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Don't Let Auto Dealer Markups Take You for a Ride

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(NNPA) The Consumer Financial Protection Bureau (CFPB) recently issued a warning to banks, finance companies and credit unions that they will be held accountable for discrimination in auto lending. In announcing its intention to hold auto lenders accountable for illegal, discriminatory markups, CFPB also published a bulletin detailing ways lenders should incorporate practices designed to honor fair lending laws.

At the crux of CFPB’s concern is a practice known as “dealer reserve” or “dealer participation.” Both are synonyms for a markup on financing cost that is typically hidden from the consumer. The fact that consumers are unaware of the additional interest makes it difficult to negotiate prices fairly with full information. These fees add more cost to the consumer and more profit for the dealer.

For consumers, it’s an important action. Rather than waiting for discrimination to occur, CFPB’s oversight intends to stop biased pricing before it happens. It should also be welcome news for consumers with problematic credit. The potential buyers at the greatest risk are those who lack other financing options. Adding vehicle financing to an auto purchase enables dealers to raise the loan’s interest rate and keep some or all of the difference as commission. As a result, these consumers typically receive the worst deals.

Keep in mind that interest rate markups occur at the dealers’ discretion and many times have no relation to actual credit risk. Financial exploitation is a form of discrimination.

The Dodd-Frank Financial Reform Act gave CFPB the authority to supervise more than 150 of the nation’s largest financial institutions, including those with $10 billion in assets. This supervision applies whether the lender is a bank, credit union or an affiliate. In 2012, 15.7 million auto loans contributed to $783 billion in consumer debt. Car notes are also the third largest source of household debts, after mortgages and student loans.

It is also yet another sign that discriminatory actions will persist in the absence of strict enforcement. Just as HUD oversees the Fair Housing Act, communities of color are legally protected from discriminatory practices through the Equal Credit Opportunity Act (ECOA). The ECOA makes it illegal for a creditor to discriminate in any aspect of a credit transaction on the bases race, color, religion, national origin, gender, marital status or age.

Despite these laws, some lenders continue to ignore the spirit, if not the letter of the law. Research by the Center for Responsible Lending (CRL) released in 2011 found that discriminatory auto lending pricing was evident. A series of class-action lawsuits challenged how African-Americans and Latinos disproportionately received interest rate markups more frequently and to a greater degree than their similarly-situated white counterparts.

CRL also found that consumers pay more than $25.8 billion in interest rate markups over the lives of their loans. Beyond higher mark-ups, poor credit ratings can lock consumers into finance rates so high that repossessions become the norm rather than the exception.

Through an analysis of 25 auto finance companies that together accounted for 1.7 million vehicle finance accounts by the end of 2009, CRL discovered that although vehicle sales declined by 20 percent from 2007 to 2009, the total markup volume during this same period grew 24 percent from $20.8 billion in 2007.

Now, thanks to the CFPB’s watchdog role if or when financial violations occur, dealers are assured that swift enforcement will be taken.

Further, it just makes sense for consumers to shop for the best auto lending rates, just as consumers are encouraged to shop for the best mortgage rate for a home. Most importantly, consumers should be keenly aware that the convenience of buying and financing a vehicle from a dealer will likely be more costly than if financing and sales were handled separately.

Shopping for financing first enables consumers to learn their credit scores, current competitive rates on loans and how much of a loan is affordable in comparison to their other expenses and debts. Deciding up front the household comfort zone for new debt and how long it should last, would lead to loans that are better managed and affordable.

CRL salutes the CFPB for exercising their power to ensure that the marketplace is fair for all consumers. Just as the historic Brown v. Board of Education decision held that in education, separate was inherently unequal, the same can be said of lending: let it be equal.

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at: Charlene.crowell@responsiblelending.org.

Blacks are the 'Other' Americans

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(NNPA) I was told a story the other night. Apparently on the evening of the Zimmerman acquittal, in a bar in South Carolina, a group of White patrons were talking. Some of them, upon hearing the news, shouted “Free at Last!” in celebration of the decision. One person, however, a White labor union activist, decided that this was not his gathering, and left in disgust.

