There’s a bit of unfinished business happening in the Senate on the financial reform bill today. Senators will vote on two nonbinding “motions to instruct” conferees of the conference committee ironing out differences between the House and Senate versions. These nonbinding instructions would offer the sense of the Senate on how the conferees should proceed, but it in no way presumes certain language will be in the final version of the bill.
One of these motions concerns an amendment by Kay Bailey Hutchison that didn’t get a floor vote, which would weaken the already-meager restrictions on proprietary trading inherent in the bill. The other motion deals with the auto dealer exemption to the Consumer Financial Protection Agency. The White House frames this as a last stand for the lobbyists of the auto dealers, but in reality getting the exemption, which is in the House version, past the conference committee is a remote possibility regardless of the nonbinding vote. The White House strongly opposes the exemption, and has gone up to the edge of threatening a veto if such a carve-out is included. They continued to press their case today:
Is there any question that these lenders should be subject to the same standards as any local or community bank that provides loans?
Auto dealer-lenders sell auto loans to working families every single day, and while most dealers are no doubt above board, some cannot resist the bigger profits that come from inflating rates, hiding fees, and tacking on over-priced add-ons.
These profits can lead some dealers to treat their customers unfairly. There are countless stories of hard-working people who are never even contacted when their car loans are promised by dealers and then fail to go through forcing them to borrow at a higher interest rate or to swallow the cost already paid toward the purchase of their car while giving up the vehicle.
The vote today does provide an opportunity to see, in full view, who supports consumer protections and who supports auto dealers getting a free pass. Public Citizen, one of the pro-reform groups working on this effort, has a guide to which members of the Senate would be most likely to support the auto dealers on this one. And an interesting name tops the list.
So far in the 2010 election cycle, 44 senators have received $380,693 from the auto dealer industry’s employees and political action committees (PACs), according to Public Citizen’s analysis of data provided by the Center for Responsive Politics (www.opensecrets.org). The ten largest recipients – seven Republicans and three Democrats – have received more than half of the industry’s contributions to the Senate this cycle. The top two recipients are Sens. Blanche Lincoln (D-Ark.) (who has received $40,000) and Richard Burr (R-N.C.) ($31,050).
It will be fun to see whether or not Blanche Lincoln can be bought off for a mere $40,000 to exempt from federal consumer protection laws the largest financial purchase anyone makes outside of a home. Surely Bill Halter’s campaign will be watching.
We should know around 5:30pm ET.
UPDATE: Voting is happening on this right now.
…clearly this would have passed the Senate. So far, around a dozen Democrats have offered their support, including stalwarts like Barbara Boxer, Jay Rockefeller and Maria Cantwell. The Merkley-Levin second-degree amendment strategy proved to be a real savior for the CFPA’s ability to oversee predatory auto lenders.
Lincoln hasn’t voted yet, as far as I can tell, but Mark Pryor voted Yes, so I’m assuming Miss $40,000 will do so as well.
…Lots of Congresscritters are flipping their votes to Yes now that it’s clear that this will pass, and that it’s a nonbinding vote and something to prove that you’re “pro-business”. It passed 60-30. I don’t think Lincoln voted.




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What? I guess the auto dealers haven’t been big enough O contributors.
Does the Sun rise in the East?
Doesn’t FDL, esp DDay, have a wonderful collection of rhetorical Qs as post titles?
I think she’ll back anyone who puts a dollar in her G-string. (Not intended as a sexist reference, there are male strippers as well lol.)
Eight-ball says: Probably.
Sheesh, car dealers, payday lenders and their ilk. Give me an old fashioned loan shark any day. At least with a loan shark the terms are straight forward and simple. Pay up or I’ll break your leg.
I keep seeing ads on ‘structured settlement’ and ‘annuity’ lending on my TV. I suspect that’s a new (or maybe not so new) ripoff. JG Wentworth is one of them.
Kinda rhetorical, don’t you think?
I thought about including them but I don’t know enough about them. I can see where being able to sell a structured settlement or an annuity could be good thing. Depends on how bad the discount offered is.
I’ve been meaning to figure it out, so I’ve just emailed a friend who might know. Their ads are slick.
I really don’t care how she votes becuse it’s a given. I hope she only there for a few more months then back home for good.
I detest their ads.
That nasal “Do you need cash na-ow” is quite irritating.
All in all though I expect the deals to be pretty crappy. Their target demographic is likely to be desperate.
But compelling if you are in bad financial straits. That’s why I suspect they’re a ripoff.
J.G. Wentworth belongs to the class of ads that cause me to change the channel — regardless of what I am watching or listening to. That “It’s my money and I want it NOW!” grates almost as badly as Sit N’ Sleeps “or your matress is freeeeeeee!”
Actually, the answer was she didn’t vote.
Nahh loan sharks have adopted a kinder, gentler approach (avoiding violence whenever possible keeps the police off their back)…. The bust-out. Sure it drives the debtor into bankruptcy court, but eh… they were headed there anyway and since now their loan shark won’t bother killing him, win-win. :o)
The bust-out is what happens when the mob moves in to take control of a business that’s heavily indebted to a loan shark. As Black tells it, why the heck a mobster would ever want to take over a bar or liquor store in this way is incomprehensible to a classical economist. Why take over the business when you’re already getting every cent of profit and more in your weekly vig?
Except that in the real world, things don’t work that way, explains Black, a professor at the University of Missouri-Kansas City. The reason to take over the business is to loot it 1,000 ways to Sunday, from buying vast amounts of liquor on credit to, ultimately, torching the place for the insurance money.
http://www.thebigmoney.com/articles/money-trail/2010/03/19/bust-out?page=full
cool article that compares bank fraud to bust-outs.