Citigroup Increases Credit Card Interest Rates

Citigroup (C) has increased interest rates on up to 15 million U.S. credit card accounts only months before curbs on such rises come into effect, the Financial Times reported.

“This is part of an ongoing process they do,” said Dennis Moroney, Research Director of Bank Cards at Tower Group. “Our research indicates the banks have been very active in reducing lines and raising rates, anticipating they can’t when the legislation takes effect in 2010. At the same time, they don’t want to kill the golden goose -- the customers.”

The paper cited people close to the situation who stated the increase will affect between 13 million and 15 million credit cards the group co-brands with retailers like Sears (SHLD).

In addition, the company is on the verge of relinquishing a 34% stake to the U.S. government as part of its rescue during the economic downturn.

“We have adjusted pricing and card terms for some customers as part of our regular account reviews,” Citigroup said in a statement. “This is an ongoing process to ensure we offer terms, interest rates, credit lines and products based on individual needs and risk profiles. These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit.”

President Obama passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 in May to help control financial industry practices.

“We’re not going to give consumers a free pass,” Obama said before signing the bill. “We expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives.”

Moroney said the new legislation is pro-consumer and that it makes it more difficult for banks to adjust risk-based pricing, among other things.

In order to avoid credit troubles, Moroney said consumers should create a debt management plan – one that looks at money coming in and going out.

“Now, the creditor knows they will get paid, the consumer will get a break from phone calls, and cash flow is being helped,” Moroney said.

Consumers should not hide from their lenders, and if things get tough, reach out to Consumer Credit Counselors for online or telephone counseling help, he said.

Al Lewis: Getting Religion in Market Of Shattered Trust

Feeling spiritually bankrupt after watching Bernie Madoff's sentencing, I took the subway uptown to the Union Theological Seminary, where they teach a class called "Christianity and the U.S. Crisis."

"As a nation, as a culture, as Christians, we have behaved abominably," Serene Jones, the school's president, told me in her office. "We built a Tower of Babel out of greed and false religion and it's collapsed."

Blame Wall Street, the money center banks, the mortgage industry, and the psychos that we've permitted to manage our money, our government and our companies.

"The greed that drove the top is a greed that lives in all of us," Jones said.

While some people say that God is good, others will argue that greed is good.

And there are others still who preach that both are good, like those "prosperity gospel" preachers on TV: Plant a seed (with them, of course) and reap an abundant harvest from the Lord. Amen.

Jones, who heads a progressive, liberal Christian school, doesn't overlook the flaws of faith.

"Religion needs to have rules about keeping itself straight," said Jones. "The biggest crimes of all are the ones that religion commits in its in own name."

But nobody needs religion when the market is going up. It's usually when the market is going down that people pray for damnation.

"May Satan grow a fourth mouth, where Madoff can spend the rest of eternity," I heard Madoff victim Burt Ross cry at the Ponzi-schemer's sentencing. It was a reference to Dante, who envisioned Judas, Brutus and Cassius getting eternally chomped in Satan's existing oral orifices.

The former mayor of Fort Lee, N.J., lost $5 million investing with Madoff. Now he's reduced to clever literary allusions.

"Can we say Madoff was a righteous Jew who served on the boards of Jewish institutions when he sank so low as to steal from (Nobel Laureate and Holocaust survivor) Elie Wiesel?" said Ross. "A righteous Jew, when in reality, nobody has done more to reinforce the ugly stereotype that all we care about is money?"

What would Jesus do?

"Jesus teaches us that every single person is a child of God and deserving of fundamental respect," said Jones, "and that includes not being lied to, not being harmed, not being deceived or exploited."

Yet if Madoff had considered Ross a "child of God," he might have asked for a meeting with Ross' big, cosmic daddy to line up another "investment." Religion was simply a fraudulent seal of approval.

And the people who believed? They were the ones who were supposed to do the moral heavy lifting. You know, honor the truth, love the neighbors, believe in a better world to come, and worship God, who, given human history, is apparently indifferent to market inequities and freaks like Madoff. All the while, Madoff picked their pockets. And the nation's financial system collapsed because its minions chose to enrich themselves making worthless paper and shoddy loans.

Madoff is going to prison for the rest of his life. So what? He's 71. For most of his days he lived like a god. Deception -- which religious folks consider a moral failing -- seems like a trait of the most highly evolved when you notice who rises to the top of our food chain.

Bankers are still getting bonuses, even while eating our tax dollars. And moral reflection -- you know, like the kind we had after Enron, WorldCom and (name your favorite scandal here) -- doesn't change the market or the human condition.

