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Trump’s FBI Spy Theory Is Completely Insane

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Not that it will matter to Trump supporters, who seem to read only Trump’s Twitter feed. Jonathan Chait writes in New York:

In the face of widening evidence of Trump campaign culpability in the Russia investigation, Republicans have churned through a frequently mutating series of conspiracy theories to defend him. The latest, and possibly final, such theory, involves an informant used by the FBI to report on the campaign’s connections to Russia, whom Trump has promoted to “spy,” or possibly multiple spies. “A lot of people are saying they had spies in my campaign. If they had spies in my campaign, that would be a disgrace to this country,” Trump told reporters yesterday. “That would be one of the biggest insults that anyone has ever seen.” Trump has mixed his insinuations with dark threats of revenge. “Look how things have turned around on the Criminal Deep State,” he tweeted this morning, “They go after Phony Collusion with Russia, a made up Scam, and end up getting caught in a major SPY scandal the likes of which this country may never have seen before! What goes around, comes around!”

Trump’s ability to comprehend objective reality is characteristically cracked. But his confidence that the array of forces are shifting to his benefit, and that he may turn the tables on his enemies, has a real basis in reality. He is bringing his party, and the powers it commands, around to his warped manner of thinking.

The spy theory holds that the FBI, working on orders from the Obama administration, implanted a spy into the Trump campaign in order to help Hillary Clinton’s campaign: . . .

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Written by LeisureGuy

23 May 2018 at 4:06 pm

Head buried in sand as official government policy: Climate change in the Trump administration

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Chris Mooney and Juliet Eilperin report in the Washington Post:

White House officials last year weighed whether to simply “ignore” climate studies produced by government scientists or to instead develop “a coherent, fact-based message about climate science,” according to a memo obtained by The Washington Post.
The document, drafted Sept. 18 by Michael Catanzaro, President Trump’s special assistant for domestic energy and environmental policy at the time, highlights the dilemma the administration has faced over climate change since Trump took office. Even as Trump’s deputies have worked methodically to uproot policies aimed at curbing the nation’s carbon output, the administration’s agencies continue to produce reports showing that climate change is happening, is human-driven and is a threat to the United States.
Catanzaro, who prepared the memo for a meeting of senior White House and agency officials that took place a couple of days later, asked whether the Trump administration should “consider having a firm position on and a coherent, fact-based message about climate science — specifically, whether, and to what extent, anthropogenic emissions of greenhouse gases are affecting the climate system, and what level of concern that warrants.”
The memo presented three options without endorsing any of them: conducting a “red team/blue team” exercise to “highlight uncertainties in climate science”; more formally reviewing the science under the Administrative Procedure Act; or deciding to just “ignore, and not seek to characterize or question, the science being conducted by Federal agencies and outside entities.”
It did not consider touting federal scientists’ findings.
Although administration officials did not adopt a formal policy in the wake of these deliberations, in practice they have largely ignored the findings of U.S. government researchers. As a result, these scientists have continued to sound an alarm on climate effects such as sea-level rise and wildfires — even as top Trump officials emphasize that they can neither endorse nor repudiate these findings.
Last month, U.S. Geological Survey scientists released a Pentagon-funded study that found that low-lying coral atoll islands around the world — a number of which host military bases — could become “uninhabitable” within decades because rising seas will spoil their drinking water supplies well before entirely swallowing the islands themselves.
On Friday, the National Park Service issued a report — without a news release or official announcement — projecting that sea-level rise linked to human activity could damage park sites including Virginia’s Jamestown and Assateague Island as well as Big Thicket National Preserve in Texas and New Orleans’ Jean Lafitte National Historic Park.
“The scientific evidence about accelerating effects of carbon dioxide and greenhouse gases in the atmosphere is so strong, and so prevalent, that it would be impossible to hush it up even if you wanted to,” Rush Holt, president of the American Association for the Advancement of Science, said in a phone interview. “Coral deaths and glacier melting and sea-level rise, and all of these things are just so well documented and there’s just new evidence every day, whether it’s from USGS, or [the National Oceanic and Atmospheric Administration], or NASA, or Department of Energy, or various academic institutions. It just can’t be swept under the rug.”
At the time the memo was drafted, Environmental Protection Agency Administrator Scott Pruitt was pressing Trump to authorize a government-wide “red team/blue team” debate about whether there was a sufficient scientific basis to conclude that human-generated greenhouse gas emissions are fueling recent climate change. This came just a few months after the president had pulled out of the 2015 global climate agreement reached in Paris, which committed the United States to cutting its overall carbon output by 26 percent to 28 percent below 2005 levels by 2025.
“The idea was to have a basic approach, or agree to some principles, when it comes to climate policy,” said George David Banks, who served on the National Economic Council as a special assistant to the president on international energy and environment before leaving in February.
The overwhelming majority of scientists, along with the U.N. Intergovernmental Panel on Climate Change, have concluded that human activity has driven warming over the past half a century or more. But Trump has repeatedly questioned this scientific consensus, both as a presidential candidate and since taking office.
Catanzaro, who left his job last month to return to the consulting and lobbying firm CGCN, declined to comment on the memo.
A separate raft of documents, released this month through a Freedom of Information Act lawsuit brought by the advocacy group Natural Resources Defense Council, shows that  . . .