The responses to the acquittal have told us a great deal about the USA. The bottom line is that many people who knew or know nothing about who Trayvon Martin was have concluded that he was a demon and deserved death. I realize that this is a very blunt comment but I believe that it is important to cut to the chase. These individuals have decided that aggression against a Black youth who looks “suspicious” (whatever that means) can be raised to the level of death and actually justified.

But here is the other piece. There have been Whites and some Blacks who have argued that we should not be so upset about the Zimmerman verdict when there are so many examples of Blacks killing Blacks that go without comment. In other words, we are hypocritical for protesting the Zimmerman acquittal. This notion actually misses a larger point.

The acquittal of Zimmerman is linked to a steady shift in the racial relations that we have experienced since the late 1970s. The erosion of affirmative action, voting rights, and unstoppable police profiling and brutality, are all reflections of this change. The Zimmerman acquittal is a reminder that we have rights that are not worthy of respect, even though those same rights are on the books.

None of this means that Black-on-Black crime is of no or little importance. Black-on-black crime destabilizes our communities and is a reflection of the continued economic and social ravaging we have experienced over the years. The fact that this crime is frequently ignored or treated as inevitable leads to despair. As a result our ability or capacity to respond to larger issues is undermined.

Thus, we should not be posing the Trayvon Martin case against Black-on-Black crime. They both need to be addressed, but the Zimmerman acquittal speaks to a very dangerous trend in the larger U.S. society that we can ignore only at our peril. This trend suggests, once again, that we have remained the “other”, that is, a segment of the population that is considered by too many Whites to be unknowable and dangerous; a segment whose lives and experiences are not worthy of any particular investigation and concern. A segment that must be marginalized or, if we appear out of the dark, swatted away, as one would do with an annoying pest.

This is a time for reflection, as President Obama suggested, but a different sort of reflection. One that really takes us into an in depth understanding of the continued operation of race in all features of US society. Yes, that discussion again…

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, a columnist with The Progressive, the immediate past president of TransAfrica Forum, and the author of “They’re Bankrupting Us” – And Twenty Other Myths about Unions. Follow him on Facebook and www.billfletcherjr.com.

Trayvon Inspired Obama to Act Like the First Black President

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By Raynard Jackson
NNPA Columnist

In 2004, at the Democratic National Committee’s presidential convention, I was mesmerized by Barack Obama, a little known state senator from Illinois. He electrified the convention and created a global buzz among those who watched on TV. In 2006, I was proud to see him elected to the U.S. Senate from Illinois.

In 2008, I was even more proud to see a Black man elected to be president of the United States. Americans throughout the U.S. celebrated this historic accomplishment. This was one of America’s best moments.

In 2013, I am most proud that the first Black president finally seemed to find his voice before the American people on an issue that was of particular concern to the Black community. After more than four years in the White House, President Obama finally spoke to America and directly to Black America simultaneously.

For the first time, Obama did not lecture or speak down to Blacks. He spoke as one of us. He spoke from his heart to our hearts, to my heart.

He did not give a speech, for that would have been cynical and would have fallen flat. He simply exposed his soul to us; but he also allowed us to penetrate the veil that he had erected that prevented him from connecting with his own people. For the first time, he actually showed an emotional connection to the plight of Blacks in this country.

Lord knows, in my columns, I have been one of his biggest critics of how he interacts with the Black community. I would be nothing short of a hypocrite not to praise him for speaking directly to the American people in the aftermath of the Zimmerman trial, especially in a way that connected to Black Americans.

He didn’t take a position one way or the other on the jury’s verdict; that wasn’t the important thing at that moment. He spoke as president of all of America, but at the same time spoke directly to the Black community without separating the country. Non-Blacks of goodwill for certain will understand my statement.

This is the Obama I have been seeking for almost five years. It was quite obvious that Obama was touched by the emotions that were raging from within the Black community since the tragic night of Trayvon Martin’s death.

Policy considerations aside, Blacks have always wanted Obama to show us that he understood the plight of being Black in America. We have wanted him to connect to our issues like he showed the residents of Newtown, Conn. after the massacre last year.

Sometimes one can be so beat up that you just want someone to say, “I feel your pain, I understand what you are going through, “even if you can’t make the pain go away. Nothing Obama said will bring Trayvon back. But for once, America saw its first Black president in public.

Some of my readers will not understand anything I am writing; it is not you to whom I am writing. Those with similar backgrounds and experiences as mine will understand intrinsically what I am saying.

