« Corrupt Auto Dealers Maneuver for Special Exemption in Financial Reform Bill »
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In Arizona, Hector Maldonado says he ran into trouble with his bosses because he objected to what he claims was his employer's habit of faking financial information to qualify customers for loans they couldn't afford. One manager, Maldonado alleged in a lawsuit, cursed and threatened him after he came forward with information documenting dishonest lending practices.
In Michigan, Matthew Manley claims his coworkers saddled customers with bigger loans by slipping unapproved charges into the deals. One manager, Manley alleges in his own lawsuit, urged him to target vulnerable customers - referring to the elderly as "people with oxygen tanks" and African Americans as "the dumb blacks."
In the wake of the nation's mortgage meltdown, Maldonado and Manley's allegations sound familiar. But the pair weren't employed in the subprime mortgage business. They worked for car dealers. They are among 20 former auto dealership insiders from Arizona, California, Florida, Michigan, Illinois and Hawaii who describe a culture in which forged documents, hidden fees and other questionable practices were tools of the trade. These accounts, provided in court records and in interviews with the Center for Public Integrity, paint an unflattering portrait of the on-the-ground realities of auto financing.
The abuses alleged by the former insiders mirror some of the tactics that gave the mortgage industry a bad name and prompted consumer advocates and lawmakers to push for the creation of a federal consumer financial protection agency. Now, as Senate and House negotiators try to come to agreement on the final shape of a sweeping financial reform bill, car dealers and their critics are clashing over whether the dealers should be excused from oversight by the consumer-protection bureau.
Congressional negotiators are expected to take up the auto dealer carve-out issue on Tuesday.
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Jun 22, 2010 at 10:13 PM
Reader Comments (1)
Lawmakers on House side vote to set up dispute with Senate on auto lenders
UPDATE:
http://www.marketwatch.com/story/house-senate-panel-votes-on-consumer-measures-2010-06-22?link=MW_related_stories