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Written by LeisureGuy

23 May 2018 at 2:02 pm

Donald Trump, foreign-policy loser

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I don’t know about you, but I’m already tired of losing. Jennifer Rubin writes

There are a couple of ways to look at President Trump’s unraveling foreign policy initiatives: They were flawed, wholly unrealistic from the get-go, or, alternatively, a chaotic administration, infighting and an erratic president made hash out of attainable goals. In the past week or so Trump has suffered major setbacks on three of the most critical foreign policy challenges he faces — China, North Korea and Iran.
On China, after considerable bipartisan blowback, Trump now denies that he made a deal to let China telecom ZTE, a violator of U.S. sanctions law, off the hook. Democrats and Republicans alike view the denial with extreme skepticism. Even Sen. Marco Rubio (R-Fla.), not known for challenging the president, blasted out an irate tweet. (“Sadly #China is out-negotiating the administration & winning the trade talks right now. They have avoided tariffs & got a #ZTE deal without giving up anything meaningful in return by using N.Korea talks & agriculture issues as leverage. This is #NotWinning.”) Treasury Secretary Steven Mnuchin tried to duck harsh questioning from members of the Senate Appropriations subcommittee on financial services, which further aggravated lawmakers. Meanwhile, Trump has apparently folded his tent on the trade war with China, demonstrating once again that the best tactic against the president is to call his bluff. Trump’s promise to get tough with China and strike better deals, a key part of his campaign pitch, seems unattainable at this point. Even he acknowledged as such in a Wednesday morning tweet: “Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion.” Apparently he is not a strong dealmaker at all.
With regard to North Korea, a sensible approach of maximum pressure on Pyongyang might have paid dividends over the long run. Instead, Trump’s bellicose rhetoric prompted South Korea to indulge in its brand of starry-eyed diplomacy, the result of which was a shiny prize for the narcissistic president, an historic summit with North Korea. The administration (or at least Trump) became convinced that our hard line had driven North Korea to the table. CNBC’s John Harwood quotes Korea expert Robert Kelly at Pusan University as saying, “It is an open secret in Korea that this was just flattering Trump to prevent him from starting a war. No one actually believes it. Trump actually drove South Korea to the table, not North Korea.”
Someone in the administration must have convinced Trump that “denuclearization” as we define it is not a realistic outcome from the summit. Trump accordingly is now furiously backpedaling, suggesting the summit may not happen or would be delayed. Given how poorly informed and prepared Trump is, and how he hungers for any deal he can call a win, a delay in the summit would be a godsend for the United States.
Former ambassador Eric S. Edelman tells me, “It seems that the president’s impulsiveness led him to agree to the original South Korean-transmitted ‘invitation’ to meet with Kim Jong Un that was at least partly the product of Seoul’s own effort at wish fulfillment in the face of contrary advice from his own advisers.” He adds, “It seems like reality is now catching up, which highlights the dangers of foreign policy by impulse to begin with.”
Then there is Iran. There, too, policy was driven by a single, emotional impulse: “The Iran deal is bad. The worst! Get rid of it.” There was never a serious consideration — because Trump had his heart set on one outcome only — as to whether we would be better off in the deal, still with support for allies and pressing for joint effort on nonnuclear items, or outside the deal, with the threat to sanction our own allies if they remained in the deal. Israeli Prime Minister Benjamin Netanyahu expertly played Trump, although he too never presented a realistic explanation for why leaving the deal would get us a better one.
