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BY LINDA LEATHERDALE
Before visiting Canada yesterday, the new messiah for America, U.S. President Barack Obama was busy doling out more bailout money. And finally, after billions went to Wall Street, with bank brass treating themselves to fat-cat bonuses paid for by the taxpayer – some of the money is filtering down to Main Street.
In total, some nine million families will see mortgage payment relief worth US$275 billion.
Still, no-one’s answered this question. With the U.S. facing record deficits and owing US$60 trillion in total debt and unfunded liabilities – where the hell is all the money coming from? Tax revenues are drying up at a record pace, with California teetering on bankruptcy while many States face their worst financial crisis in U.S. history. Housing starts have crashed to their lowest levels since government began tracking them 50 years ago. People are losing jobs, homes and bankrutpcies are on rise.
Be warned: When the United States sneezes, Canada catches pneumonia. We’re already hurting, and it’s going to get worse.
So, it’s riling a lot of Canadians that while U.S. families get help with mortgage debt – north of the border big banks are getting away with fleecing consumers’ pockets by hiking the cost of borrowing, even as the Bank of Canada rate falls to a low of 1% and even after Ottawa removed $75 billion of insured mortgage debt off their books to free up credit. At least some bank brass are taking pay cuts. And so they should.
First, it was sweet discounts on variable rate mortgages that dried up. Then, banks started hiking the rates of interest charged on outstanding credit card debt. TD Visa’s rate, for example, jumped from 18.9% to 24.75% for clients who missed two consecutive minimum payments.
And now this: More banks are joining TD’s and Bank and Montreal’s lead and hiking rates of interest charged on secured lines of credit. TD even has the gall to charge a $35 inactivity fee if a line of credit is not accessed within a year.
”Linda, I just received my monthly statement from CIBC for my secured line of credit. They are raising the rate 1% and claim increased costs of lending products,” wrote reader Bill McLeod. “Considering my rate is prime, plus 3%, this is a 25% increase.”
South of the border, lenders have been hauled onto the red carpet by a U.S. Senate Banking Committee, demanding answers as to why they’re raising interest rates, adding fees and cutting credit lines, even for low-risk consumers with high credit scores, when the key U.S. lending has fallen to 0%.
But here in Canada, it’s open season on struggling families, with banks charging what they want and no-one holding them accountable for this new fleecing. That’s despite a groundswell of taxpayers demanding a new probe into the high cost of credit. Before I left the Toronto Sun, thousands had joined in my crusade for a new investigation…
Listen to Linda Leatherdale with popular Toronto morning man Bill Carroll on NewsTalk 1010 CFRB on Monday, Wednesday and Fridays at 7:30 a.m.
