Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Guardian, Men's Journal, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

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House Reps Shill for Car Salesmen

| Tue Jun. 22, 2010 9:49 AM EDT

[UPDATE]: The Senate today accepted the House's exemption for car dealers from oversight by a new Consumer Financial Protection Bureau. The two leaders of the House-Senate conference process—Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.)—opposed the exemption, but acceded to colleagues who had pushed hard for the exemption.

Of all the special interest groups swarming Washington's financial reform debate, you could argue that the award for Most Pesky belongs to the auto dealer lobby. For the past year, auto dealers and their water-carriers on Capitol Hill have vehemently opposed new oversight and regulation under the proposed Consumer Financial Protection Bureau, whose jurisdiction would include mortgage brokers, payday lenders, and other businesses that lend money to consumers. Auto dealers make up 80 percent of the nation's automotive loans. Nevertheless, in the House's reform bill, they succeeded in winning an exemption from the bureau's oversight. (The Senate did not exempt them.) Now, in the latest announcement by top House members trying to reconcile the House and Senate's respective bills, the House is offering an amendment that would ensure dealers are exempt from oversight in the final bill.

If any type of retailer and/or lender cries out for new oversight, it's auto dealers. In 2009, dealer-related complaints ranked fourth-highest among all types of consumer-based complaints, at 26,019, after cell phone service companies, TV companies, and—big surprise—banks. The Center for Responsible Lending has reported that dealers frequently peddle higher interest rates to customers than would a regular bank, and that these "markups" amount to an extra $20 billion a year for consumers.

Throughout the past year's reform fight, groups ranging from the Navy Marine Corps Relief Society and the National Consumer Law Center have pushed hard to include dealers in any new consumer bureau's purview. (The military is especially active on dealer regulation because, as Mother Jones' Stephanie Mencimer has reported, shady dealers often prey on vulnerable servicemen and -women.) In a May letter to Sen. Sam Brownback (R-Kan.), who had sought an exemption for dealers in the Senate's bill, military and consumer advocacy groups wrote:

For example, some car dealers engage in "powerbooking," a scam in which the victim does not have access to the documents the dealer submits to the finance company and therefore has no knowledge of the phantom add-ons the auto dealer claims are part of the vehicle. Some dealers falsify loan applications, in which case the victim does not have access to the loan documents that falsifies pay stubs and statements of income. In another scam, the auto dealer promises to pay off the lien on the victim’s trade-in at the time of sale, but does not, so the consumer is unknowingly left with the responsibility to pay off the new car as well as the car that was traded in. There is no way for the victim to know in advance that the dealer doesn’t intend to pay off the lien. Senator Brownback’s modified amendment would do nothing to stop these abuses.

The House and Senate's new consumer protection bureau was created, lawmakers have said, to reign practices like powerbooking and auto lien fraud. Even President Obama has personally stepped in to fend off an auto-dealer exemption, saying in May, "The fact is, auto dealer-lenders make nearly 80 percent of the automobile loans in our country, and these lenders should be subject to the same standards as any local or community bank that provides loans." The House conferees, who meet again this week to hash out differences in their reform bill, apparently don't agree.

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Crist's Rogue Gamble Paying Off?

| Mon Jun. 21, 2010 10:20 AM EDT

Charlie Crist's own version of "going rogue," of ditching the Republican Party and running for US Senate as an independent candidate, looks more shrewd by the day. Pilloried for abandoning the GOP that helped elect him Florida governor, Crist has now jumped out to a double-digit lead in Florida's Senate race, pulling away from Democrat Kendrick Meek and Republican Marco Rubio, a Tea Party favorite. A new poll by the Florida Chamber of Commerce and Cherry Communications shows Crist with 42 percent backing, Rubio with 31 percent, and Meek with a measly 14 percent.

Crist's 11 percent lead over Rubio is by far his largest since ditching the GOP in late April. After declaring himself an independent, Crist has steadily built up his advantage over Rubio, who by contrast has slipped in the polls and was even named "Loser of the Week" by the St. Petersberg Times this weekend. A couple of financial ethics mini-scandals by Rubio, including double-billing taxpayers for travel costs, have contributed to the Tea Party rockstar's waning popularity.