Secretary of State Mike Pompeo’s high-octane speech laying out a laundry list of demands seemed to be a thinly disguised plea for Iranian regime change (for which he has no coherent strategy, either). Edelman doesn’t “necessarily object to withdrawing from the JCPOA per se,” but that approach, he says, would have required “a strategy and policy to execute the strategy, and so far I am see scant signs of either.”
The net result has been to stoke anti-American animosity in the European Union, whose officials benefit from standing up to Trump. (The Post notes that a “reason for Europe’s resurgence could be a string of verbal attacks against Europe coming out of the White House. Trump’s threats over defense spending, the Iran deal and trade tariffs have snubbed European governments, but they now also serve are the prime example why the E.U. is needed, officials here say.”) Iran shows no interest in negotiating a worse deal for itself, especially with Russia, China and the E.U. willing to stick with the deal and continue business there.
It should be noted that a great deal of the blame for the ill-conceived Iran gambit lies with firebrand senators who have egged Trump on and with outside foreign policy voices giving cover to Trump’s outlandish rhetoric and unattainable goals. Trump does not think beyond the momentary impulse to satisfy his base as well as his own anti-Obama animus; U.S. senators and self-styled hawkish foreign policy gurus have no such excuse. A campaign line (Rip up the Iran deal!) does not make for a foreign policy strategy; there has been a glaring lack of recognition that objecting to a deal before it is made does not mean scuttling it makes sense after the deal is made, when circumstances have changed and one has a paucity of good alternatives.
There is a good argument to be made that modest foreign policy goals could have been attained with measured, focused and realistic goals competently executed. The Joint Comprehensive Plan of Action was flawed. We could, for example, have forged agreement with the E.U. to sanction Iran for its missile program while remaining in the JCPOA. We could have reversed President Barack Obama’s disastrous inaction on Syria, putting pressure on its Tehran patrons.
On China, we could have focused on an entirely legitimate complaint regarding China’s theft of our intellectual property (and its bully tactics to extract it from companies wanting to do business there). Instead, our maximalist demands based on a misplaced concern over the trade deficit made any satisfactory deal virtually impossible.
As for North Korea, a more credulous and experienced president would have lowered the rhetoric, sidestepped the trap of a summit invitation and ratcheted up economic and diplomatic pressure. We would have engaged in some real soul-searching as to whether it is possible to strip North Korea of its entire nuclear weapons program.
There is no guarantee that any of those more modest efforts would have succeeded. Nevertheless, . . .

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Written by LeisureGuy

23 May 2018 at 10:46 am

How’s that tax cut working out for you? (Harley-Davidson took its tax cut, closed a factory, and rewarded shareholders)

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Emily Stewart reports in Vox:

In September 2017, House Speaker Paul Ryan traveled to a Harley-Davidson plant in Menomonee Falls, Wisconsin, to tout the Republican tax bill, which President Trump would sign later that year. “Tax reform can put American manufacturers and American companies like Harley-Davidson on a much better footing to compete in the global economy and keep jobs here in America,” Ryan told workers and company leaders.