"The big banks are acting like they just can't wait to get back to doing just what they were doing before," said Union professor Gary Dorrien, who also teaches the "Christianity and the U.S. Crisis' class. "Their bailouts just made them feel better.

"They're lobbying very hard to quash any sort of meaningful regulation of derivatives," he said. "They're not even all that concerned with cleaning up their balance sheets. .. And there's no day of reckoning coming for .. the blatantly unethical behavior, and the way mortgages were pushed out the door, signing up people who can't remotely begin to pay for them."

So where was religion as all of this went down? Mostly just declining.

"We're (located) across from the National Council of Churches, and it's not like they didn't try," Dorrien said. "They have got documents up to here they put out about usury and the like .. It's mostly a litany of failure.

"But now we have millions of people saying, "I'm amazed at what the banks were doing, but look at my own life. I'm in debt up to my eyeballs' .. There is moral reflection about all of that," Dorrien said.

Hundreds of people -- including some from Wall Street -- are attending the class, which also will be highlighted in on PBS's Bill Moyers Journal on July 3.

So we've now got reflection and introspection .. and then?

"We might just build another Tower of Babel," said Jones, "and it will keep collapsing on us."

(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET. Contact Al at al.lewis@dowjones.com or tellittoal.com)

FOXBusiness.com's Week in Review: June 22-26, 2009

Monday

The nation’s health care agenda dominated headlines this week.

According to an independent analysis of the Senate’s proposal for health-care reform, roughly one in eight workers in the U.S. receiving health benefits from their employer could pay higher income taxes on those benefits.That’s nine million workers. FOX Business obtained a presentation that proposes “options to limit allowable tax free health benefits” that was put together by the Senate Finance Committee Chairman Max Baucus (D-Mont.), heading up the Democrats’ efforts to find funding alternatives for the plan.

FOX Business had an exclusive interview with Claudine de la Villehuchet, who blames Bernie Madoff for her husband’s dealth. The widow of feeder investor Rene-Thierry de la Villehuchet said the scheme was what pushed him to kill himself.

Starting the week on a bit of a sour note, the Dow fell 201 points Monday afternoon at close. This was the worst day for the average in two months, closing at 8339.

I Think He’s a Murderer’
No Sympathy for Ruth Madoff

‘He Killed My Husband’

Cavuto's Deal: Bad Deal
Nationwide Average
$2.67 a gallonTuesday

The Justice Department may end up dropping the case against UBS attempting to force the Swiss bank to give up the names of 52,000 Americans who the U.S. suspects to have offshore accounts for evading taxes. This is according to a report in the New York Times Tuesday. Last weekend the Swiss Finance Minister said a deal might be worked out with American authorities now that Switzerland has agreed to a new double taxation treaty to fight tax evasion.

President Obama said at a news conference he’s drawing no line in the sand regarding a public health insurance plan, at least for now. He said he believed such a plan “made sense” in reforming the health-care system, however. But the president would not directly answer a question of whether he’d veto legislation passed that did not have public insurance in it. Insurance companies as well as fiscal conservatives worry that if the government does offer a public plan, it could put health insurance companies out of business and lead to government control over the entire system.

FOX Business Network’s Elizabeth MacDonald broke down a lot of the myths she says are floating round regarding the health care debate. She sets the record straight here.

Dreamliner Delayed… Again Dept.: Boeing (BA) said it will delay a test flight of its new Dreamliner 787 jet because of modifications the company needs to make due to structural weaknesses. Boeing says the delay is “due to a need to reinforce an area within the side-of-body section of the aircraft.”

Madoff’s Lawyer Requests Leniency

Health Net CEO on Health-Care Reform

Cavuto’s Deal: More Czars the Merrier

Mulally: Ford Ahead of the Competition
Wednesday

The Commerce Department released its report on durable goods orders, which said they were up 1.8%. This larger-than-expected increase suggests the economy may be making its way to recovery. Economists predicted a 0.6% decline.

Employee Compensation Dept.: Citigroup (C) will be boosting its employees’ base pay by up to 50%, according to a New York Times report. This is to offset smaller bonuses the company is giving out this year. The bank is doing what it can to keep good employees on board and make up for a drop in their stock holdings’ value, said the report.

The Federal Reserve announced that interest rates would remain at the same level Wednesday afternoon. The Federal Open Market Committee is holding the funds rate at a target range of 0% to 0.25%, but issued a slight concern for inflation.

Buffett on Economy, Inflation

Buffett on Unemployment, Obama

Cavuto's Deal: What Happens in S.C.

