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FTC Field Hearings Tell the Tricks, Traps of Auto Financing

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54 Percent of Black Customers Charged Dealer Kickbacks

By Charlene Crowell, NNPA Columnist –

August 11, 2011 August is back-to-school time; but it is also the time when car dealers tempt consumers with commercials that advertise slashed prices and seemingly too-good-to-be true deals to reduce inventories. Before taking a test drive, consumers would do themselves a financial favor by learning about the tricks and traps that are built into the financing of many auto sales.

For example, consumers usually do not realize that a dealer can “mark up” the interest rate on a car loan, over a lower rate a buyer may qualify for. Dealers say this increase compensates them for the time they spend in putting the financial deal together. As the dealer is not required to disclose the markup, it leads to the creation of a loan with terms that are most lucrative to dealers – instead of the consumers.

According to research by the Center for Responsible Lending (CRL), dealer markups will cause Americans who bought cars in 2009 to pay an extra $25.8 billion over the lives of their loans. Earlier research by the National Consumer Law Center (NCLC) estimated that more than 54 percent of African Americans are charged dealer kickbacks, compared to only 31 percent for white customers – even after accounting for differences in credit risk. The extra cost to a buyer was significant too: NCLC found that in Washington, D.C., the same transaction that would cost White customers $255; but Black consumers, $857.

In recent years, NCLC’s findings led to settlements of class action lawsuits against the lending arms of major auto manufacturers including Chrysler, Ford, General Motors, Honda, Nissan and Toyota. These settlement terms limited the markup auto dealers could charge; but those caps have all expired now. Further, those caps still provided extensive discretion for dealers to mark up interest rates for some customers over others. So the problem of dealer markups remains today.

During the formation of the Consumer Financial Protection Bureau (CFPB), the auto dealers fought hard to gain an exemption from oversight. However the debate did give legislators more awareness about common auto lending and sales abuses. As a result, Congress provided the Federal Trade Commission (FTC) with stronger powers to oversee auto dealers.

These new powers led the FTC to begin a series of roundtable discussions this year that focused on abuses in auto sales and finance. Open to the public and webcasted, the first of these roundtables took place in Detroit in April, focusing on consumer protection issues involving dealership sales and financing. On August 2-3 in San Antonio, the roundtable examined the particular auto sales and financing issues of military consumers, financial literacy and fair lending. A third roundtable is planned for later this year.

“The Roundtables have been effective in showing the kinds of hidden charges and hidden incentives that cost consumers,” said Chris Kukla, a roundtable participant and Senior Counsel for Government Affairs at CRL. “The forums have also brought to light many abusive practices that clearly go beyond ‘a few bad apple’. We hope that this will lead the FTC to take strong and swift action to eliminate the abuses in the auto market.”

The ongoing abuse in auto lending is one more illustration of how existing fair lending laws have yet to fully or consistently benefit people of color. Regardless of whether a financial product is a payday loan, mortgage, or auto loan, every American has a right to be treated fairly. Our financial transactions should be transparent with full disclosure of all terms and costs.

To learn more about auto financing, visit CRL at: http://www.responsiblelending.org/other-consumer-loans/auto-financing.

If you or someone you know would like to comment on auto sales or finance, register your concerns directly with FTC at: http://rspnsb.li/oVYNbw.

Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at: Charlene.crowell@responsiblelending.org.

Service Union Unveils New Ad Campaign Focused on Minority Media

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Special to the NNPA from the AFRO-American newspapers –

In an effort to refocus Republican lawmakers on the need for job creation, the 2.1 million nurses, janitors, security officers, child care providers and other members of the Service Employees International Union (SEIU) has unveiled a 7-figure ad campaign, including broadcast and cable television, radio, direct mail and phones and online advertising. The ads will run in Colorado, Florida, Missouri, Montana, Nevada and Virginia, with a special emphasis on African American and Latino media outlets.

Despite an over-all national unemployment rate of 9.1 percent --16 percent for African Americans and 11 percent for Latinos -- and as many as 30 million Americans in need of full time work, Republican leaders in Congress have failed to make job creation a priority, focusing instead on rewarding corporations and the rich with tax breaks and incentives to ship jobs overseas.

“Working families are struggling through the worst recession in a generation,” SEIU President Mary Kay Henry said. “Republicans in Congress have a responsibility, and moral obligation, to make job creation their first priority.”

“Rather than turning their attention to the jobs crisis, Republican leaders are narrowly and exclusively focused on the wealthiest one percent of Americans,” said Brandon Davis, National Political Director of the SEIU. “Ignoring the jobs crisis is especially devastating for people of color, considering the unacceptably high unemployment rates for Latinos and African Americans.”

"The lesson of the past few days is clear: The American people have lost faith that elected leaders alone will make this happen. Working families in communities across the country are sending a clear message that it’s time to focus on job creation," said Henry.