Four months later and 500 miles away in Kansas City, Missouri, 800 workers at a Harley-Davidson factory were told they would lose their jobs when the plant closed its doors and shifted operations to a facility in York, Pennsylvania — a net loss of 350 jobs. Workers and union representatives say they didn’t see it coming.

Just days later, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.

It’s a pattern that’s played out over and over since the tax cuts passed — companies profit, shareholders reap the benefits, and workers get left out. Corporate stock buybacks hit a record $178 billion in the first three months of 2018; average hourly earnings for American workers are up 67 cents over the past year. Harley-Davidson is an American symbol, and President Trump has trotted it out as an example of business success. But as it’s getting its tax cut, it’s outsourcing jobs and paying shareholders.

The tax cuts aren’t saving jobs at Harley-Davidson

It wasn’t just Ryan who made promises to Harley-Davidson. Trump in February 2017 met with Harley-Davidson executives and union representatives at the White House. He thanked the company for building in America and predicted its operations would grow.

“I think you’re going to even expand — I know your business is now doing very well, and there’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now,” Trump said. He added that impending changes to “taxing policies,” health care, tariffs, and trade would only make things better.

The tax cut, at least, came through. The Republican tax bill, which slashes the corporate tax rate to 21 percent from 35 percent, is giving Harley sizable tax savings this year. The company estimates its effective tax rate — the amount it pays — will be 23.5 percent to 25 percent this year, about 10 percentage points lower than it would have been without the tax bill.

That’s a significant savings: The company makes about $800 million to $1 billion in pre-tax profit, according to Seth Woolf, an analyst at North Coast Research.

Just over a month after Trump signed the tax cuts into law, the Kansas City closure was announced. Workers found out when they arrived at the plant that morning: They were kept in the hallway, informed that the factory would be shut, and sent home for the rest of the day without pay. The union had no advance warning, said Greg Tate, a staff representative for the United Steelworkers District 11, which represents about 30 percent of the Harley-Davidson plant’s workers. (Harley-Davidson and the two unions that represent most of its production employees last year terminated their 22-year partnership agreement.)

“We really never had any belief that they were going to shut the Kansas City facility down,” Tate said. The announcement was “the first anyone found out about it.”

The company will cut 800 jobs at the Kansas City plant when it closes by the fall of 2019 and says it expects to add 450 full-time, casual, and contractor positions in its York facility — a net loss of 350 jobs.

The median household income in York is much lower than in Kansas City, and Tate said that hiring a casual workforce there — temporary workers brought in to boost production during peak season — will be easier and cheaper for Harley.

“This is a decision we did not take lightly,” Harley said in a statement. “The Kansas City plant has been assembling Harley-Davidson motorcycles since 1997, and our employees will leave a great legacy of quality, price, and manufacturing leadership. We are grateful to them and the Kansas City community for their many years of support and their service to our dealers and our riders.”

Harley-Davidson is also expanding overseas

Meanwhile, Harley-Davidson is opening up a plant in Thailand, where it plans to start production later this year. (The company also owns and operates facilities in India and Brazil, and it is closing a facility in Australia.) The company says the Thailand plant isn’t meant to outsource jobs but to boost its international business and avoid tax and tariff burdens. Trump’s proposed steel tariffs could pose a threat to Harley and add an estimated $30 million to its costs, and the European Union has threatened to impose a tariff on the company’s motorcycles in retaliation.

Union leaders, however, have suggested that the Thailand plant opening and the Kansas City plant closing are tied together.

“Part of my job is being moved to York, but the other part is going to Bangkok,” Richard Pence, a machinist at the Kansas City plant, told the Milwaukee Journal Sentinel earlier this month when in Washington as part of a meeting between House Minority Leader Nancy Pelosi and members of the Association of Machinists and Aerospace Workers, which represents about 70 percent of the Harley-Davidson workers being laid off.

The Kansas City plant closing will cost Harley up to $200 million through 2019, according to Bloomberg’s estimates, and should result in annual savings of $65 million to $75 million after 2020.