TARPed Banks Lower Bonuses, Up SalariesThursday

The weekly jobless claims report said they hit their highest level since mid-May, despite some recent signs the economy is turning around. The Labor Department said the number of people filing for initial claims rose 15,000 last week to 627,000.

GMAC Financial confirmed it is suspending financing for some Chrysler dealers. After the auto maker filed for bankruptcy GMAC took Chrysler Financial’s place as dealers’ preferred lender.

Federal Reserve Chairman Ben Bernanke was grilled by lawmakers Thursday as he defended the central bank’s role in the Bank of America (BAC) merger with Merrill Lynch. He denied he pressured officials to go through with the merger.

Meanwhile, Allen Stanford pleaded not guilty to charges of fraud. The billionaire financier has been accused of running a $7 billion Ponzi scheme.

Ending a four-day slide on Wall Street, the Dow jumped 173 points, closing at 8472. This was the largest rally so far this month.

But any happy thoughts after the rally were quickly erased once reports surfaced that Michael Jackson was rushed to a hospital Thursday afternoon after suffering a heart attack. The pop legend was confirmed to be dead later that night.

Forbes: Bernanke Should Lose Job

Ex-Stanford Employee: Stanford's Guilty

Cavuto's Deal: More Pork, Please

Merrill, the Thorn in BofA's Side?
Friday

Consumer spending rose 0.3% in May. That’s according to the Commerce Department and was in line with expectations. This was the first gain since February.

UBS plans to raise $3.45 billion, but will continue having trouble says Switzerland’s financial regulator FINMA, which will continue to oversee the bank until its legal issues with the U.S. over taxes are cleared up.

iPhone App Dept.: There’s an app for that… unless it has adult content. This is what Apple (AAPL) said after pulling the plug on the first adult application for iPhone that appeared in the App Store on Thursday. The Hottest Girls App had photos of topless women. Apple told FOX Business that it “will not distribute applications that contain inappropriate content” and that the software was a violation of the Developer Program.

And R. Allen Stanford will be staying behind bars after all this weekend. Though he was granted bail, this was appealed by prosecutors and a judge blocked his release deeming him a flight risk due to offshore accounts.

Don’t Do That!

Takes One to Know One

Motown Legend on King of Pop

Gov't Considered AIG Bankruptcy in Jan.

  

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Market Winners & Losers: Lennar, Paychex

It’s easy being green. The major indices made big gains Thursday, with the three major indices each ending up 2.1%.

Here are Thursday’s winner and losers:

Winners

Lennar Corp. (LEN)
The homebuilder bucked a second-quarter loss with a massive upswing in orders. LEN shares responded positively, soaring $9.19, or 17.5%, to $1.37.

SLM Corp. (SLM)
The student-loan provider gained 10.4% on the back of a JP Morgan upgrade. SLM ended Thursday up 87 cents at $9.20.

Bed Bath & Beyond (BBBY)
The retailer carried Wednesday’s afterhours earnings release into Thursday’s session, as shares surged 9.5%. BBBY finished trading at $31.08, a gain of $2.69.

Cameron International Corp. (CAM)
Cameron International saw its stock gain 8.6% after Goldman Sachs issued an upgrade on the oil equipment provider. CAM ended the session at $29.02, a gain of $2.30 on the day.

KB Home (KBH)
KB Home rode the rally started by fellow homebuilder Lennar, with shares gaining $1.13, or 8.3%, to close Thursday’s session at $14.77.

Losers

Paychex Inc. (PAYX)
Poor quarterly earnings dropped shares of the payroll processing company 6.2% on Thursday. PAYX fell$1.65 to $25.06.

ConAgra Foods Inc. (CAG)
A 13% drop in profit in the fourth quarter cost the stock 4.2% on Thursday. CAG shares sank 85 cents to settle at $19.18.

SUPERVALU Inc. (SVU)
The discount grocer fell for the second day, with shares losing 52 cents, or 3.7%, to settle at $13.29.

Nike Inc. (NKE)
A downgrade by Susquehanna Financial cost Nike’s stock 3.3% on Thursday. Shares of the shoe manufacturer fell $1.74 to $51.28.

Automatic Data Processing Inc. (ADP)
The outsourcing processor got hit hard Thursday as Barclays issued a lower forecast for the company’s earnings estimates through 2010. ADP closed at $34.61, a loss of 82 cents, or 2.3%.

Cavuto: Mark Sanford's Future Is Shot

Missed Wednesay's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

The Gov not feeling the love.

And suddenly the grand old party in a grand old mess.