Head and Neck Cancers Kill More African-Americans

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By Jessica Williams-Gibson, Special to the NNPA from the Indianapolis Recorder –

Bruce Hall had everything he wanted in life. He was promoted to general manager of a Tennessee Sam's Club, and had even opened his own nightclub. Hall was healthy and happy until the day he developed a sore throat.

"I thought it wasn't a big deal,'" said Hall.

After his sore throat persisted, Hall decided to see a doctor. They gave him antibiotics but the pain only got worse. He was directed to a specialist who then did a biopsy. The test results showed that he had tonsillar cancer on the left side of his throat.

Hall had battled Hodgkin's disease in his early 20s. His physicians linked that disease to him developing tonsillar cancer.

"It was a major shock. I went from everything being OK to four weeks later I'm in the hospital getting chemotherapy," said Hall who was diagnosed in May 2010. "I started losing weight and I had to be off work. I had to change my entire life around."

Hall's persistent sore throat is a classic sign of head and neck cancer, which includes cancers of the scalp, mouth, nose, sinuses, salivary glands, thyroid gland, throat and lymph nodes in the neck. Other symptoms include changes in the voice or difficulty swallowing.

Tobacco use and alcohol (especially when combined together) are two of the major risk factors for developing head or neck cancer.

Cancers of the head and neck account for only six percent of all malignancies in the U.S. Although whites currently have the highest incidence rates of head and neck cancers, death is higher in African-Americans.

Hall went through multiple rounds of chemotherapy to shrink his tumor, and robotic surgery removed what remained of it. Part of his tongue and tissue in the back of his mouth was also removed. He then received physical therapy to relearn how to eat, swallow and talk.

It took him six months to recover. Hall attributes his healing to faith and following his doctor's instructions. Once he was strong enough, Hall moved back to his hometown of Indianapolis to be closer to his family.

Surprisingly, the human papillomavirus (HPV) has recently been found to be involved in developing some throat cancers, particularly in the tonsil or back of the tongue. This can happen even in individuals without risk factors.

"It is a communicable disease believed to be spread by oral sex. It's the same type of virus implicated in cervical cancer in women. But when it's in the mouth, the virus can affect both men and women," said Dr. Michael Moore, assistant professor of otolaryngology-head and neck surgery at the IU School of Medicine and a researcher at the Indiana University Melvin and Bren Simon Cancer Center.

Historically, head and neck cancer affected older men more than women, but HPV links and tobacco cessation efforts are giving way to more equitable numbers and younger patients.

Standard cancer treatments such as radiation, chemotherapy and surgery are used to treat head and neck cancer.

Some of the symptoms of head and neck cancer mirror common ailments, and Moore suggests that people pay attention to their bodies for any unusual or persistent signs. Smokers should be regularly screened for head and neck cancer, as well as other warning signs, such as lesions on the tongue or roof of the mouth can be checked by a dentist. Eighty-five percent of oral, head and neck cancers are linked to tobacco use.

Today, Hall is cancer free, but uses his good health to be an advocate. This small group of cancer sufferers don't have the dollars and support like patients of other cancers, but Hall is determined to bring more awareness.

"We tend to think we have an S on our chest, especially men," said Hall. "You have to get yourself checked out. Spend the time and the money to get regular check-ups, and if you can't afford it, take advantage of free screenings."

For more information, call the Indiana University Melvin and Bren Simon Cancer Center at (317) 944-0920 or visitwww.cancer.iu.edu; the Head and Neck Cancer Alliance at 1.866.792.HNCA (4622) or visit www.headandneck.org

Musiq Soulchild Becomes Breast Cancer Ambassador

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Special to the NNPA from the New York Carib News –

Atlantic Records Recording Artist Musiq Soulchild recently announced his new role as ambassador for Susan G. Komen for the Cure Circle of Promise, a movement designed to further engage Black women around the globe in the fight against breast cancer. As an ambassador for the movement, Musiq will raise awareness about breast cancer so that younger women know the importance of early detection and why it’s important to pay attention to their bodies.

“Early detection is the key to winning the fight against breast cancer,” said Musiq. “Too often, Black women are diagnosed in stage three and four when breast cancer is most difficult to treat. Some women are afraid to seek treatment for fear of losing their breasts or their hair. One’s physical appearance is much less important than the will to live. It’s time to remove the stigmas that are attached to this disease.”

To put his cause where his mouth is, Musiq Soulchild will feature a group of breast cancer survivors in his upcoming music video, “YES” from his sixth studio album, MUSIQINTHEMAGIQ. The video for the song will feature Musiq as a man who loves and supports his girlfriend through her battle with breast cancer. There will be a special scene in the video that will feature a group of breast cancer survivors who show their support by wearing t-shirts, pins, and pink ribbons—items associated with Susan G. Komen for the Cure®.