Tate, from the steelworkers union, suggested the tax savings Harley reaped from the GOP bill might have actually freed up the cash for it to go ahead with the US restructuring plan now. “They have the capital now to move Kansas City, to shut it down,” he said. “All of that money really came from the tax cut plan, so it kind of had the opposite effect of what it was supposed to do.”

Woolf, the analyst, said he wasn’t sure that was the case. “I think what this reflects is that they’re finally coming to grips with the fact that the US market is contracting,” he said. Harley-Davidson has been struggling in recent years — sales have declined as its core demographic, baby boomers, ages and as millennials shy away from big bikes. The decline has been particularly acute in the US: Harley-Davidson’s motorcycle sales declined 8.5 percent in the United States in 2017 and 3.9 percent abroad.

The tax cuts let Harley reward shareholders

Meanwhile, since the tax cut, the company is managing to reward shareholders. Just days after revealing the decision to shutter the Kansas City plant, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.

On a call discussing the company’s first-quarter results in April, chief financial officer John Olin indicated that shareholder primacy will continue. “Beyond what we invest in the business, we will return and continue to return all excess cash to our shareholders,” he said. The company this year shut the media out of its annual shareholders meeting.

Harley-Davidson is one of a string of companies to announce major share buybacks since the tax bill was passed in December. Apple in early May said it would buy back $100 billion of its shares. The tech conglomerate Cisco in February said it would put an additional $25 billion toward a stock buyback. Troubled megabank Wells Fargo in January announced about $22 billion in buybacks. Pepsi announced a $15 billion buyback, Amgen and AbbVie $10 billion, and Google’s parent company Alphabet $8.6 billion.

Harley-Davidson isn’t the only company to shutter a US plant since the tax cuts were passed in December. The same day Kansas City workers found out their plant was closing, about 900 workers at . . .

Continue reading. There’s more.

Written by LeisureGuy

22 May 2018 at 3:57 pm

Here are the political norms that Trump violated in just the past week

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Max Boot, a conservative commentator, writes in the Washington Post:

