Auto dealer regulation - A failure to compromise

Auto dealer regulation has been on the minds of House Democrats recently, or a lot more specifically a lack thereof. Their belief is that the newly formed Consumer Financial Protection Agency (CFPA) would hamper auto dealers’ ability to recuperate by limiting their ability to continue offering dealer-assisted financing. Led by New York Reps. Bill Owens and Mike McMahon, the Democrats thought that they may have achieved an acceptable bipartisan compromise – until now. Automotive News reports that an additional provision was surreptitiously inserted to the bill that would have actually expanded the CFPA’s oversight over car dealers.

{|Source for this article: Auto dealer regulation – A failure to compromise by Car Deal Expert

For auto dealer regulation, NADA is lobbying hard

The National Automobile Dealers Association (NADA) – which is the auto dealer lobby – is flexing its considerable lobbying muscles to bring lawmakers in line with the a lot more permissive House version of the auto dealer regulation bill. Kansas Republican Sen. Sam Brownback was very vocal in his opposition to Senate changes that went against what had been perceived to be “sensible bipartisan compromise.” No matter what ends up happening, compromise would go against President Obama’s direct request that no special exceptions be made when it comes to the CFPA’s jurisdiction.

Christ Dodd delivers on what Obama wants

As crafted by Democratic Sen. Chris Dodd of Connecticut, the proposed auto dealer regulation would allow the CFPA to write binding rules that car dealers would have to follow regarding “credit discrimination, credit disclosure, financial privacy and credit-report accuracy,” as reported by Automotive News. NADA spokesman Bailey Woods disparaged the altered Senate version of the auto dealer regulation bill, claiming that it would it a lot more difficult for “millions of Americans (to discover) an affordable way to finance a vehicle.”

Practices that are unfair and deceptive

Ridding the industry of deceptive practices is the essence of the Dodd bill, which NADA finds totally untenable. Last month, Brownback’s proposal to grant dealer exemption from CFPA regulation had been approved 60-30 as “a non-binding recommendation to Senate negotiators,” according to Automotive News. Today a vote for either House or Senate approach occurs. By early next week, the version will leave committee and go to the House and Senate for final approval. The final step could be to obtain the president’s signature. What will end up being within the future for America's auto dealers?

More information on this topic

Automotive News (subscription may be required)

autonews.com/apps/pbcs.dll/article?AID=/20100623/RETAIL07/100629945/1203

Sam Brownback views auto dealer regulation as anti-small business:

youtube.com/watch?v=jv8lgKa_yAA

Consumers win big with Financial reform bill agreement

Friday, congressional negotiators announced a financial reform bill agreement. Next week the house and Senate will vote on it. If it passes, the financial reform bill changes most of the rules that form the relationship between financial institutions and consumers. Some call the financial reform bill a big win for consumers. Others call the bill a big shaft for consumers.

Resource for this article: Financial reform bill agreement touted as a big win for consumers by Personal Money Store

Protection agency that is new

The financial reform bill gives all of its consumers a brand new agency to watch out for their interests. The Consumer Financial Protection Bureau will write rules and loan products to keep consumers safe. Business Week reports that Democrats defeated Republican efforts to scale back the powers of the proposed consumer agency. But the financial reform bill sets up an independent bureau with independent funding. It will be part of the Federal Reserve and has the power to write rules banning abusive practices in credit-card and mortgage lending.

Consumers hurt by Fiduciary standards?

A provision in the financial reform bill that requires brokers to abide by a fiduciary standard when they give any kind of investment advice has those in that industry crying foul. David Loeper of Forbes says that part of the financial reform bill might just hurt the protection of consumers. He feels that way because the bill requires brokers to be held to a fiduciary standard enforced by the Securities and Exchange Commission, just as investment advisers are today. According to Loeper, that means consumers won’t be able to tell the difference between brokers and investment advisers. Apparently he thinks that being able to trust both species equally isn’t such a good thing.