And here's the deal.

A gov feeling the heat.

And not the heat that got him in this heap of trouble.

And lest you think what happens in South Carolina stays in South Carolina, think for a moment who we're talking about in South Carolina.

Republican Governor Mark Sanford.

From "Terminator" sequel to "Love Gov No. 2."

And just when you thought no one could top Eliot Spitzer's fall from fame.

This rising Republican star zips up, or shall I say "down," to give it a shot.

Because Mark Sanford's future is shot.

Resigning as head of the National Governors Association because of a certain "association" with a friend from Argentina...

And a growing throng of disappointed Republicans wishing he would just "go" to Argentina.

Because perhaps the party's best advocate for fighting big government...Is now in the biggest fight of his life.
More focused on his marriage, which looks rocky.

Than a republican challenge to big health care, that increasingly looks doomed.

His peccadillo timing couldn't prove worse.

Just as Democrats rush a healthcare monster pegged at a trillion bucks and growing.

And the field of Republicans able to take it and the president on...Are down and dwindling.

Sanford today...

Nevada senator john ensign almost two weeks ago today.

So today, a mess.

Big healthcare coming. Big opposition melting.

And an already poorly polling Republican party hurting.

None of this is to say healthcare's a sure thing.

Just today, suddenly looking like a "surer" thing.

Because prominent Republicans are dropping like flies.

Not hard to figure.

After all, hard to be the loyal opposition.

When so many of 'em seem to have trouble being loyal...To their wives.

Look, we all know Democrats' eyes wander, too.

It's just a hell of a time for some Republicans' eyes to so publicly wander...Now.

GMAC Suspends Financing for Chrysler Dealers

Chrysler seems to have found its way out of bankruptcy, but its dealers are facing another roadblock as GMAC Financial has confirmed it is suspending financing for some Chrysler dealers.

In May, after Chrysler filed for bankruptcy, GMAC became Chrysler dealers’ preferred lender, taking over for Chrysler Financial, a separate company from Chrysler the car maker.

The approval for new financing provided hope the necessary lending would be provided for many Chrysler dealers to remain in business.

“GMAC has been providing underwriting for individual Chrysler dealers on an interim basis while the credit evaluations are being conducted,” said Beth Coggins, a GMAC representative. “GMAC has begun the process of alerting Chrysler dealers on its decision whether or not to extend permanent financing.”

GMAC originally received $7.5 billion in additional government aid for loans, but the company said it cannot provide for financially unstable dealers. It began reviewing dealerships in May, and the process can take nearly six months.

“GMAC evaluates applications based on our standard underwriting procedures to determine dealer credit worthiness,” Coggins said.

Without the financing, Chrysler dealerships could be pushed out of business, further reducing sales and adding to the 789 dealers Chrysler has already shed.

GMAC declined to say how many of the dealers would no longer get financing, and would not discuss when the process will be completed.

However, the Wall Street Journal reported that about 60% of Chrysler’s remaining 2,400 dealers applied for wholesale financing with GMAC, and about 6% have been informed that their wholesale financing has been temporarily suspended.

“We offer financing for qualified dealers and consumers,” Coggins added. “GMAC is committed to being part of the solution to stabilizing the U.S. auto industry.”

Cavuto: Two Czars for Cars

Missed Tuesday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

This has gotta be serious.

Now we have "two" car czars.

Here's the deal...

Steve, meet Ed.

Because it's more fun than just one.

Two czars for cars are better than one czar for cars.

After all, there are a lot of cars. Might as well have at least a couple of czars.

We don't know where Steve Rattner's been hiding, but it's apparently far away from anything closely resembling a camera...Because pictures are few, and apparently Steve is lonely.

And now Steve has a friend...Ed.

Ed Montgomery, who'll also be looking under the hood.

Even though no less than Lee Iacocca told me just yesterday he wonders whether any of these guys knows what the heck is under that hood.

Before you think that's just lee being ornery, think about from where lee is coming.

The guy who spearheaded the last auto rescue...Back in 1980 for a measly one billion bucks...But all of it, and then some, paid back and with interest, and early at that.

Lee taking pains to say the big difference back then to what is going on now....is the government wasn't getting in the auto business back then, it all but owns it now.

And as Lee points out, czars don't know much about cars.

In 1980, even a reluctant government knew that and gave the wheel to Lee, the auto guy.

Nearly three decades later, they're taking the wheel away from anyone even resembling an auto guy.

I've said it before, I’ll say it again.

The last czar didn't do too well.

We don't need 16 of 'em to compound the point.