Chamber Targeting Next Finance Battle

| Mon Jun. 21, 2010 8:20 AM EDT

As early as this week, top members of the House and Senate will hash out a final agreement on merging the two chambers' financial reform bills. Led by Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.), this "conference" process will soon produce a compromise—and, potentially, compromised—bill that seeks to prevent the kinds of abuses that brought the economy to it knees by rejiggering how Wall Street does business. But even before a conference compromise has been reached and a final bill sent to President Obama, lobbying powerhouses like the Chamber of Commerce are already plotting their attacks on the next phase of financial reform—making 1,600 pages of arcane law a reality.

Bloomberg reports that according to a Chamber analysis, the bill could require as many as 399 new rulemakings and 47 new studies, on everything from consumer protection to eliminating debit card "swipe" fees to making big banks cut off their riskiest investment outfits. Which is to say, once the bill passes, there's going to be a whole lot of jostling and lobbying and pressure on regulators, the ones implementing the bill, to weaken new reforms and spare banks the toughest changes. Even the subtlest of regulatory tweaks could mean billions of dollars kept or lost by the country's biggest banks. Here's Bloomberg:

The direction from Congress in the legislation is broad: The consumer agency is to police “covered persons,” or any person offering or providing a consumer financial product or service. Some of the “covered persons” are defined in the bill, while others aren’t.

For example, the agency would regulate mortgage brokers and anyone who is a “larger participant of a market for other consumer financial products or services.” In the rule-writing, the agency would have to determine exactly what a “larger participant” is.

"It’s all on-the-blackboard stuff until you get to the regs," said Wayne Abernathy, a former Treasury official who is now an executive vice president at the American Bankers Association. "That's when it becomes real life."

For Sale: Florida Gov, Senate Seats

| Fri Jun. 11, 2010 10:51 AM EDT

Weeks ago, political aspirants Rick Scott and Jeff Greene were long shots, outsiders, no-names. Scott is a Florida Republican running for governor, Greene a Florida Democrat running for US Senate. But Scott and Greene have something in common, a shared trait that's propelling both men toward success in the Sunshine State: They're stinking rich, and spending freely to boost their candidacies.

Their strategy looks to be working. A new Quinnipiac University poll shows both Scott and Greene leapfrogging their opponents in public support. After entering the race two months ago with meager public support and little name recognition, Scott now boasts 44 percent of support among Republican voters. That's a 13-point lead over his challenger, Florida Attorney General Bill McCollum. (24 percent of Republican voters are undecided, the poll shows.) McCollum has the backing of the GOP establishment, and was considered the frontrunner until today's poll. How, you ask, has the underdog surged so fast? So far, Scott, a former hospital CEO, has spent more than $12.5 million on his campaign, including a wave of ads plugging his support for an Arizona-like immigration law in Florida. McCollum has spent just $805,000.

White Newborns Soon the Minority

| Fri Jun. 11, 2010 9:08 AM EDT

The day when the majority of newborns in the US are nonwhite minorities is almost here. The Wall Street Journal reports today that, between July 2008 and July 2009, the percentage of minority newborns in this country jumped from 46.8 percent to 48.6 percent. That likely means the point at which minority newborns are 50 percent or more of all US-born kids is almost here, if it hasn't occurred already.

It's also a reminder of the major demographic shift in this country, in which all whites cease to be the majority, replaced instead by a "majority minority." Here's the Journal on this:

"The question is just when," said Kenneth Johnson, senior demographer at the Carsey Institute at the University of New Hampshire. He guesses the milestone will be crossed in the next few years, and could happen as early as 2011...

A number of forces are pushing the US toward a "majority minority" future. The median age of the white population is older than that of nonwhites, and thus a larger share of minority women are in prime child-bearing years. In addition, white women are having fewer children than nonwhites, while the growth in mixed marriages has led to more multiracial births.

Right now, minorities in toto comprise around 35 percent of the US population, up from 30 percent in 2000, according to Census data, which means the white majority will remain for a few decades more. (In 2008, the Census predicted a nationwide majority-minority by 2050.) Already, though, four states—Hawaii, Texas, California, and New Mexico—have majority-minority populations. This, of course, is the context for the nation's increasingly fraught immigration debate, with states like Arizona pitted against the Obama administration and more left-leaning immigration reformers. The battle will only grow more feverish, as other states like Michigan try to pass Arizona-like immigration bills of their own.

For future political candidates, this demographic shift is a stark reminder of who they'll need to court if they want to be elected. With that in mind, you've got to wonder if immigration crackdowns like Arizona's law won't soon be a political suicide for the politicians backing them.

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