Remember that old adage that a frog will jump out of a boiling pot but won’t notice if the temperature is slowly raised until it’s boiled alive? It turns out that it just isn’t true. In fact, frogs will hop out when the temperature turns uncomfortable. Which suggests that we may not be as smart as slimy green amphibians. President Trump is throwing one democratic norm after another into a big pot and rapidly raising the heat, and we’re too busy watching the royal wedding to notice. Just look at all of the significant norms he has transgressed in the past week:
Revealing intelligence sources. Trump‘s henchman, Rep. Devin Nunes (R.-Calif.), chairman of the House Intelligence Committee, found out that the FBI had a source gathering information on Russian contacts with the Trump campaign. With Trump’s support, he demanded that the FBI name its informant. The FBI refused, but by persisting, Nunes has gotten his way — the apparent informant has been named by several news organizations. This flies in the face of the long-standing revulsion, codified in a 1982 law, against revealing intelligence sources — the reason that the outing of Valerie Plame and of sundry CIA agents in the 1970s (one of whom was subsequently assassinated) caused such indignation. “The day that we can’t protect human sources is the day the American people start becoming less safe,” says FBI Director Christopher Wray. It’s safe to say that lickspittle Republicans such as Nunes care more about protecting Trump than they do the American people.
Politically motivated prosecutions. Continuing Operation Save My Skin, Trump demanded on Sunday “that the Department of Justice look into whether or not the FBI/DOJ infiltrated or surveilled the Trump Campaign for Political Purposes — and if any such demands or requests were made by people within the Obama Administration!” There is zero evidence of any political surveillance. The FBI was not trying to help the Democrats but to protect the country from Russian subversion — something that Republicans evidently couldn’t care less about. If this had been a Democratic operation, why would it have been kept a secret until after the election? Trump is demanding that the Justice Department investigate these spurious allegations to distract from the serious charges against him. He is thereby traducing a fundamental — impeachable — norm against presidents using the Justice Department for political purposes. Let’s hope that the department can get away with simply referring this dangerous “demand” to the inspector general, because “investigating the investigators” is a tried-and-true authoritarian tactic to escape accountability.
Mixing private and government business. Previous presidents sold their financial stakes or placed them in a blind trust to avoid conflicts. Trump, by contrast, kept his company while turning over management to his sons (who remain politically active). China just gave a $500 million loan to a project that the Trump Organization is linked to in Indonesia. Immediately afterward, Trump shocked national security professionals by saying he was lifting sanctions on the Chinese telecom giant ZTE. It sure looks as if Trump violated the Emoluments Clause — and maybe worse. Did Beijing bribe the president? We need an independent investigation — from either Congress, the existing special counsel, or a new one — to find out.
Foreign interference in U.S. elections. It’s not just the extensive, unexplained contacts between the Trump campaign and Russia-linked operatives — 75 contacts that we know of — or the unseemly eagerness of the Trump high command to get Russia’s help. Now we are also learning of efforts by the Saudi and Emirati governments to help Trump. The New York Times reports: “It is illegal for foreign governments or individuals to be involved in American elections … But two people familiar with the meetings said that Trump campaign officials did not appear bothered by the idea of cooperation with foreigners.” Of course not. Who cares about the rules when there is an election to be won?
Undermining the First Amendment. The Post reported that Trump demanded that Postmaster General Megan Brennan double the rate charged to Amazon and other large shippers. She refused, because the rates are set in contracts. The fact that Trump would even ask is scandalous. This is part of his vendetta against what he has called the “Amazon Washington Post.” (The Washington Post’s owner, Jeffrey P. Bezos, is also CEO of Amazon.) Trump is following the playbook of strongmen such as Viktor Orban, Vladimir Putin and Recep Tayyip Erdogan, who silenced the press not by imposing censorship but by imposing financial pressure on independent news organizations to either force them out of business or into the hands of friendly owners. In this connection, it’s worth noting persistent — if unproven — allegations that Trump blocked the merger of AT&T and Time Warner to force the latter to sell “Fake News CNN” to Rupert Murdoch, his favorite media tycoon.
Trump’s assault on democratic norms is all the more dangerous because the response is so tepid. . .

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Written by LeisureGuy

22 May 2018 at 3:34 pm

So Far, Donald Trump Has Negotiated Zero Successful Deals

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In Mother Jones Kevin Drum notes how completely Donald Trump has failed in making any deals whatsoever:

Sigh.

Trump, who has pitched himself as the ultimate negotiator, has focused on ambitious deals as president but has struggled with the fine print….Supporters stress that sometimes Trump’s ambitious efforts do pay off, as with the massive tax cut bill he signed into law late last year.

Going into the North Korea meeting, senior administration officials say, the president has been almost singularly focused on the pageantry of the summit—including the suspenseful roll-out of details. He has not been deeply engaged in briefing materials on North Korea’s nuclear program, said three people with knowledge of the White House efforts….Driven by gut instinct, Trump rarely dives deep as he prepares to meet with foreign counterparts. For the North Korea meeting, insiders say, he is motivated by the idea of scoring a historic deal and is tickled by suggestions he could win a Nobel Peace Prize — especially since Barack Obama won the honor early in his presidency.

FFS. Trump had nothing to do with the tax cut. He was, as Grover Norquist once put it so pungently, merely a human-shaped object with “enough working digits to handle a pen.” The tax cut would have passed if Mickey Mouse had occupied the Oval Office.

