Obama

Fair to Lump Auto Dealers in with Financial Reform?

John Sternal, LeaseTrader.com — Mon, 07 Jun 2010 15:46:04 GMT

Fair to Lump Auto Dealers in with Financial Reform?

Auto dealership groups have unleashed a wave of lobbyists on Capitol Hill to keep their groups out of a key financial reform bill currently being written.
The bill is designed to protect consumers against big banks from making selfish decisions that appear to only benefit large investors and not the “little people.”
Auto groups say their lending practices should not be mentioned in the same breath as large investment banks on Wall Street; some senators think otherwise.

Are auto dealers and their finance divisions lumped in with other banks, financial services groups and investment bankers when it comes to finance reform? Should they be? Do you feel the same way about your car lender as you do a bank on Wall Street with a negative perception? Keep in mind you don’t have to deal with financing when you take over a Lease Specials through LeaseTrader.com.

You remember the credit collapse of 2009, right? You remember Bear Stearns and Lehman Brothers failing because they took on too much “bad debt” and then needed a bailout to survive – to which none was avail? Simply put, some banks took on too much water and couldn’t stay afloat. When they asked for the government’s help to come in and help get the water out of the boat, the government said you’re on your own.

The boat sank and many people feel parts of the economy went down with the boat.

Here’s the rub, though. The government provided buckets to some banks but not to others. Fair or unfair? That became the discussion which is ongoing today.

Ultimately this meant the government decided to create “Financial Reform,” or to put in other words, the government now wants to change the rules of the game so they can play a larger role in regulating what happens inside of a bank so that they can control how much water comes into the boat in the first place, otherwise known as debt.

So here’s the discussion today. Auto dealership groups are trying to keep auto lending out of the financial overhaul bill currently being formulated in Congress.

A few things to consider:

Sen. Sam Brownback (R-Kan.) is one of the biggest backers of the auto dealership groups. He says we shouldn’t punish auto dealers the same way we want to punish the banks because it’s an entirely different kind of financial lending.
What’s more, he says auto dealers have a larger impact on Main Street compared with the banks that cater to Wall Street.
What does this mean? He’s trying to sell you on the notion that auto dealers are the “good guys” because they reflect and impact real people, not the suits that only care about money.
On the flip side lies Senate Banking Committee Chairman Christopher Dodd (D-Conn.), who says auto lenders should absolutely be a part of the reform since his office has dealt with plenty of complaints against auto dealership financing environments, especially complaints coming from military personnel and families.

What say you? Keep them in or give them a get out of jail free pass? Remember, there is no worry about financing at LeaseTrader.com.

The financial reform bill is expected to be built and proposed during early July. Looks like auto dealerships and their lobbyists will be busy buying some steak dinners between now and then.

The Ins And Outs of Captive Finance Deals

David Walker, LeaseTrader.com — Fri, 04 Jun 2010 19:57:00 GMT

The Ins And Outs of Captive Finance Deals

Is a captive finance deal best for you and your car Lease Specials?

Is General Motors (GM) getting back into the auto financing business? Several media reports have indicated that GM is planning a return to auto financing through its GMAC (now Ally Bank) finance division.

In fact, there’s even talk that GM will buy the finance division and bring it back under the GM tent. Naturally, the biggest reason for doing so all comes down to money. Having a captive finance division (in-house lender) can be very profitable for a car manufacturer. Often times the captive finance arm can offer deals packaged with incentives that beat nearly every other deal from an outside bank or lender. Financing is always an important step when shopping for a new GM Lease Specials at a dealer.

This is mostly good news for consumers.

Why? Because anytime a lender comes into the marketplace offering competitive deals for car shopping, the consumer wins out. More banks is good news because of increased competition to land your deal.

All that being said, it’s important to know when it’s a good idea to use and the captive finance division and when it’s a good idea to use one you’ve already lined up for a Lease Specials.

