UK Banks 'Milk Borrowers' to Pay for Credit Crunch

Banks hike mortgage payments despite interest rate cuts
By Rob Quinn,  Newser Staff
Posted Aug 23, 2008 7:19 PM CDT
UK Banks 'Milk Borrowers' to Pay for Credit Crunch
A sign for a branch of Halifax bank, part of the HBOS group, is seen backdropped by St. Paul's Cathedral, in central London, Thursday, July 31, 2008.    (AP Photo/Sang Tan)

Britain's big banks are being accused of hoisting nearly £3 billion in interest payments on customers to make up for bad bank investments, the Daily Mail reports. Seeking to recoup huge losses from assets linked to subprime US mortgages, the banks have hiked mortgage rates and fees despite interest rate cuts that make it easier for banks to borrow.

"The banks are milking overstretched families to make up for their previous mistakes," said a Liberal Democrat spokesman. The banks, recently given a $100 billion government lifeline, are raking in nearly $6 billion more from customers than a year ago. A Halifax spokeswoman denied the bank was using the credit crisis as a smokescreen to gouge customers, saying it was merely pricing in line with the market.
(Read more United Kingdom stories.)

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