So that leaves zero ambitious deals that Trump has negotiated. It’s not for lack of trying, either. He tried to repeal Obamacare. He tried to negotate on DACA. He tried to declare a trade war on China. He tried to bully Mexico and Canada into ripping up NAFTA and starting over. He tried to persuade Russia to deal with him on Syria. He failed in every case because he had no idea what he was doing; what the other side wanted; or how to get there. He just wanted to make a loud threat and then declare victory, and the result has been nothing but a trail of wreckage in his wake. No one in America of either party trusts him any longer, and neither does any country in the world—with the peculiar quasi-exceptions of Israel and Saudi Arabia.¹

Anyway, now North Korea is up. Everyone with more than a marble or two clattering around inside their skull knows that Kim Jong-un is never going to give up his nukes. No one except Donald Trump, that is. And I guess even he’s starting to get the message:

President Donald Trump said a planned June 12 summit in Singapore with North Korean leader Kim Jong Un “may not work out,” adding if it doesn’t happen then “maybe it would in the future.”

I sure hope Republicans get their money’s worth in judicial appointments from supporting this cretin. I never realized that selling your soul came so cheap.

¹Why “quasi”? Because as near as I can tell, both countries trust that Trump is on their side, but both also have nothing but contempt for him. They figure they can gull him into doing what they want and ignore his idiot son-in-law, and that’s good enough.

Written by LeisureGuy

22 May 2018 at 3:31 pm

The GOP war on consumers and minorities heats up: Trump signs repeal of auto-loan policy that targeted racial bias

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Sylvan Lane reports in The Hill:

President Trump has repealed auto-lending guidance from the Consumer Financial Protection Bureau (CFPB), revoking a rule that was put in place to protect minority customers from predatory practices.

Trump’s signature on a congressional resolution erases the CFPB’s 2013 guidance targeting “dealer markups,” the additional interest that is added to a customer’s third-party auto loan as compensation for the dealer.

The president signed the resolution in a private White House signing ceremony.

Auto dealers, banks and their allies in Congress said the CFPB policy was an unfair and unfounded attack on an essential and harmless financing tool.

The move caps off an unprecedented use of congressional power, as lawmakers had never before passed such a resolution to revoke informal guidance from a federal agency.

Republicans and a small group of Democrats voted to repeal the CFPB guidance under what is known as the Congressional Review Act (CRA). That law allows a simple majority of lawmakers in the House and Senate to vote to repeal a federal rule; it also bans the agency from replacing a rule with a similar measure in the future.

The resolution cleared the House earlier this month after clearing the Senate in April.

While Congress has used the CRA to repeal more than a dozen Obama-era federal rules since 2017, this is the first time that lawmakers have successfully overturned guidance from a federal agency that had not been finalized as a formal regulation.

The CFPB took aim at dealer markups in 2013. Under former Director Richard Cordray (D), the CFPB warned auto dealers that the use of markups on third-party loans could lead to a lawsuit from the agency under anti-lending discrimination laws.

The CFPB and fair lending advocates have pointed to several studies, including one that was conducted by the bureau, that found racial disparities in dealer markups. Those studies found that minority customers often paid higher dealer markups than white customers with similar credit profiles.

While the 2013 guidance was not a formal rule, the CFPB used the policy to launch a slew of lawsuits against automakers and lenders it said violated fair credit laws with discriminatory markups. The CFPB and Justice Department sued Ally Financial in December 2013 for close to $100 million in fines and damages, and also sued Honda and Toyota for tens of millions of dollars over similar charges.

Opponents of the rule questioned the methodology behind the studies that showed discriminatory markups and accused the CFPB of exploiting a loophole to circumvent its lack of jurisdiction over the auto industry.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas), who attended the signing ceremony, praised “the hard work of Republicans in Congress” to stop “a rogue Bureau using its unchecked powers to sidestep due process and harm the very consumers it is charged with protecting.”

The CFPB policy seemed immune from repeal until last December, when the Government Accountability Office ruled that informal agency guidance could be repealed under the review law as if it were a formal rule. Sen. Pat Toomey (R-Pa.), who requested the analysis, introduced a resolution to repeal the auto lending guidance soon after. . .

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Written by LeisureGuy

22 May 2018 at 8:15 am

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