Last December the US House passed a financial reforms bill intended to fix the badly broken big financial firms and banks that nearly crashed the entire US economy and cost millions of people their jobs and retirement plans. Now the US Senate has joined in, but not without an angry fight.
When the US House passed the bill, tons of people and "analysts" said that the Senate would never go along with it. But after the military joined in the request for help to protect soldiers who were being ripped off by the same financial "products" that cost every day people too, the Senate gave in.
And the biggest rip off's affecting the military soldiers who stand on the line for all of us? Car dealers. That's right, car dealers.
Most people don't realize it but about 80% of the cars they sell are financed by the dealer and then the finance contract is sold off to those same big banks and investment companies at high interest rates that cost everyone thousands of dollars in excess charges that spell gouging. The excess charges come in the form of needlessly high interest rates (not everyone deserves a "subprime" loan rate), longer loans than necessary (that makes you pay more), and lots of extra things added to the sale that give little if any real benefit and which the buyer often does not even realize are being included (like prepaid maintenance plans that last longer than you'll even keep the car).
The car dealers sell the finance contracts to the banks, often as a package of loans. The banks then "securitize" them by bundling them into even larger packages that Wall Street thieves (sorry, I meant to say Wall Street investment houses and banks) buy up.
Well, the dealers didn't want their predatory financing practices to be subject to any oversight. They wanted it to keep being their form of lecherous business as usual. That's what got the military brass upset and that's what got the Senators worried, in spite of their huge donations from the car dealer lobbies.
The Senators weren't worried when it was just you and me getting ripped off. But the guys who have guns and go off to war to keep us safe? Well, that's a different thing.
Last night, in a 59 to 39 vote, the Senate passed the historic Restoring American Financial Stability Act of 2010, S. 3217. It's a major victory for American families and small businesses and should help rebuild trust in the broken financial system that allowed all of us to get ripped off. Now we'll have a new consumer watchdog, the Consumer Financial Protection Bureau, that is focused on weeding out predatory lending and making sure that corporate greed doesn't get out of control again.
Still, the car dealers haven't given up. One Senator (running for governor back home, and in need of lots of corporate donations apparently), named Brownback, tried to get a loophole into the bill that would allow car dealers to avoid the law entirely. Lobbyists have vowed to now turn their work on the "reconcile" process in conference committee where the House version of the bill has to be "reconciled" with the Senate version in order to get the new law passed. That "end run" is expected to occur Monday morning, May 24. If they win, you lose.
So if you want to reform big bankers and make car dealers be honest, now is the time to call or email your Senators today. There's an easy way to do it.
The Center for Responsible Lending has a website where you just fill out your name, etc, and they'll send an email to your Senator saying that you want strong financial reform now and you want every one included, including car dealers.
Go to this link to tell your Senator you want the law to protect you:
https://www.responsiblelending.org and look for the "TAKE ACTION" section where you'll see the link called "Senators: Are You for Wall Street or All Americans?" Click it and then just fill out the form.
Doing it only means keeping bad businesses a little more honest, so that good businesses can compete with them on a level playing field. That means a better deal for you.