Musiq Soulchild will also work with Susan G. Komen for the Cure® Circle of Promise to create awareness through social media outreach, television and radio appearances, as well as lend his talents for a fundraiser in October during National Breast Cancer Awareness Month. “We couldn’t ask for a greater level of commitment from someone who has such a strong connection to the target audience,” said Katrina McGhee, Executive Vice President & CMO. “We are certain Musiq will both transform and save lives through his ambassadorship of this program.”

Musiq said this cause is so dear to him, because his largely female fan base has been so instrumental in his success. “I care because they are at risk. They have always supported me and it’s time that I return the favor and support them. I feel the need to make an impact before breast cancer impacts them and if my music can be the vehicle, then I am happy to serve.”

Lawyers: Emergency Manager Law Targets Black Cities

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By Eric T. Campbell, Special to the NNPA from The Michigan Citizen –

DETROIT — As a ballot petition to repeal Public Act 4, the Emergency Manager law, circulates throughout the state, a broad coalition of labor and civil rights attorneys has already initiated legal action to defeat the bill in court.

Filed in Ingham County Circuit court June 22, the lawsuit states that Public Act 4 illegally establishes a new form of local government, violating the constitutional rights of Michigan residents.

Attorney William Goodman of the Detroit Lawyers Guild told a National Conference of Black Lawyers (NCBL) forum, held July last week at Fellowship Chapel, that putting together a legal strategy against a law so unjust proved challenging.

“The courts are controlled by reactionary, right-wing train of thought,” Goodman said. “But we have drafted a lawsuit that is very strong and powerful.”

In addition to legal aspects, over 100 in attendance heard testimony on what happens when an emergency manager takes over an entire city, such as Pontiac.

Pontiac’s elected city officials have had their political power stripped completely since the state of Michigan appointed Emergency Manager Michael Stampfler to run the city of Pontiac March 19.

Pontiac City Council member Donald Watkins told the forum that the EM has been unresponsive to potential business investors, especially African American businesses.

“The emergency manager law is an elimination of the system of checks and balances — he does whatever he wants,” Watkins told forum attendees. “There’s no separation of powers — he’s the executive, the judicial and the legislative branch.”

Watkins told the Michigan Citizen that Stampfler has eliminated the entire department of public works, outsourced the water department and prevented council members from seeing the city budget until it was posted online.

Faced with a $12 million deficit, Stampfler disbanded the Pontiac police department late last year and turned over police patrols to the Oakland County Sheriff’s Department.

“This is the way they destroyed reconstruction and instituted segregation,” said attorney George Washington, who has represented BAMN and the Detroit School Board in trying to curtail DPS Emergency Manager Robert Bobb’s illegal activities.

“If you look at what’s occurred as a result of what has happened to our children since emergency financial manager Bobb, you can see exactly what the agenda is — this is a law that is deliberately aimed at Blacks in Detroit.”

Gov. Rick Snyder signed Michigan Public Act 4 into law after it passed through the Republican-led legislature in March 2011.

The new law gives the governor the ability to appoint emergency managers to replace elected officials and run local municipalities and school districts. PA 4 allows emergency managers to lay off union workers, suspend collective bargaining agreements and sell off public assets among other powers. At the time, Congressman John Conyers issued a statement questioning the new law as a violation of civil rights since Black cities are disproportionately affected.

Current Detroit Public Schools emergency manager Roy Roberts is exercising powers under the act; he ignored the Board of Education and appointed his own person to the Library Board, an apparent non-financial action. He also announced this week a 10 percent pay cut for all union and non-union DPS employees.

In Benton Harbor, EM Joe Harris tried to reduce usage of the Lake Michigan beach and issued an order to city staff that they were not to attend any city commission meetings. He directed the commission to limit themselves to convening and adjourning meetings and reading the minutes.

“We want to go into court as soon as possible and say, on its face, this act is a violation of the law under the constitution,” said attorney Herb Sanders at the forum, which was moderated by Detroit City Council member JoAnn Watson.

Local taxpayers pay the emergency managers’ salaries, raising the issue of taxation without representation. The fact that majority-Black communities have been targeted by the governor’s office was not lost on the NCBL symposium panelists.

“This was aimed at Africans, and it is Africans that have to resist,” said American Civil Liberties Union attorney Mark Fancher. “If they say we’re playing the race card, then I’m playing it every chance I get.”

The Sugar Law Center is the lead counsel in the PA 4 lawsuit, representing 28 Michigan plaintiffs. Sugar Law legal director John Philo told the Michigan Citizen that soon after PA 4 legislation was signed into law, councilmember Watson hosted grassroots discussions to initiate a legal and community challenge. Watson put the word out that potential plaintiffs were needed and the effort spread throughout the city.

“We really wanted a cross section of plaintiffs who were interested in challenging the law,” Philo told the Michigan Citizen. “We decided there were legal grounds for a suit, constitutionally and otherwise.

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