Tuesday, February 16, 2010

Russell Simmons is mad as hell and twice as incoherent

Over at HuffPo Russell Simmons is taking on the banks for something.  Here's an example of what passes for lucid over at the Po:

What's clear to me now is that banks are still increasing the cost to the powerless (poor) while they offer everyone else money to open accounts. I'm watching banks hold back features that they and I both know will help people save money and improve their lives. They trick customers into doing things that are not good for them through lack of transparency, and surprise them with new fees when they can least afford it. I'm learning an important lesson about ethics -- or lack of ethics -- in this industry. In fact, I'm fighting with a bank right now that doesn't know what kind of ass whipping they are going to get when I expose them for the abusive practices and exuberant fees they are charging the poor. They are trying to double their already outrageously high fees in exchange for providing absolutely nothing to customers. All I want to do is to get the poor a better deal, with more reasonable fees with better services. This bank is intentionally trying to destroy my industry, which is building a platform for under-served communities. And for this, they should be ashamed of themselves.
Well okey dokey, did you get all that?  Since Simmons gave no specific examples I can only take a stab at what he might be talking about.  But first let me clear something up.  Under the Community Reinvestment Act, which was passed in 1977, banks are required to meet the needs of low and moderate income neighborhoods and must tailor products specifically to low income people.  One way that banks meet this requirement on the deposit side is by offering accounts that have no monthly maintenance fee if the depositor has a direct deposit.  That does not mean that the accounts will never be charged any kind of fee but those fees that are charged are typically tied to the actions of the account holder.  Usually if an account racks up large monthly fees they either consist of NSF fees or debit card fees.  I am assuming that Simmons is referring to these fees but it is really impossible to tell by his rambling.
My guess is that Simmons has listened to too many Obama "fat cat" speeches and is simply jumping on the bandwagon.  If Simmons has a specific beef then he should air it but punching wildly in the air does nothing to help poor people and simply serves to make him look foolish.  Next time he gets the itch to take someone on he would do well to put down the pipe before he picks up the pen.

1 comment:

Anonymous said...

when I expose them for the abusive practices and exuberant fees they are charging the poor

Oh, godhelpme, the pictures this put in my head. Though spelled correctly, this has GOT to be the wrong word because what follows is the definition of 'exuberant:'

  /ɪgˈzubərənt/ Show Spelled Pronunciation [ig-zoo-ber-uhnt] Show IPA
1. effusively and almost uninhibitedly enthusiastic; lavishly abundant: an exuberant welcome for the hero.
2. abounding in vitality; extremely joyful and vigorous.
3. extremely good; overflowing; plentiful: exuberant health.
4. profuse in growth or production; luxuriant; superabundant: exuberant vegetation.

As I say, a lovely word...but WRONG!