Oversight is consumer agency consolidation

The financial reform bill’s Bureau of Consumer Financial Protection would consolidate oversight of a wide variety of financial products, including mortgages, credit cards and payday loans. ABC News reports that responsibility for these areas seems to be currently scattered across a variety of government agencies. Experts explain that creating a single supervisor will help make financial products easier to understand and not take unfair advantage of borrowers.

Consumer protection leadership

The consumer Financial Protection Bureau was designed by Elizabeth Warren, a Harvard Professor who is now a chairwoman of the congressional oversight panel for the Troubled Asset Relief Program (or TARP), the $700 billion government bailout of the financial industry. Democratic Senator Sherrod Brown who is of Ohio told Business week that he “would love” to see Warren appointed to head the agency. Brown said he knew people who wanted Warren to be in charge.

Don't dare mess with Elizabeth Warren

Warren, who specializes in bankruptcy and consumer law, called for regulations to limit credit-card contracts to a short, easy-to-read document, curb bank overdraft fees and make online credit scores free. In an interview with USA Today she said:

“I discovered the extent to which the business model of selling debt to middle-class families has changed over the past 20 years. The credit card companies and other lenders moved to a tricks and traps pricing model. The fees, the interest rate hikes and all the other surprises in the fine print have left families increasingly vulnerable. I watched hardworking, play-by-the-rules middle-class families collapse financially, and that led me to study the consumer credit market and eventually to the idea behind the consumer financial protection agency.”

Find more information on this topic

Business Week

businessweek.com/news/2010-06-22/warren-should-head-new-consumer-agency-brown-says.html

Forbes

blogs.forbes.com/investor/2010/06/25/financial-reform-bill-will-shaft-consumers/

ABC News

abcnews.go.com/Business/article/financial-reform-bill-means-big-consumers/story?id=11012343&page=1

USA Today

usatoday.com/money/companies/regulation/2010-06-24-warren24_ST_N.htm

Lobbyists argue to deteriorate new mortgage guidelines in financial reform

The U.S. House and Senate will begin on refining mortgage legislation Tuesday. The legislation would enforce the largest overhaul to mortgage lending rules in many years. The mortgage legislation, part of the financial reform bill, is supposed to end the risky lending practices blamed for causing the economic crisis. Mortgage industry lobbyists are trying to take the teeth out of provisions that would protect consumers and limit the industry’s ability to find loopholes in underwriting standards.

Source for this article: Lobbyists fight to weaken new mortgage rules in financial reform by Personal Money Store

Preventing one more financial crisis with mortgage rules

Proposed changes to some mortgage lending rules contain new rules for loan repayment, the ability to sue your lender for some poorly underwritten mortgages, revised appraisal rules and rules about how much risk lenders must share on the loans they sell to investors. Housing Watch reports that many of these rules will affect how expensive mortgages will be and what types of mortgages could be offered by lenders. One of the key new rules mortgage industry lobbyists want to undermine needs many of the lenders to hold a 5 percent stake in loans that are bundled and sold with other loans. Those bundles are the mortgage-backed securities that caused the financial disaster.

Will the lenders of mortgages try and behave?

With mortgage legislation that calls for lenders to hold a stake, the idea is that they’ll act more professionally with their underwriting. When lenders sold their risk along with their loans, they were very careless and handed out numerous loans which were certainly going to default. The Wall Street Journal reports that mortgage industry lobbyists want to exempt mortgages from the 5 percent risk-retention requirement if the loans fully document a borrower’s income and assets and do not include interest-only payments, negative amortization or balloon payments. Exempt loans would also have to cap certain mortgage-origination fees somewhere near 3 percent of the loan.

Mortgages that are a lot more expensive with new rules?

Banks say new mortgage lending rules about risk retention are going to make mortgages more costly for consumers because banks could be required to hold a lot more capital, a challenge for smaller lenders. But Housing Watch said the consumer groups support “encouraging the market” to sell safer products. New mortgage lending rules can make more paperwork for borrowers, but they already push many paper trying to get loans in today’s constricted credit markets. More diligence from banks about completely verifying a borrower’s income to prevent default should be good for everyone.

