Crapweasels &Economy Omnipotent Poobah | 18 Dec 2009
Meet Tony Soprano, New CEO of First Premier Bank
First Premier Bank is making the leap into legalized loan sharking with a new credit card offering a $300 credit limit for $256 in first year fees, a $29 late fee, and a $75 annual fee thereafter. Oh, and they want to charge 79.9% interest on the outstanding balance just to sweeten the pot.
First Premier – who’s already paid a $4.5 million out of court settlement for preying on bad credit borrowers – said they designed the program for high risk, sub-prime borrowers and needed to “price [their] product based on the risk associated with this market.” Since these types of cards and loans – albeit at much lower rates – are a big part of our financial mess, it’s 
nice to see they’re moving to a risk-based model.
But, isn’t this risk management with extreme prejudice?
Potentially charging much more than $300 for a $300 loan is a counter-intuitive way to encourage borrowers to pay the money back. It makes it makes it dead-solid certain they’ll default. First Premier might just as well have sent mailers to potential customers telling them to fork over the money now and avoid the inconvenience getting your $300 bucks now and having their knee caps meet a baseball bat up close and personal-like later.
Of course, First Premier is only making this tremendous deal available out of their concern about their least credit-worthy customers. “Even when the cost of credit is astronomical, for people in true emergencies, it’s much better than not having access to credit,” said Odysseas Papadimitriou, CEO of credit card search firm card-hub.com.
So, correct me if I’m wrong here Ody. If these borrowers need a quick $300 for an “emergency”, they probably wouldn’t have $256 to set up the account. Moreover, the prospect they’ll have an additional $29 per late payment, $75 for next year, and 79.9% to cover the outstanding balance just defers an “emergency” today into a big bigger “emergency” tomorrow.
Ody, you’re a real CPA (Certified Public Asshat).
Passing out huge executive bonuses is bad. Using TARP money to lobby for a loosening of regulations is loathsome. However, it takes some big stones – Gibraltar-sized ones – to be this greedy and arrogant.
With any luck, those huge stones will come together and roll swiftly down the mountain, directly onto your crapulent asses.
And, we’ll only charge you 79.9% on the balance of all your assets to dig you out.
Related articles
- Hidden Fees More Annoying Than Dog Poop (redtape.msnbc.com)
- First Premier Bankcard Offers Customer 79.9% APR Credit Card (americanbankingnews.com)
- Nelson Montana: Giving Credit Where Credit Will Do: How the Banks Have Changed the Rules Halfway Through the Game (huffingtonpost.com)
- Credit card chart of the day (blogs.reuters.com)
- Credit Card Comapnies Plan To Shrink Limits For Millions Of Americans (huffingtonpost.com)
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on 18 Dec 2009 at 4:09 pm 1.www.buzzflash.net said …
Meet Tony Soprano, New CEO of First Premier Bank…
First Premier Bank is making the leap into legalized loan sharking with a new credit card offering a $300 credit limit for $256 in first year fees, a $29 late fee, and a $75 annual fee thereafter. Oh, and they want to charge 79.9% interest on the outst…
on 21 Dec 2009 at 4:46 pm 2.daveawayfromhome said …
Did I miss a change in the rules that allows such ridiculously high interst rates? I thought they were capped somewhere around 30%.
Not that it matters much. If you deliberately walk into a wood chipper with your eyes open, you kind of deserve to get your leg chewed off. Only if they hide the wood chipper and then shove you into it would I have to be upset about this.
Which is not to say that First Premier shouldnt be investigated, shunned, driven from business, burned to the ground, and its management reduced to homelessness. But that’s just me.
on 28 Dec 2009 at 1:28 pm 3.jdlaughead said …
It’s up to the Damn States to start enforcing Usury Laws, or start passing strong usury laws. Congress is in the back pocket of these thieves and their strong lobbyists, who are nothing but legalized bribers. So forget Congress to do anything but fill their pockets, from “K” Street.