mykeystrokes.com

"Do or Do not. There is no try."

“A New Group Whipping Up Right-Wing Fear”: Predatory Lenders Fight Regulators With Offer Of $500 Visa Gift Cards

Visitors this weekend to Townhall.com were welcomed with a pop-up advertisement soliciting a petition against the Obama administration. “Help us send 1 million letters to stop reckless regulators,” the ad beckons, atop images of President Barack Obama and Attorney General Eric Holder.

The advertisement is sponsored by Consumers for Choices, a new group whipping up right-wing anger at the Obama administration for supposedly using his “Reckless, Elitist, Overzealous Regulators” to destroy “small-dollar” and tribal lenders. Visitors to the Consumers for Choices website, which is being advertised on conservative news portals like Townhall, are encouraged to contact their local representatives to send an angry  pre-written letter. Consumers for Choices says their supporters will be automatically entered into a weekly raffle, with a grand prize $500 Visa gift card.

The advocacy website repeatedly references Western Sky Financial, an online installment loan company that recently suspended lending after being sent cease-and-desist letters from government agencies. Left unsaid on the Consumers for Choices site are the types of loans offered by the company, which feature interest rates of 355 percent.

A single $5,075 loan from Western Sky cost $40,872.72 to pay back—more than eight times the original amount.

A commercial from the company featured a Native American woman exclaiming, “Making the six monthly payments is good for your credit profile!”

New York Attorney General Eric Schneiderman recently sued Western Sky Financial, CashCall Inc. and other online lenders for violating New York state usury laws, which cap interest at 16 percent for such loans. In August, the Department of Justice began investigating a broad range of banks that handle payments for payday and installment lending companies accused of deceiving customers and charging predatory interest rates.

Regulators say predatory lenders are pairing to Native American groups to exploit tribal sovereignty.

Western Sky, which operates on a reservation in South Dakota but markets its loans through national television and Internet advertising, says its location on tribal land prevents authorities from using state law to regulate its business. The Consumers for Choice site takes that argument a step further, declaring, “With your help, we can tell our elected leaders to put a stop to baseless attacks on tribal business and eliminate government fraud!”

Though the website contains no information about the type of loans in jeopardy of being eliminated, there is plenty of incendiary language designed to incite readers into action. Consumers for Choice warns of “elitist Federal regulators” seeking to deny “access to much-needed credit and funding for the average American family.”

The Consumers for Choice site, registered in August shortly after the New York State and Department of Justice probe began, also does not disclose any information about who is behind the effort. The Contact Us page lists an address for Aristotle, a political website company.

The only names listed on the site are Republican members of Congress who have issued supportive blurbs.

“I applaud the efforts of Consumers for Choice to promote free market principals and help make the general public aware of how federal and state regulators are now working to limit consumers and small businesses ability to access consumer credit,” reads one message from Senator Jerry Moran (R-KS). Similar quotes are provided from Representatives Dennis Ross (R-FL), Dave Schweikert (R-AZ) and Tom Graves (R-GA). In August, thirty-one House Republicans signed a letter to the government, accusing the Department of Justice of “intimidating” banks for working with online lenders.

A look into Florida state business records, where Consumers for Choices Inc. is registered, provides more clues.

On August 30, 2013, an attorney named Andrew L. Asher filed documents to change the name of “Floridians for Good Government, Inc.” to “Consumers for Choices, Inc.”

Asher is attorney with Jenkins Hill Consulting, a lobbying firm that represents a trade association for installment lenders called the American Financial Services Association.

The group spends about $6 million a year, with a large portion of its budget devoted to advocacy and government relations. Last week, AFSA held its annual meeting at the Mandarin Oriental Hotel in Washington, DC, where member companies, along with their lobbyists, met with lawmakers and were treated to a private talk on “inside politics” by Fox News Sunday host Chris Wallace.

 

By: Lee Fang, The Nation, October 28, 2013

October 28, 2013 Posted by | Consumer Credit, Consumers | , , , , , , , | Leave a comment

“The Evil Bozo Creep Show”: Trump University And Clown School

There’s really nothing all that wrong with defining “success” as making an absolute buffoon of yourself. You get attention that way. You might even make money that way, especially if you convince people that being as much of an embarrassment as you are is, in fact, a good thing – and you can put them on TV so people can watch the spectacle unfold. And in our absurdly celebrity-obsessed culture, there’s enough blurriness to the line between famous and notorious that one can convince oneself they’re moral equivalents.

But they’re not. If you want to make an ass of yourself for fame and money, knock yourself out. But don’t expect to be taken seriously at the same time.

That lesson has escaped walking logo Donald Trump, whom we thought was spending all his time combing his thin hair over his forehead, putting his name on buildings in tacky bright lights and humiliating people on a recession-era TV show about getting a job. But Trump, it seems, was running something called Trump University. Who knew?