Finding a way to protect borrowers from predators

New mortgage lending rules also include compensation guidelines that prevent lenders from making a lot more money by making riskier loans. This provision of the financial reform bill would bar lender-paid commissions that are based upon mostly on the rate or type of loan. It was reported by the Wall Street Journal that brokers say the rule would make it harder for them to compete with banks, reduce competition and raise costs for consumers. Consumer advocates say the changes will make it easier for borrowers to shop for loans and compare prices. Barry Zigas, director of housing policy for the Consumer Federation of The United States told the Journal that the new provisions will shift the burden of proof “from the consumers having to protect themselves from unreasonable fees to the providers of services justifying their costs.”

Mortgage lenders being saved from themselves

Other new mortgage rules that industry lobbyists are trying to fight consist of limiting the fees mortgage lenders charge if a borrower refinances the loan or pays it off early. They also don’t like the rule that needs them to prove that it is likely to be in the borrower’s best interest to finance a loan, instead of just pushing a new loan to benefit from additional fees or commissions. Finally, mortgage lenders really just don't want borrowers to be able to sue them if they violate the new mortgage rules. According to Industry lobbyists this would make buying mortgages too risky for investors.

Read more on this topic here

Housing Watch

housingwatch.com/2010/06/21/new-mortgage-rules-may-hurt-borrowers/

Wall Street Journal

online.wsj.com/article/SB10001424052748704050804575318753964100106.html?mod=googlenews_wsj

No cash in divorce case – Elon Must of Tesla, Space X and Iron Man

Elon Musk, the high flying tech entrepreneur, is broke. But is he? Musk, who is the man behind such cutting edge companies as PayPal, Tesla Motors and Space X, said he was out of cash and living on personal loan when his wife filed for divorce. After he ran off with an actress, Mrs. Musk wants to slice off a chunk of Mr. Musk’s empire.

Article Resource: Elon Musk of Tesla, Space X and Iron Man – no cash in divorce case

Elon Musk – divorce won’t cramp his style

Elon Musk — Space X rocket scientist and also the Tesla Motors mogul, was used as a role model for Robert Downey Jr. in his portrayal of industrialist Tony Stark of the Iron Man movie franchise — seems to have it all. But it was reported by the New York Times that Musk, finding himself within the middle of a divorce, says his bank account is empty. He says he invested each cent of his money in his companies and is living off loans from his wealthy friends. He subsists, according to court filings, on a mere $200,000 a month. Nevertheless, he nevertheless seems to have his private jet.

Elon Musk is the Iron Man of tech

Elon Musk, who graced “Iron Man 2″ in a cameo role, may be broke, but in the world of the super rich, the term is relative. On June 4 his company Space X conducted a successful launch of the Falcon 9, a rocket he helped design, which brings the company closer to a $1.6 billion contract with NASA. Tesla Motors, the $100,000 electric sports car business he founded, just won a $50 million investment that came from Toyota and is scheduled to hold an initial public offering of stock that is expected to value the business at about $1.4 billion.

Divorce wanted by Justine Musk

After Musk ran off with actress Talulah Riley, his wife, fantasy novelist Justine Musk, filed for divorce. As outlined by Autoevolution, Mrs. Musk wants the house, alimony, child support and $6 million cash. She also wants a chunk of Musk's stock in SpaceX. In a post on her blog titled “Golddigging,” she wrote:

“For those who want to know the extent of my golddigging, this is what I asked for, from my ex-husband and the father of my five kids Elon Musk, who is a billionaire and likely to become one of the wealthiest men on the planet. Is that what I deserve? I do not know. Who exactly deserves that kind of wealth? But based on our life and history together, is that reasonable? I think so."

Elon Musk has assets, not cash

In his finances, he wasn't always strained. According to VentureBeat, in documents filed in the divorce case, Musk made $9.6 million in 2008; he made an average of $17.2 million per year from 2005 to 2008. As of Dec. 31, 2008, he also had extensive holdings that were in venture capital and private equity partnerships. The partnerships aren't considered liquid assets. It might take months to get cash given that buyers have to be willing to take the risk.

