TLP: Massachusetts Treasurer Pulls Out. Citi, Wells Fargo, Bank of America Disappointed
Well, Arianna must be delighted. Massachusetts is pulling millions of state dollars out of some of the country's biggest banks in a government protest of credit card rates.
The Washington Post:
State Treasurer Timothy Cahill said the state has removed Bank of America, Citi and Wells Fargo from a list of institutions approved for new state investments. Massachusetts, which is the only state to make such a move, is also beginning to divest $243 million in funds held at those banks, though the process could take up to six months.Massachusetts officials say they met with Bank of America officials to request that credit card interest rates for state residents remain under the 18 percent cap in state law. So the state said it would take its $231 million out of B of A. Massachusetts has $9 million invested with Citi and $3 million with Wells. All together, the amount being moved is a pretty slim percentage of the money the treasurer manages. And no other state has taken this kind of action.
"We want to bring some fairness into the issue," said Cahill, who is running for governor. "I don't think what we're asking is . . . out of line."
The announcement -- made at a raucous rally on Capitol Hill organized by the Metro Industrial Areas Foundation, a network of religious and citizen advocacy groups -- is part of a wave of consumer backlash over the banking industry's role in the worst financial crisis since the Great Depression. Congress has enacted sweeping credit card reforms that limit how and when issuers can raise rates and is in the midst of debating the creation of an agency dedicated to protecting consumer rights.
More from the Post:
In Massachusetts, the state treasurer has sole authority over a $7 billion fund composed of contributions from municipalities; the investments at Bank of America, Citi and Wells Fargo are part of that fund. Cahill said the state still maintains other financial relationships with those banks, such as cash management.Looks like Arianna has some more work to do.