A handful of bipartisan senators are scurrying to hammer out a bill that would reallocate funds from an initial $25 billion loan to the Big Three automakers in the hopes of keeping the companies afloat.
The initial loan, granted last month, was meant to be used to retool factories to produce more fuel-efficient vehicles.
During the past two days of hearings, Congress appeared disinclined to grant a second $25 billion loan to the Big Three. Lawmakers sought assurances from the Big Three CEOs that the funding would be sufficient —that the trio wouldn’t be back in six months asking for more money.
In my opinion, this reallocation is probably the quickest way to find out. The funds have already been approved, so Congress wouldn’t lose anything upfront. To think that the Big Three are concentrating on ways to retool their factories — when they fear they won’t be able to make payroll — seems silly. In other words, if they can’t meet their operational obligations with this first loan, we won’t have to worry about a second one.
Although I haven’t seen any studies that address the issue, it’s logical to me that as collections actions and repossessions increase, consumers who are trying to avoid their creditors’ efforts will more frequently turn to lawyers to protect them, and that this will lead to an increase in counterclaims against creditors. Most lawyers will tell you that collection lawsuits frequently lead to counterclaims, and that those claims, for the most part, are the types of claims that would never have been brought absent the collection actions.