David and Two Goliaths

[Rajiv]

David and Two Goliaths

A Sebastopol boot maker takes on Citibank and the U.S. government over the legalities of credit card debt

On a warm October morning, Michael Carnacchi stands respectfully in the Sonoma County Civil Court as his case, Carnacchi v. Citibank, is called. A boot maker by trade, on this day he sports a black suit and tie, and his hair is neatly kept back into a waist-length ponytail. The presiding judge, the Honorable Mark Tansil, also wears black as he sits behind an imposing desk decorated with a tiny pumpkin. A uniformed deputy sits nearby, watching the proceedings attentively. Carnacchi is petitioning to change his civil suit to a federal case. The judge asks him if he has a lawyer and when told "no," asks if Carnacchi is a lawyer or has ever studied law.

"I'm representing myself, your honor," Carnacchi replies. "I've spent thousands of hours studying the subject."

Judge Tansil smiles. "Thousands of hours?" "Yes, your honor," Carnacchi replies. "Thousands of hours?" the judge repeats.

"OK, hundreds of hours," Carnacchi admits, to smiles all around.

In representing himself, Michael Carnacchi must have a sense of humor, the ability to adapt quickly and an obsession for his cause. His case is one of many that are repeatedly reported in the daily papers—credit card debt and credit card companies' egregious mismanagement of their clients' accounts. But his case differs dramatically in one major aspect: Carnacchi is actively fighting these injustices.

"Michael is pushing a big boulder up a steep hill," says Alan Cone, a civil practice attorney who finds Carnacchi's case fascinating. "He's bright as hell, reads tons and prepares his documents well. He has passion, intelligence and a supportable, ingenious argument. And he's defending himself in court, which is incredibly difficult to do."

And what's more, there's every indication that he might actually have a case
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[GRG55]

Re: David and Two Goliaths

David and Two Goliaths

A Sebastopol boot maker takes on Citibank and the U.S. government over the legalities of credit card debt

It starts with individual actions, aggregates up into more collective actions, and with persistance in due course the people begin to make real progress to take back their Republic...

[cjppjc]

Re: David and Two Goliaths

It starts with individual actions, aggregates up into more collective actions, and with persistance in due course the people begin to make real progress to take back their Republic...

could not agree more.

[iyamwutiam]

Re: David and Two Goliaths

some more:
but the interesting paragraphs -(Why he thinks he can win)

Carnacchi started exploring the very core of U.S. law, the Constitution and the Bill of Rights. A section of the Eighth Amendment prohibits the federal government from imposing excessive fines, and this clause caught his interest. He noted the connection between the U.S. Treasury purchasing $45 billion of preferred stock in Citigroup and using it as collateral for the bank's bailout money. Citibank accepted the bailout under the Trouble Assets Relief Program, and the sale of the stock effectively made the federal government part owner of the bank.

Carnacchi cites a second argument against the bank's lending practices, the Racketeer Influenced and Corruption Organizations, or RICO, Act. The RICO Act was initially enacted to stop Mafia racketeering, but has spread widely through the courts by applying to other forms of corrupt moneylending practices. The RICO Act states that "a debt incurred in connection with lending money with a usurious rate at least twice the rate of the interest owed is against the law." Citibank is headquartered in South Dakota where 15 percent interest is the highest allowed by law. In charging Carnacchi 31.24 percent interest, Citibank is dunning him over twice the allotted interest rate and, he reasons, is therefore as unlawful as a mobster.

[raja]

Re: David and Two Goliaths

David and Two Goliaths

A Sebastopol boot maker takes on Citibank and the U.S. government over the legalities of credit card debt

If you want to strike back at the criminal banks, boycott them. It's the easiest and safest way to stop these bloodsucking thieves. You don't have to bankrupt yourself fighting them in court; bankrupt them by not doing business with them.

I dumped my Chase Visa Card and replaced it with a local bank Visa Debit Card, even though I was making something like $500 a year in cash-back rewards with the Chase card. That's $500 well spent, IMO.

Dump your Big Bank Credit cards; withdraw your money from the Big Banks and put it in small banks

[Milton Kuo]

Re: David and Two Goliaths

If you want to strike back at the criminal banks, boycott them. It's the easiest and safest way to stop these bloodsucking thieves. You don't have to bankrupt yourself fighting them in court; bankrupt them by not doing business with them.

