Congressional overseers of the TARP program are investigating the lending practices of several of the banks they bailed out in response to complaints that the banks are raising interest rates and fees, the Wall Street Journal reports. Despite receiving billions in taxpayer dollars, Bank of America last week nearly doubled some credit card interest rates to 14%, and added fees of $10 or more on a many credit-card transactions. Citigroup is advertising loans with a 30% interest rate.
Citigroup received $50 billion in taxpayer cash while Bank of America accepted a $45 billion injection, both intended to spur consumer lending. As first-quarter results come in this week, the panel will scrutinize earnings to see how much money is returning to taxpayers via loans. Banks argue that fees for everything from ATM use to late payments are a key income source, netting $39.5 billion last year.