Combative Banker, Agency Owner Faces State Suits Over Credit Cards

Americans with shaky credit have been good to Rocco Abessinio. His privately owned bank has earned half a billion dollars in eight years of providing credit cards to people who couldn’t get one elsewhere, either because of past bankruptcies, loan delinquencies or simply inadequate income.

Now Mr. Abessinio is in a fight with government authorities over how he treats his customers. Attorneys general of a half-dozen states have filed civil suits alleging that his business misled customers about terms and fees or engaged in abusive collection practices. Unlike many bankers accused of wrongdoing who settle quietly, the combative Mr. Abessinio has punched back, denouncing his critics and in one state making his fight a political matter.

Truck driver Charles Berry of MacArthur, W.Va. — behind in paying his credit-card balance — authorized Mr. Abessinio’s collection arm to withdraw some cash from his bank account to make a payment. But then collection agents made three more electronic withdrawals without his knowledge, Mr. Berry later said in a sworn statement, which is part of the West Virginia attorney general’s suit against Mr. Abessinio, his bank and its collection affiliate. Mr. Berry — whose wife, Tedda, also was behind in paying on her credit card from Mr. Abessinio’s Cross Country Bank — said collectors started calling four or five times a day.

Mr. Abessinio’s company says that it didn’t call as frequently as Mr. Berry claims, and has no record he ever complained about unauthorized withdrawals. Former employees who’ve described abusive collection practices “lied,” Mr. Abessinio said in an interview, “and we know that a lot of these customers lie.”

In West Virginia, rather than accede to the state’s terms for a settlement, his collection firm announced it would shut down a center that employs more than 550 people in a job-hungry community. This fall, with the attorney general in a re-election campaign, the dispute turned into a political football. The collection firm paid to bus employees to the capital for a rally where the attorney general was criticized, and an election foe seized on the issue to label him antibusiness.

State officials “are attempting to extort us,” Mr. Abessinio told a radio interviewer in October.

The banker’s battle opens a window into “deep subprime” credit-card lending, the business of offering cards to people with abysmal credit scores. This is the low end of a “subprime” universe of about 40 million consumers. At the end of last year, according to data firm CardWeb.com, the bank had $1.5 billion in credit outstanding to two million cardholders.

For this complete story, please visit Combative Banker, Agency Owner Faces State Suits Over Credit Cards.