A DEMAND FOR JOINT INVESTIGATIONS BY THE ATTORNEYS GENERAL OF GEORGIA & MARYLAND INTO THE "FEE-GATHERING" "SALUTE™ VISA" CREDIT CARD PRODUCT OFFERED BY URBAN TRUST BANK OF BETHESDA, MD AND THEIR CREDIT CARD ADMINISTRATORS, THE COMPUCREDIT CORPORATION OF ATLANTA, GA.

Attorney General Thurbert E. Baker
40 Capitol Square, SW
Atlanta, Ga 30334

Attorney General Douglas E. Gansler
200 Saint Paul St # 1700
Baltimore, MD 21202

Sirs:

Whereas, American consumers owe over $800 billion in credit card debt;

Whereas, the financial sector continues to reap the consequences of the subprime debacle and banks are openly increasing interest rates and fees on their credit card customers in order to cover massive losses in other areas;

Whereas, in the midst of the worse recession in modern memory and while receiving taxpayer handouts, these lenders continue to engage in arbitrary, abusive, and unfair credit card lending practices that trap poor, disadvantaged and minority consumers in an unending cycle of costly debt;

Whereas, these inequitable credit card underwriting practices have shifted the cost of credit to the individuals least able to afford it, while at the same time generating $30 billion a year in profits - some of the highest in the entire banking sector;

Whereas, low-income families and households of color, primarily African- American and Latino, bear the brunt of the cost of credit card deregulation through excessive fees and high interest rates i.e. cardholders with household incomes below $25,000 a year are more than five times more likely than households earning $100,000 to pay interest rates in excess of 20 percent;

…it is particularly painful to make your offices aware of a subprime credit card lending scam that not only embodies every unconscionable policy referenced above, but has done so on a grand scale, seemingly unnoticed by the national media. That this fraud is being perpetuated by Urban Trust Bank, formed by African-American founder of Black Entertainment Television Bob Johnson, and a disgraced Atlanta company that has a partnership with the Southern Christian Leadership Conference is doubly ironic and shameful.

Gentlemen, lower-income American families tend to pay higher prices for nearly every basic necessity from groceries to the price of a car to the price of a mortgage. Credit cards are no different.

Compucredit, despite being sued by the FDIC and the FTC in June of last year for $217 million in deceptive fees, has continued the tradition of its infamous “Aspire™ Visa” with the “Salute™ Visa”.

Starting in early 2007, this card was marketed by direct mail by Urban Trust Bank and Compucredit to consumers with bad credit scores as a credit card with a $300 credit limit. Approved borrowers are hit with up to $185.00 in upfront fees that reduced their available credit to as little as $115.00.

Many poor people took them up on this immoral offer out of the absolute necessity of having a credit card in today’s world, despite the unbelievably usurious “fees:” $20 “account opening fee,” $150 per year “annual fee,” $72 per year “account maintenance fee, $35 “late payment fee,” $5 “internet payment fee,” etc.

Many, many honest, working people paid millions in these predatory “fees” this card “gathered” for UTB and Compucredit and did so on time in the hope of improving their credit rating.

After paying these millions in fees, what did all of these good subprime cardholders get without warning starting at the beginning of November 2008?

A letter entitled:

“NOTICE OF TERMINATION OF CARD PROGRAM

Dear -------

We must regretfully inform you that we are discontinuing your Salute Visa Gold program. Consequently, we have closed your account to new transactions and may refust to authorize any new transactions effective immediately.

Please note that even though your account will be closed to new transactions, you will remain obligated to pay us at least the minimum required payment on your existing balances and any new balances in a timely manner. If you have a balance, you will continue to receive monthly Salute Visa Gold billing statements and to be assessed an account maintenance fee as set forth in your cardholder agreement. The account maintenance fee can be avoided by paying in full your outstanding balances….”

We, the undersigned victims of this blatant, exploitative scam

a.) Question is the legality of charging a consumer monthly/annual "maintenance" fees on an account that was electively closed by the issuer – this is at best unscrupulous and at worst illegal.

b.) Respectfully request that your offices conduct complete, simultaneous investigations of both parties responsible for this latest consumer outrage with the intention of recovering some of the millions of dollars exploited from us via a class-action lawsuit such as the one already won by the Federal Government against Compucredit in the case previously mentioned.

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