes, they're saving about 0.8 percent every time they borrow. The total benefit to the big banks just of the expectation that there will be another bailout? About $76 billion a year-which Bloomberg points out is equal to their total profit from the past twelve months, and is more than the federal government spends each year on education. I say we need a Law which states the US Government will NEVER Bail-Out another Financial Institution. Fisrt re-instate Glass-Steagal Act that separates banks into either Investment Banks or Commercial Banks. Then if an Investment Banks fails LET IT FAIL. If a Commercial Bank is failing, let the Government Take it over and run it for the PEOPLE of the Country. gew60-How about using social security offices to give these checks....we already have them and. I'm sure we could hire people to work on this at a lower cost than we are paying the banks.....I remember when banks worked for us....we have to take big profits our of some these things.... greed breeds corruption and then we let them give themselves big bonuses right after they ripped us off....sure pensions are having a hard time meeting their expenses, they invested in this crap and lost and now the big banks want pensions to pay a second time for their mistakes, wall street too..let them fail and bail out main street from now on....we paid the taxes... tomdoff-as anyone ever measured whether the TBTF bank executives are shoveling bundles of cash out their back doors into their limos and town cars and Maybachs and Ferraris and Lamborghinis faster than their security guards can shovel treasury bills from Treasury Department 18-wheelers through the front doors and into their vaults? Kevin Schmidt-This is what happens when you continue to vote out of fear for the lesser of two evil, fascist, criminal political parties. Journals-You forgot to mention the $16.5 trillion the Federal Reserve handed the largest banks over this last year, with a smaller piece of the giveaway going to some foreign banks as well. The huge elephant in this room is that, among other things, the banks use this money to lend the Federal Government for its annual budget! This accounts for a huge portion of our national debt. Instead of the government getting the paper money directly from the Fed, the Congress/financial lobby has it wired go through the banks first. How sweet it is . . . and NOBODY is calling them out on this. Steve-How about the below market, below inflation, rates that they are offering the middle class on CDs. This would not be possible without the artificially low fed rates. Once you could live on the interest on one million. Now the interest on one million will not even pay for medicare and supplement Steve-How is it a capitalist country when the government uses taxpayer funds to artificially depress the cost of borrowing from the Fed for the big banks to a level significantly below real inflation. I thought a central idea of capitalism was that the price of recources would find their own level in a free market. In a free market the cost of money for banks would inflation rate plus risk premium plus overhead plus a small profit (maybe 1/2%). gew60-I wish I could put my money in a state run bank that is not for profit....these people make money off our misery....the same for healthcare insurance policies...anything that we have to have to live shouldn't not be for profit....anything we just want can be. Scott_ffolliott-Jamie Dimon? Ah, but for whom does he work? Let's talk about the very rich who benefit. Cynthiaothomas-What's your take on the public Bank of North Dakota BND and the Public Banking Institute? The mortgages with title transfer history through MERS are all fraudulent and home owners that have contested their foreclosures have been ruled for by the courts and allowed to stay in their homes. abys32-Please, move away. This is a capitalist country. The competition will be happy to fill in the gap and make that money and I will patronize the pro-America competitor. Already do. Theherbfactor-and capitism is bulls--t..it allows for a society to be hogtied by a few greedy a-sholes and sadists who have no soul..Please..move away with the all the capitalist...i am sure there is a better way to run a country than it is being run now.. Klaatu-apitalism is the British "free trade" we tossed out on its ear during the Revolution and replaced it with the American System designed by Alexander Hamilton. It worked fine and made us prosperous until traitor Aaron Burr's buddy Andrew Jackson illegally torpedoed it in 1835 during a congressional recess. "The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson." -- Franklin D. Roosevelt gew60you by yourself do not get to decide this...capitalism as we know it is not working, we need to modify it and make it work for all the 'we the people' not just a few.... shamocracy79 "Crony capitalist" country you mean. True capitalism doesn't involve bailouts for "too big to fail" corporations, aka Corporate Welfare. A country that pretends to be a free market capitalist country while actually being a corporate controlled fascist state will always bail out their corporate masters. Remove money from politics, it's time for the people to regain their voice." It is an endless cycle of scratch each other's back from the Freemasons and now the Illuminati has merged to sink the American people for ever in debt and frustrations. Only a total meltdown will fix the problem and it may not stay fixed forever. The End Is Near-By David Swanson, War Is a Crime | Op-Ed Are We at a Tipping Point? Political Carnival Germany Cedes Some Ground in Steps to Bolster Euro - The New York Times \http://truth-out.org/news/item/10086-six-ways-the-big-banks-are-getting-back-door-bailouts?newsletter What they say about killing Christians in the Bible will come true in our time. Prepare.