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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Corker Shills for Payday Lenders

| Wed Mar. 10, 2010 9:16 AM EST

Sen. Bob Corker (R-Tenn.), the top GOP negotiator in the Senate's arduous financial-reform talks, is doing the dirty work for one of the dirtiest of financial industries: payday lending. Corker, the New York Times reports today, is pushing hard to throw a loophole in Senate banking committee's bill for the payday lending industry—essentially a form of loan sharking—to blunt any new oversight. The move sets up a potential showdown with Sen. Chris Dodd (D-Conn.), banking committee chair and leader of the financial-reform talks, whose November draft of legislation empowered a new, independent consumer-protection agency to crack down on payday lenders, among other non-banking institutions.

According to the Times, while a consumer agency tentatively agreed to by Dodd and Corker might be able to write new regulations for payday lenders, it would have to consult with other regulators to enforce those rules. Consumer advocates have repeatedly said gutting a consumer agency's rule-enforcement power would kneecap the new agency and limit its usefulness. And if the Senate goes lightly on the payday lending industry, it's likely to set up a battle between the House—whose bill last winter called for new oversight of the industry—and the Senate when the two try to merge their bill.

Corker's support for the payday lending industry is no surprise given the power the industry wields in his home state. The main trade group for payday lenders, the Community Financial Services Association, was founded in Tennessee in 1999, and has donated $1,000 to Corker. Corker has also received thousands more in donations from other heavy-hitters in the payday lending business, like $6,500 from the founders of Advance America, a leading payday lender. And overall, the industry's lobbying efforts almost tripled between 2005 and 2008 to maintain lax regulation of their industry, while at the same time business is booming for payday lenders. Especially with all those unemployed workers to prey on.

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GOP: Aim Low on Wall St. Reform

| Tue Mar. 9, 2010 3:41 PM EST

That's the message coming from the GOP's lead negotiator in the Senate on a new Wall Street crackdown. Today Sen. Bob Corker (R-Tenn.), on CNBC to talk about the state of play in the Senate banking committee's financial-reform negotiations, said no one should get their hopes up for a bill that tackles all parts of the financial-reform equation. "I don't think we oughta try to pass legislation that solves every problem in the world," Corker said. "I think when we do that we end up with things like [what] is happening right now with health care reform." The junior senator from Tennessee added that a "middle of the road"—not too far to the left or the right—and "very solid" bill was the best outcome for the Senate banking committee, which has been embroiled in financial-reform talks for months now. (Below is the CNBC video, with more after it.)

On the one hand, Corker makes a fair point. Politics is compromise, and if the Democrats and Republicans on the banking committee try to inject their own ideologies into financial reform, we'll still be waiting for the banking committee to release a bill in November. That said, a crisis, to borrow the well-worn adage, is a terrible thing to waste, and the financial crisis of 2008 and 2009 offered a once-in-a-generation opportunity for lawmakers to put aside partisan differences and pass a comprehensive, historic bill. That bill would do away with the government's implicit bailout guarantee, protect consumers, shed some light on the derivatives industry, and try to end what Simon Johnson, former IMF chief economist, has called the "doom cycle."

That window of opportunity, however, looks to have passed. Odds are, if and when the dust settles and a financial-reform bill lands on President Obama's desk, that legislation will do far less than originally anticipated and possibly represent a victory for the financial services community. Sen. Corker's comments today are further confirmation (if you needed more) that any chances of a major overhaul have disappeared.

DoD Enters Consumer Agency Fray

| Tue Mar. 9, 2010 2:01 PM EST

You know the fight for financial reform has truly hit a fever pitch when the Defense Department, the monolith of the US government, has entered the ring. Not to be outdone by auto-industry lobbyists, the Pentagon has begun to lobby the Senate banking committee to convince them, including chairman Sen. Chris Dodd (D-Conn.), that any new consumer-protection agency should oversee auto dealers as well as banks and non-banking companies like subprime mortgage lenders, Politico reports. The DoD insists that any new consumer agency regulate dealers due to numerous reports of car salesmen preying on members of the military—a tactic Mother Jones' own Stephanie Mencimer reported in detail on last summer. And because the House's version of financial-reform exempted auto dealers from a consumer agency's oversight, the DoD is pushing hard to make sure the Senate doesn't include the same loophole.

The Pentagon's push came most notably in a February 26 letter from Clifford Stanley, an undersecretary of defense, citing auto dealers' "unscrupulous" practices toward members of the military. A consumer advocate added, "Predatory lending affects our military preparedness...It explains that this is not just some liberal position." A spokesman from the National Automotive Dealers Association told Politico that the practices decried by the DoD are already outlawed, and that a new consumer agency would only increase bureaucratic bloat in Washington. "Creating new regulatory mandates on top of existing federal and state statutes will likely drive up costs, limit vehicle financing options and, for many consumers including service members, effectively eliminate their ability to obtain financing to meet their vehicle need," the spokesman said.

Heidi Montag for Consumer Protection!

| Tue Mar. 9, 2010 1:08 PM EST

Yes, you read that correctly. The movement for a strong, independent consumer-protection agency has officially reached quasi-celebrity status. Heidi Montag, the reality TV mainstay and failed pop singer, is in a new, tongue-in-cheek video stumping for an independent consumer-protection agency as Congress' financial-reform talks slog on. The video, put together by the online humor site Funny or Die and Americans for Financial Reform, shows Montag poking fun at her recent plastic-surgery marathon while decrying the predatory practices of credit-card companies at the same time ("With hidden fees and standard interest-rate increases, that $11,000 jawline could end up costing you upwards of $50,000"). Now, I'm no celebrity gossip fan, and have no patience for people famous for no discernable reason whatsoever, but this video is clever, pretty damn funny, and worth watching. Here it is:

 


Incarceration in the Age of Obama

| Mon Mar. 8, 2010 3:51 PM EST

California is, as the time-worn adage has it, our nation's bellwether, and nowhere is that truer than in the Golden State's prison crisis. California's inmate population is among the highest in the nation. Its complex of prisons spills over with tens of thousands of inmates housed in every available inch of space and sleep-stacked three-high. So overcrowded are California's prisons that the state penal system has been successfully sued for violating the constitutional rights of inmates—essentially by subjecting them to a public-health crisis. That its inmates consistently resort to violence in prison should come as no surprise.

The dire state of California's prisons can, in part, be traced to its draconian "three-strikes law," which throws three-time felons behind bars for a mandatory 25 years. Overflowing prison populations have, in turn, contributed to that state's bleak economic future, helping consign California to a perpetual budget deficit, annual financial crises, and repeated deep cuts in education and social funding. The state currently spends a staggering 10% of its annual operating budget, or $10.8 billion, on its prison system and its nearly 170,000 prisoners—more than it spends on the University of California system, once the jewel in the crown of American public higher education.


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