I don’t expect some to understand why I behave the way I do when a policeman pulls me over or approaches me while I am parked.

Policemen will ask me why I am putting both of my hands out of the driver’s window like I did two weeks ago. I tell them because I don’t want them to have any allusions about my being armed and to make sure they know that I am no threat to them. They don’t seem to understand that before I reach into my glove compartment that I tell them that I am about to reach into the glove box to retrieve my car information that they are requesting (title, proof of insurance, etc.).

In my professional life, I constantly have to prove my abilities, even though my records of accomplishments are part of the public domain, as any Google search would reveal. In meetings, I tell the attendees that I will call a certain person and get them to do a certain thing. I report back to the group only to be asked, “Wow, so you really do know that person?” They are actually amazed that I have personal relations with some of the most powerful people in the world; they have a hard time reconciling my background (being a Black kid from the hood of St. Louis) with knowing certain types of people.

Yes, America has come a long way since the days of Jim Crow and segregation; but please don’t criticize our president or the Black community for wanting, every now and then, for the leaders of our country (regardless of color) to be touched with the feelings of our struggles.

Sometimes we just want to be told that together we will all be OK.

Raynard Jackson is president & CEO of Raynard Jackson & Associates, LLC., a Washington, D.C.-based public relations/government affairs firm. He can be reached through his Web site, www.raynardjackson.com. You can also follow him on Twitter at raynard1223.

It is Past Time to Confront the Obama Administration

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(NNPA) Alright, team, enough is enough. During the entire first term of the Obama administration, Black America—for the most part—gave the administration a pass. Many of us felt that the first Black president of the United States should have a little breathing room. While we gave him breathing room, the political Right, through organizations such as the Republicans in Congress and the Tea Party, did exactly the opposite.

For our silence we received very little. The Obama administration continuously caved to the political Right, apparently hoping that they could convince the other side that they were reasonable. Well, the political Right was not interested in reason: they were interested in blood. So, each concession that the administration made to the political Right resulted in nothing. Consider Obama’s pay freeze for federal workers. He received nothing in exchange for this, except further demands from the Republicans for even more cuts.

One does not have to be an economist or sociologist to know that Black America is in trouble. Our unemployment rate continues in double digit and at least double that of Whites. The Supreme Court’s recent decisions on the Voting Rights Act and affirmative action represent one more step towards grinding us down. To this must be added, the hiking in the student loan rate brought on by the failure of the administration and the Congress to reach an agreement, but added to this was an effort by the administration to shift how students (and their families) would actually qualify for loans.

There are also concerns when it comes to foreign policy, including, drone strikes, harassing political leaders of other countries (e.g., Bolivia’s Evo Morales), the on-going war in Afghanistan, the growing intervention in Syria and, well, you see the problem.

Many African Americans, for very understandable reasons, have been reluctant to openly criticize this administration fearing that to do so provides aid and comfort to the political Right. The time has come to cast aside such fears and recognize that there is no constituency that is better placed to lean on this administration than Black America.

Our reluctance to criticize this administration must end. Black America that must say, in no uncertain terms, that this administration would not have come into existence without our support and it is time for it to shift gears and focus on the needs of Black America and other constituencies that were there for this candidate, this president, this administration. Perhaps it is time that we also said that we need no more speeches; we need action that favors those of us who exist beneath the clouds.

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, the immediate past president of TransAfrica Forum, and the author of “They’re Bankrupting Us” – And Twenty Other Myths about Unions. Follow him on Facebook and at www.billfletcherjr.com.

Obama is a 'Do-Nothing' (For Blacks) President

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By Raynard Jackson
NNPA Columnist

In the 2008 presidential election, Blacks were the largest voting bloc for Obama (as a percentage)—96 percent. In 2012, Obama received 93 percent of the Black vote, again the largest percentage of any voting bloc.

What type of return on their votes has the Black community received? Zero. They have received lectures, been talked down to, and, more often, totally ignored.

Obama was sworn into office on January 20, 2009. In less than two months (March 18, 2009), Obama had his first meeting with the Congressional Hispanic Caucus to discuss giving amnesty to the 30 million illegals in the U.S. After the meeting, the White House’s Press Office issued a statement that said, in part: “The President had a robust and strategic meeting with members of the Congressional Hispanic Caucus today on the topic of immigration. The meeting lasted approximately one hour. The President discussed how the administration will work with the CHC to address immigration concerns in both the short and long term.”

