The return on our investment...

As part of Paulson's Troubled Asset Relief Plan, JP Morgan Chase received $25 billion from the feds last October, making it one of the largest recipients of TARP funds.

In his October 10, 2008 press release defining the plan, Paulson assured the public that "this is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything."

Paulson, of course, was referring to the investment costs of TARP - and apparently felt that his plan would be a good deal for consumers. As he said in his press release:

"We expect all participating banks to continue to strengthen their efforts to help struggling homeowners who can afford their homes avoid foreclosure. Foreclosures not only hurt the families who lose their homes, they hurt neighborhoods, communities and our economy as a whole."

Back in those days, the housing crisis was the great issue confronting the Treasury Secretary - all those many loans handed over to consumers who had no money to pay them back - and all those many consumers stuck in houses that were now valued at less than the mortgage. It was a sticky conundrum for the policy makers.

There is another credit crisis looming - the credit card crisis - huge amounts of consumer debt piled high on credit cards. And consumers who signed up for Chase credit cards are wondering if Chase has pulled a "bait and switch" on them.

According to this story on MSNBC, Chase aggressively promoted a "lower than prime" balance transfer plan. Transfer your credit card debt to this Chase card, and they would be charged the very low interest rate of 3.99 percent until the balance of the debt was paid off.

Apparently they changed the terms of the agreement after people signed up for the program.

According to the MSNBC story, "last November, Chase notified about 400,000 people with these low interest cards their minimum monthly payment would more than double and a $10 monthly service fee would be added."

It seems that less than a month after they received $25 billion dollars from the feds to help alleviate the credit crunch, Chase decided to make it harder on consumers who were squeezed by their own credit issues.

The NY Attorney General's office has negotiated an agreement with Chase to end the monthly fee. Additionally, a class action lawsuit has been filed against Chase, seeking to push the minimum payment back to two percent, among other issues.

Is it bait and switch? It's up to the courts to decide. But I'm sure some of the TARP funds will go toward Chase's defense.


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