These are not, after all, two words that one would put next to each other, logically. But Trump runs some sort of seminar camp in which he charges people up to $35,000 to hear hand-picked speakers talk about how to do the “art” of the Trump real estate deal, according to a complaint by New York Attorney General Eric Schneiderman. It’s not an actual university – that is, it doesn’t award degrees. And even the dangling carrot of the institution – the hope of actually getting to meet The Donald – wasn’t realized by many students (or, “students”) who, Schneiderman said, had to settle for a photo of themselves next to a cardboard cutout of Trump.

To his credit, that’s not a bad metaphor for the whole “university” scheme. But it’s hardly fair to people who shelled out thousands and thousands of dollars, thinking they’d get rich. Said Schneiderman:

Trump University engaged in deception at every stage of consumers’ advancement through costly programs and caused real financial harm. Trump University, with Donald Trump’s knowledge and participation, relied on Trump’s name recognition and celebrity status to take advantage of consumers who believed in the Trump brand.

To be fair, there are other fake schools that collect high tuitions from desperate people who then can’t find jobs or make back the investment they made in their educations. Trump is a meaty target – something he surely knows, since he’s put a lot of effort into making himself one. And it’s entirely possible that Schneiderman, wanting a tiny piece of the media attention Trump courts 24/7, was drawing attention to a serious issue by going after the least serious “school” out there.

But Trump’s level of self-aggrandizement has reached stunning heights, as he now contends that the president of the United States himself is behind the sting. President Obama and Schneiderman met on a Thursday night. Could they have been talking about Democratic politics? A looming government shutdown and what it would mean for the economy? The impact of Obamacare in New York, where insurance premiums are expected to go way down? Nope, Trump insists. It all has to be about him – what else? Said Trump:

They meet on Thursday evening. I get sued by this A.G. Schneiderman, I get sued on Saturday at 1 o’clock. Think of it. What government agency in the history of this country has ever brought a suit on a Saturday? I never heard of such a thing.

Perhaps it will all be academic in the end – which is about as close to academics as his institute comes. But Trump University and Trump himself should cheer up. There’s always clown college.

 

By: Susan Milligan, U. S. News and World Report, August 27, 2013

August 28, 2013 Posted by | Consumers, Donald Trump | , , , , , | Leave a comment

“Trust Me, Trust Me Not”: Mitt Romney’s Bain Capital Under Investigation For Tax Avoidance

The New York Times is reporting that Bain Capital, the private equity firm founded by GOP presidential nominee Mitt Romney, is among a number of firms being investigated by New York Attorney General, Eric Schneiderman, for failing to pay taxes.

The New York AG’s Taxpayer Protection Bureau has issued subpoenas to at least twelve financial firms, including Bain, looking into whether the companies converted management fees (taxed as ordinary income) paid by investors into fund investments which are taxed at a dramatically lower rate.

The controversial tax avoidance scheme came to light last month when Bain Capital internal financial information was published online by Gawker.com , however the investigation had reportedly commenced prior to the publication and is not believed to be tied to the document dump.

According to the Times

The tax strategy — which is viewed as perfectly legal by some tax experts, aggressive by others and potentially illegal by some — came to light last month when hundreds of pages of Bain’s internal financial documents were made available online. The financial statements show that at least $1 billion in accumulated fees that otherwise would have been taxed as ordinary income for Bain executives had been converted into investments producing capital gains, which are subject to a federal tax of 15 percent, versus a top rate of 35 percent for ordinary income. That means the Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes.

While Governor Romney has not been active at Bain Capital for quite some time, he does continue to receive profits from the company and held investments in some of the funds that utilized the tax avoidance strategy.

The Romney campaign issued a statement indicating that the Governor had not benefited from the practice.

R. Bradford Malt, an attorney for Governor Romney who manages the Governor’s investments and trusts, argued that investing fee income is a common, accepted and totally legal practice. “However, Governor Romney’s retirement agreement did not give the blind trust or him the right to do this, and I can confirm that neither he nor the trust has ever done this, whether before or after he retired from Bain Capital.”

According to Jack S. Levin, a finance lawyer who has represented Bain Capital, the practice has been in use by investment firms for twenty years and is something the IRS knows about.

The investigation will, inevitably, raise questions as to whether or not Attorney General Schneiderman, who has strong contacts to the Obama Administration, is attempting to embarrass Romney as we head towards the November election.

Still, prominent investment firms, including Blackstone Group and The Carlyle Group, have noted in regulatory filings that they have not participated in diverting management fees into investments in their funds.

 

By: Rick Ungar, Contributor, Forbes, September 1, 2012

September 2, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

%d bloggers like this: