Comment by Curtis Webster on December 14, 2009 at 1:51pm

As we all know not true and again his facts are incorrect.

Comment by David Ruggles on December 14, 2009 at 2:44pm

I think there can be some fair comparisons made between the payday loan business and the BHPH auto loan business. Personally, I'm not for curtailing either. How else does a segment of the population that, for better or worse, has found themselves in the straits of bad credit. If these to segments of finance are curtailed, will those people cease their borrowing? I think not. "Guido and Tony" from "Break Your Knee Caps" loans will benefit. If I'm going to make loans to risky borrowers, I will set my own rules, thank you very much!

It seems to me that there are certain things that need to be scrutinized in the business of lending to consumers, but a federal one size fits all solution is not called for. Statutes already exist to deal with lending practices on both the federal and state level.

Perhaps securitization needs to be looked at? I'm not aware of any CDOs being attached to auto loan securities. Does anyone know anything about that? I've got a real "thing" about CDOs, which in my mind are insurance products. AIG and others did not use the term insurance when they created these "risk hedges" and the appropriate authorities totally missed it. We all know what happened from there.... no reserves to pay claims and no safety net under the system, as with insurance products.

Let's hope the folks who lobby for the auto industry can gain an ear on this issue.

Comment by Norm on December 14, 2009 at 3:15pm

"transparency and accountability"? Seems to me that needs to start at the White House. He also said that there will be a time for banks to be profitable, but now is not the time! Thank you Mr. President, I'll be sure to qoute you at my next board meeting.

Comment by Bill on December 14, 2009 at 4:01pm

What do you think the Nara decision is all about??!!

Comment by William Fowler on December 14, 2009 at 4:15pm

President Lyndon Johnson's administration was known for his War on Poverty. President Obama's will be known for his War on Prosperity.

Obama wants Wall Street to fall in line with and back a proposal for a consumer protection agency that cleared the House last week. He said Monday afternoon that he has no interest in "vilifying" Wall Street but wants them to be fully on board with efforts to spur job growth on Main Street. "We expect them to explore every responsible way to help get our economy moving again," Obama said.

A dozen executives from Bank of New York Mellon Corp., Bank of America Corp., U.S. Bancorp , JPMorgan Chase & Co. The heads of Morgan Stanley, Goldman Sachs and Citigroup have been planning to stand up to the president on issues they say his statements oversimplify -- particularly the creation of the Consumer Financial Protection Agency

"He can say what he wants, but we're not going to go back to the kind of lending that put us in this mess," Let's face it Fannie Mae and Freddie Mac was pushed by good old Barney to take on loans that a sane person would not accept which broke the system and started the push on Wall Street who was sucked into the greed party. Now the government wants none of the blame.

Republican Party Chairman Michael Steele said Monday that Obama "should recognize that banks aren't going to lend money to people who won't pay them back. Banks can open the floodgates of cash, but you have inability of small business owners to pay back the loans."

Steele said on NBC's "Today" show that less regulation would return many small businesses to profitability.

One industry official said Obama is viewed as trying to paint the debate as either "You're with us or you're against us." The industry official said bankers did not view it that simply.

And neither should we. Making a loan is a lot more involved today than in the pass and lenders will continue to tighten their risk models until they feel more comfortable. Do you blame them?


"We want him to know we have the same goals, but disagree about how to get there," the official said.

Bankers were planning to outline alternatives to the new consumer agency. Most lenders support strengthened consumer protections but believe the administration proposal would increase costs and create more gaps

Comment by David Ruggles on December 14, 2009 at 6:21pm

Another recent quote from noted savant Michael Steele in response to GM's recently report of a quarterly loss, “This is further proof that President Obama's economic experiments are wrong for America." While regulation always includes "unintended consequences" I think it should be clear that the lack of proper regulation led to the situation we find ourselves in. Steele's quote that "less regulation would return many small businesses to profitability" ignores the fact that it was the lack of regulation that put most of them in the spot they are in today.

In the interest of truth, I take great issue in any assertion that Barney Frank pushed Fannie and Freddie into buying mortgages that wouldn't be paid back. It just didn't happen that way. Extensive resources to find out what really happened can be found at

http://www.bankinnovation.net/

In my mind, the banks are sitting on a lot of loans where the collateral does not support the money advanced against them. As long as this situation exists, banks will hoard cash to protect against extreme loss severity if or when these loans go bad. What could fix this? Home values going up by a bunch. I don't see that happening.

Comment by Norm on December 14, 2009 at 6:38pm

I think your seriously misguided if you don't believe that over regulation, the CRA and Frank contributed a great deal to the MAC mess. Banks found creative ways to finance those that otherwise would not qualify to passify Washington. Now they want the banks to do that which got them into this situation. Help stimulate the economy regarless of the impact to profitability.

Comment by David Ruggles on December 15, 2009 at 12:27pm

Over regulation? Who was regulating AIG? The CRA? Have you ever read the Act? It was enacted to prohibit "red lining" by lenders and insurance companies. It had NO force of law to compel banks to makes risky loans. Risky mortgages were made because they could immediately be sold to Wall Street who would packed them up into an ABS, "insure" it with a CDO, and sell it as a AAA rated bond. Doesn't this sound as if the regulators were asleep? Repeal of Glass Steagall made no difference? It opened the door to this entire debacle.

Fannie and Freddie were buying mortgages in competition with Wall Street. If you check out the resource I provided rather than watching FOX you will find out this is true.

The impact of Barney Frank and the CRA is negligible at best.

What I might agree with is the fact that the administration seemingly wants lenders to do what got them into trouble in the first place. The banks have their own reasons to sit tight. They are sitting on billions of potential losses. Many are holding Mortgage Backed Securities or mortgages themselves. The collateral does not support the money loaned against it. If this house of cards starts to crumble there won't be anywhere near enough cash to save these banks. Everyone is holding their breath on this.

And even financially solvent small businesses aren't borrowing. They mostly aren't looking to expand and many are just treading water. Many of the small businesses looking for loans need the money to hang on, a risk lenders aren't willing to take on at the moment.

Toxic assets and the associated deflation of home values are the proverbial "Sword of Damocles" hanging above our heads..

Comment by Norm on December 15, 2009 at 1:32pm

Without the pressure of the CRA and Frank, without pressure to increase mix in previously undesirable profiles and demographics there would have been no need for the regulation on the back end. Leave the lenders to do what they know how to do and do well. As usual, political intervention with no consideration of the unintended consequences. I'll tune in to MSNBC for a few days so that I can understand your point of view.

Comment by David Ruggles on December 15, 2009 at 4:06pm

Forget MSNBC. The facts don't bear out your assertions. Are you saying that certain minorities and demographics are undesirables? Do you think "red lining" has a place in the U.S.? Have you read the CRA? Are you saying that AIG didn't invent CDO's, a disguised insurance product, and that they played no part in the debacle?

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