A lot more data on this topic
New York Times

dealbook.blogs.nytimes.com/2010/06/22/sorkin-elon-musk-of-paypal-and-tesla-fame-is-broke/

Autoevolution

autoevolution.com/news/elon-musk-is-broke-21647.html

VentureBeat

venturebeat.com/2010/05/27/elon-musk-personal-finances/

What does the Sony Dash do and not do

Not quite an iPad, not quite a laptop and not quite an alarm clock, the Sony Dash is showing up at the top of a lot of Father’s Day gift lists. The Sony Dash can be probably the most interactive, yet expensive, alarm clock you will purchase. The Sony Dash can connect you to the web and run applications although it is pricey.

Resource for this article: What the Sony Dash does and doesn’t

Sony Dash features

First, the Sony Dash tech specs. The device is plug-in only (though Sony says a battery version is coming). There is a snooze button and power button on the top of it with a seven inch touch screen as well. The display has about 800 x 480 pixels. The Sony Dash features a 500 MHz processor and 256 MB of RAM. There are built-in stereo speakers and WiFi connections. The operating system of the Dash is Linux, with a Chumby-based interface.

The Sony Dash and what it does

At first glance, the Sony Dash is basically intended as an alarm clock media center. Along with Youtube videos, the Sony Dash will play Pandora and Netflix.Depending on some of the other developed applications you download, you may be able access Facebook and Twitter also.You need wireless internet access inside your house to use it. The Sony Dash is just an costly alarm without wireless internet.

What the Sony Dash doesn’t

The Sony Dash, like all good things, has limitations. It doesn't have a battery meaning it has to stay next to a power outlet. There is also no programming solution for streaming or downloading your own content; you can only stream things off the internet. Third, the Sony Dash doesn’t necessarily log you into all your favored applications; you may have to go to your Sony Dash account on a computer to do so.

Who the Sony Dash is good for

A hardcore computer user might think the Sony Dash is just an expensive toy. For individuals who use computers to take a look at pictures and watch a TV show, though, the Sony Dash may be a great option. The only major limitation is that without a pre-existing wireless internet connection, the Sony Dash is useless.

Unless you are able to discover a neighbor that is willing to share wifi with you, the device will set you back about $ 250 with connections.

The US Postal Service is looking for a vehicle replacement

All the vehicles need this to happen real badly. The automobiles were intended with a 24-year life cycle, and are simply getting old. Agency reports say that replacing the entire fleet with comparable vehicles would cost $ 4.2 billion. Is replacement the only option?

Resource for this article: U.S. Postal Service searching for vehicle replacement

Postal service LLVs

LLV stands for Long Life Autos and is the kind of truck the Postal Service uses. With daily driving, the trucks had a 24 year life cycle. That 24 year cycle is almost over. The Postal Service Inspector General has said that, over the next eight years, the Postal Service would spend a lot more repairing the vehicles than replacing them.

The price of repairing all of the USPS vehicles

In fiscal year 2009, the U.S. Postal Service spent $ 524 million on LLV repair. Generally, repairing the autos instead of replacing them has been a good financial decision. The average repair bill for each LLV is about $ 5,600, with some going as high as $ 40,000. The autos do not typically require specialized maintenance, although the right-handed driving setup can cause a lot more costly maintenance at times.

How to replace the LLV fleet

The cost to benefit comparison of continuing to repair the LLV fleet is easily turning upside down. Within the next eight years, the postal service will really lose money if it repairs rather than replaces any cars that have a repair bill that cost more than $ 3,500. It would cost $ 30,000 per truck for straight across replacement.

Testing Postal Service car alternatives

New alternatives for the Postal Service are being researched. The USPS has offered a $ 50,000 reward to five different firms for providing a working prototype of a USPS automobile by August. Letter carriers in numerous other areas are testing three-wheeled electric vehicles, bicycles, and also some more traditional minivan-style vehicles for delivering the mail, rain or shine.