I dumped my Chase Visa Card and replaced it with a local bank Visa Debit Card, even though I was making something like $500 a year in cash-back rewards with the Chase card. That's $500 well spent, IMO.

Dump your Big Bank Credit cards; withdraw your money from the Big Banks and put it in small banks

I guess I'll help you spread the word against the banks, Raja.

I stopped doing business altogether with commercial banks in 1997 and now do all of my banking with credit unions.

For those who do not know, deposits at credit unions are insured for up to $250,000 by the National Credit Union Administration (NCUA), a U.S. federal goverment agency that's analogous to the FDIC. Furthermore, credit unions are non-profit organizations and thus are not as likely to nickel-and-dime their customers to death with the dishonest fees so often associated with the commercial banks.

Being a non-profit also allows credit unions to typically pay higher interest rates on deposits and charge lower interest rates for loans. I currently have an account at a credit union that pays 1.1% and I can withdraw the entire balance at any time without penalty (i.e., it is not a CD). Up until a three months ago or so, I was getting 1.5% on this same account (thank you very much, Ben "ZIRP for the foreseeable future" Bernanke :mad:.) In addition to the higher interest rate, I am never charged any ATM fees no matter whose ATM I use.

I believe you're right, Raja, on an effective way to punish the banks in light of our elected officials doing nothing: If everyone who is upset at the banks and actually has a positive net worth (I guess there's not many of us ) were to close his accounts with the commercial banks, the deleveraging required due to the fractional reserve system would be quite disruptive to the commercial banks. Anybody remember Countrywide and GMAC offering unusually high rates for deposits?

Of course, Bernanke might just counter such a move on the part of depositors by lowering the reserve requirements to zero. :eek:

[Jim Nickerson]

Re: David and Two Goliaths

If you want to strike back at the criminal banks, boycott them. It's the easiest and safest way to stop these bloodsucking thieves. You don't have to bankrupt yourself fighting them in court; bankrupt them by not doing business with them.

I dumped my Chase Visa Card and replaced it with a local bank Visa Debit Card, even though I was making something like $500 a year in cash-back rewards with the Chase card. That's $500 well spent, IMO.

Dump your Big Bank Credit cards; withdraw your money from the Big Banks and put it in small banks

I note ole raja has added to his signature "Boycott Big Banks *** Vote Out All Incumbents."

As nearly as impossible as it might be for some ideologues to seriously consider "voting out all incumbents," if readers here think this country is in deep doodoo because of legislative capture by monied interests, doing it would send a significant message if most all career politicians got voted out of office. I don't think things are bad enough to provoke such a united effort from the proletariat (way too many people easily swayed by hearing what they think they want to hear on TV ads), but short of armed overthrow of the government, then dis-electing almost all current politicians could prove over some period of elections to be the best answer. Don't get trapped into voting for anyone claiming real change. Forget claims, just don't reelect anyone.

[sadsack]

Re: David and Two Goliaths

I note ole raja has added to his signature "Boycott Big Banks *** Vote Out All Incumbents."

As nearly as impossible as it might be for some ideologues to seriously consider "voting out all incumbents," if readers here think this country is in deep doodoo because of legislative capture by monied interests, doing it would send a significant message if most all career politicians got voted out of office.

[. . .]

Don't get trapped into voting for anyone claiming real change. Forget claims, just don't reelect anyone.

FWIW that's what I plan to do on all levels other than local (city, county). I've got a good 30-40 years of voting ahead of me, and I will take personal satisfaction in rejecting the 'bezzlers until mental incompetence claims me . . .

[aaron]

Re: David and Two Goliaths

If you want to strike back at the criminal banks, boycott them. It's the easiest and safest way to stop these bloodsucking thieves. You don't have to bankrupt yourself fighting them in court; bankrupt them by not doing business with them.

I dumped my Chase Visa Card and replaced it with a local bank Visa Debit Card, even though I was making something like $500 a year in cash-back rewards with the Chase card. That's $500 well spent, IMO.

Dump your Big Bank Credit cards; withdraw your money from the Big Banks and put it in small banks

I do not think the banks need our business or savings at this point. If Uncle Sam will give them money, why do they need ours? They make billions just by holding onto reserves. They are still getting their bonuses.

Never the less, I have done my part to close accounts with the banksters too.