Notice that only Hispanics were in this meeting and the purpose was to discuss an issue that is of particular importance to only them (though other groups that support amnesty would also benefit if amnesty were made into law).

Juxtapose that with Obama’s response in separate interviews about his administration’s inaction on issues of great concern to the Black community. “I think it’s a mistake to start thinking in terms of particular ethnic segments of the United States rather than to think that we are all in this together and we are all going to get out of this together,” he said. In a second interview he said, “the most important thing I can do for the African American community is the same thing I can do for the American community, period, and that is get the economy going again and get people hiring again.”

So, if that be true, can someone explain to me why there were no Blacks, Asians, Africans or Indians in the meeting with the Congressional Hispanic Caucus? They are Americans. They have members from their community that have a great interest in immigration policy. They have members of congress from these various ethnic groups.

Let’s compare the White House’s official readout from the meeting with the Congressional Black Caucus from 2010, 2011, and 2013. Notice that there is always at least a year in between meetings with the Black Caucus, but he meets with Hispanics and homosexuals on a regular basis.

From March, 2010, “This afternoon, President Obama met with members of the Congressional Black Caucus to discuss the economy, job creation and the need to pass health care reform. President Obama acknowledged the progress that has been made on the economy while also expressing his concern for long-term unemployment. He requested that Members provide specific recommendations to the challenges concerning job creation.”

From May, 2011, “The President met with members of the Congressional Black Caucus (CBC) today in the State Dining Room of the White House to discuss job creation and economic growth. The economy has added 2.1 million private sector jobs over 14 consecutive months, including more than 800,000 jobs since the beginning of the year, but the President recognizes that too many Americans families are still hurting and the unemployment rate is unacceptably high—especially among African Americans.”

From July, 2013, “This morning, President Obama met with Members of the Congressional Black Caucus (CBC) at the White House. During the meeting, they discussed a range of topics including the economy, voting rights legislation, education, comprehensive immigration reform, youth employment, gun violence, and anti-poverty programs… Though the economy is showing signs of improvement, the President and the CBC expressed shared frustration over the pace of economic growth and the elevated unemployment rate among African Americans. The president reaffirmed his commitment to support and create policies that will not only build a strong economy for the middle class but also create ladders of opportunity for those striving to get into the middle class.”

Every time Obama meets with homosexuals or Hispanics, it’s always to discuss specific legislation of interest to them, not to have some broad, free-wheeling conversation. You can even see the lack of importance of the Black Caucus by just noticing how the respective meetings are characterized by the White House.

Obama met with the CBC last week for the first time in almost two years. This is what Congressman Marcia Fudge (D-Ohio), chairman of the group, said after the meeting, “I’ve been the chair about six months, and the request we made to the president [for a meeting] has been answered. I am pleased… I think that the lines of communication have not only been open but will actually, we will have broader and deeper discussions as a result of our meeting today.”

I have absolutely no idea what this means. She is talking, but not saying anything.

Obama has had his perfunctory meeting with the CBC; now he can get back to ignoring them and passing out goodies to every other special interest (Hispanics, homosexuals, labor, White males,

As Politico, characterized Obama’s reaction to the recent Supreme Court decision on the Voting Rights Act. The title was, “President Obama’s muted response to a civil rights challenge.” The article goes on to say, “Even a Supreme Court decision knocking out a central element of a landmark civil rights law couldn’t push President Barack Obama to abandon his muted approach to racial issues.

The court’s 5-4 recent ruling torpedoing a core provision of the Voting Rights Act led the first black president to issue a tepid, two-paragraph written statement referencing “discrimination” and declaring that he was “deeply disappointed,” but never invoking the vivid and searing dogs-and-firehoses imagery that spurred the passage of the law in 1965. He made no mention of African Americans or Latinos, the groups viewed as the act’s main beneficiaries, but simply called for making voting “fair” and ensuring it was open to all.

Raynard Jackson is president & CEO of Raynard Jackson & Associates, LLC., a Washington, D.C.-based public relations/government affairs firm. He can be reached through his Web site, www.raynardjackson.com. You can also follow him on Twitter at raynard1223.

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