Showdown Looms for Financial Reform

Politico
March 9, 2010
McGrane, Victoria

As the debate over financial regulatory reform heats up, the Defense Department is pushing for a new watchdog agency that will prevent auto dealers from engaging in predatory practices when selling to members of the military. Meanwhile, the Obama administration continues to lobby for a Consumer Financial Protection Agency (CFPA) that will regulate payday lenders, check-cashing stores, rent-to-own stores, auto dealers, and other financial companies; but consumer advocates believe auto dealers likely will be exempt from the final bill passed by Congress. In fact, draft legislation from Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Sen. Bob Corker (R-Tenn.) likely will exempt most nonbank entities, which critics says is a concession to Republicans and a win for the payday lending industry -- whose largest company, Check Into Cash, is headquartered in Corker's home state. Moreover, critics point out that Allan Jones -- CEO of Jones Management, the parent company of Check Into Cash -- has donated money to Corker and Dodd, among other lawmakers. Auto dealers successfully lobbied to be excluded from legislation passed by the House, but Ed Mierzwinski of U.S. PIRG says it is "outrageous" not exempt the industry from CFPA oversight. "Predatory lending affects our military preparedness," he notes, based on Defense statements that unscrupulous lending practices have kept some troops from being deployed. "It explains that this is not just some liberal position."
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