Citibank's "tough patooties" customer service charter

Adam Schwab writes:

CITIBANK, GAIL KELLY, GOLDMAN SACHS, MIKE SMITH

In an uncharacteristic display of appreciation, Citibank boss Vikram Pandit thanked US taxpayers for bailing out the world's once biggest financial institution. Pandit told lawmakers that "Citi owes a large debt of gratitude to American taxpayers [with the bailout money building] a bridge over the crisis to a sound footing on the other side."

However, as the LA Times reported, Citibank showed those same taxpayers just how thankful it was by "slapping a $60 annual fee on many credit cards that previously had no fees and telling customers that if they don't like it, tough patooties".

Admittedly, Citi is far from the only bank acting with questionable morality - as the brilliant Matt Taibbi detailed in this month's Rolling Stone, "the nation's six largest banks - all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry - set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007." (It is somewhat ironic that arguably the articles about Wall Street's banks have been written by a journalist who writes for a music magazine described as "revolutionary, wild and unpredictable").

Taibbi (who previously described Goldman Sachs as a "great vampire squid wrapped around the face of humanity" described the schemes used by the banks to boost short term profits and maximise bonuses paid to staff since the onset of the credit crunch. Taibbi noted:

The bottom line is that banks like Goldman have learned absolutely nothing from the global economic meltdown. In fact, they're back conniving and playing speculative long shots in force - only this time with the full financial support of the US government. In the process, they're rapidly re-creating the conditions for another crash, with the same actors once again playing the same crazy games of financial chicken with the same toxic assets as before.

From the "swoop and squat" (which involved banks such as Goldman Sachs selling sub-prime mortgages to clients and then taking CDO "insurance policies" with AIG by betting against those very instruments) to the "pig in the poke", which relied on recent changes to accounting rules allowing banks avoid reporting losses on dud investments until they are eventually sold.