Passage of climate change bill threatened by cap and trade definition

Cap and trade, by definition, is an anchor of the climate and energy bill under current debate in Congress. The cap and trade definition is elusive to most people not directly involved in utilities, petrochemicals or the manufacturing business. To understand cap and trade, think of it as a system intended to create and regulate a market for carbon, or Co2, which is really the principal greenhouse gas.

Article Resource: Cap and trade definition threatens passage of climate change bill By Personal Money Store

Cap and trade definition

The cap and trade definition within the climate and energy bill proposes the government sets a limit on the amount of carbon that could be released to the atmosphere by all of the companies. US companies are given permits allowing them to release certain amounts of carbon. Companies that emit less carbon than their permits allow can sell the unused tons of carbon on the open market. Companies with carbon emissions that exceed their permits must buy them from all of the other companies that are offering their leftovers for sale.

Cap and trade and national energy policy

Cap and trade is a controversial provision that threatens to derail the climate and energy bill if it doesn't change. While Democrats view cap and trade as a fair way to regulate pollution, Republicans say cap and trade is a tax on business that will kill jobs. With the advent of the oil spill in the Gulf of Mexico and its potential impact on national energy policy, cap and trade has become a political hot potato. So much so that President Obama avoided mentioning the term in his Oval Office speech about national energy policy that he gave on Tuesday covering the oil spill, energy legislation and also the government’s role in regulating greenhouse gases.

New limits on carbon emissions

Carbon emissions targets are nearly identical in both Senate and House versions of the climate and energy bill. PBS reports that regulated industries must reduce their carbon emissions by 17 percent (when it is being in contrast to 2005 levels) by 2020 and 83 percent by 2050. The Senate version has added a “dividend,” or rebate, approach returning some of the revenue that has been generated by trading the pollution permits back to consumers within the form of energy rebates. Those industries contain electric utilities, petrochemical refiners, manufacturing and heavy industry. Each has a deadline for entering the carbon market: utilities start at the beginning of 2013, when natural gas providers and heavy industry enter in 2016.

Arguments on cap and trade

Cap and trade legislation has generated bitter disagreements between Democrats and Republicans over the climate and energy bill. CBS News reports that cap and trade makes the future of the climate and energy bill uncertain because it will make energy a lot more costly. Both parties acknowledge that fact but disagree on just how expensive energy will get because of the bill. The U.S. Department of Treasury says the new taxes would have to be between $100 billion to $200 billion a year.

Costs of cap and trade

At the upper end of the administration’s estimate, the cost of cap and trade per American household would probably be an additional $1,761 a year. John Boehner has estimated the additional tax bill would be at $366 billion a year, or $3,100 a year per family. $1.37 trillion a year would be brought in with personal income tax. A $200 billion additional tax would be just like a 15 percent personal tax increase a year.

Benefits of cap and trade

Cap and trade is about priorities. Some see the issue in black and white: either we can reduce the rate of global warming, or protect a fragile economy. Cap and trade won't be that simple as many things aren't. Ecomil.com reports that climate and energy legislation can reduce carbon dioxide by at least 80 percent if not more of 2005 emission levels by 2050 and significantly reduce the rate of global warming. The system will even create billions of dollars for the government to spend on things they want like roads, national parks and personal checks to offset household energy costs.

Catch up with China

What numerous fear about cap and trade is that if businesses and corporations are punished for their pollution emissions, consumers will pay the price. Energy doesn’t respond to supply and demand. Utility companies can drive up prices to cover rising production costs. Meanwhile, countries like China are investing in clean energy industries of the future, when Americans sit around arguing about things like cap and trade. No solution is going to be perfect, given that any House or Senate bill is full of special-interest goodies and public giveaways to win votes. It's a good start to begin with.

Citations

PBS
pbs.org/frontlineworld/stories/carbonwatch/2010/06/the-american-power-act-cap-and-trade-20.html
CBS News
cbsnews.com/8301-504383_162-5314040-504383.html
ecomil.com
ecomii.com/ecopedia/cap-and-trade