When the Lease Specials deal is too good to pass up and no other lender’s terms match what the captive is offering, it’s definitely a good idea to go with the captive finance option.
When the captive finance lender is prepared to offer a significant incentive or cash back deal, it’s always a good idea to consider.
When you read the fine print, if the captive finance option offers terms that inflate the interest rate so that you may be paying more in the long run, you may want to check elsewhere to get a better rate.
Make sure the car salesman isn’t adding in extra warranties or things like floor mats to be masked as an incentive. These items can come back to haunt you by going with the captive finance arm and it may be better to engage with another third-party lender for your Lease Specials deal.

But many analysts believe it will be good for the consumer because car dealers can typically offer more zero-percent interest financing when they can tap their own captive finance arms.

Car leasing website LeaseTrader.com allows car shoppers to bypass all the headache in finance shopping because there is no contract negotiations and financing when taking over a leased vehicle through the marketplace.

Lawmakers Accuse GM ‘Obama Admin’ of Misleading Public Over Loan Repayment

David Walker, LeaseTrader.com — Fri, 30 Apr 2010 21:38:31 GMT

Lawmakers Accuse GM ‘Obama Administration’ of Misleading Public Over Loan Repayment

A handful of lawmakers are accusing General Motors of misleading the public by continuing to claim as part of its advertising blitz that the auto giant has repaid its government loans "in full."

General Motors has been running ads on all the major networks claiming the company repaid its $6.7 billion U.S. government loan "with interest five years ahead of the original schedule." General Motors Company CEO Ed Whitacre can be seen in the ad walking through an auto plant as he touts the company's progress.

But lawmakers, and even the inspector general for the bailout fund GM borrowed from, point out that General Motors only repaid the bailout money by dipping into a separate pot of bailout money. They say the company did not actually use its own earnings to make the early payment and are questioning why executives are making such a big deal out of it.

"The hype is not the reality," Sen. Charles Grassley, R-Iowa, wrote in a column on FoxNews.com over the weekend. "It is far from clear how GM and the Obama administration could honestly say, much less trumpet in prime time television ads, that GM repaid its TARP (Troubled Asset Relief Program) loans in any meaningful way."

Grassley wrote a letter last week to Treasury Secretary Timothy Geithner expressing his concerns and asking for more information about why the company was allowed to use bailout money to repay bailout money.

The $6.7 billion is also just a fraction of the $52 billion General Motors received in government aid. Grassley said lawmakers are being told government losses on GM are expected to exceed $30 billion.

The TARP inspector general, Neil Barofsky, bluntly told the Senate Finance Committee during a hearing last week that the repayment "is just other TARP money" and lawmakers should not "exaggerate" the feat.

"It sounds like they're kind of like taking money out of one pocket and putting it in the other to do that," Sen. Tom Carper, D-Del., said at the hearing.

Sen. Richard Shelby, R-Ala., expressed similar concerns Sunday on NBC's "Meet the Press," saying it's "misleading" for the administration to claim the company has paid back its loans.

The GM ad could potentially land the company in trouble with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."

The FTC would not comment on the specific GM ad.

General Motors admits that the company is repaying the loan with other government money, but says a year ago "nobody thought we'd be able to pay this back."

Source: [ Fox News - Video MSNBC.com ]

GM repaid federal loan with federal money ‘Money shuffle,”

David Walker, LeaseTrader.com — Thu, 22 Apr 2010 21:42:23 GMT

GM repaid federal loan with federal money ‘Money shuffle”

WASHINGTON -- General Motors Co. repaid its $4.7 billion federal loan this week with other U.S. funds, creating nothing more than a “money shuffle,” a Republican senator said today.

Sen. Charles Grassley of Iowa, the senior Republican on the Finance Committee, cited an auditor's report that GM repayments were coming from U.S. Troubled Asset Relief Program funds in an escrow account, rather than from GM earnings. The U.S. Treasury and GM disputed aspects of Grassley's claim.

“It is unclear how GM and the administration could have accurately announced yesterday that GM repaid its TARP loans in any meaningful way,” Grassley said in a letter to Treasury Secretary Timothy Geithner. “The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government's ability to sell GM stock in the future.”

Less than a year after filing for bankruptcy, GM yesterday paid off the last $4.7 billion in U.S. loans and $1.1 billion in Canadian loans.

GM received a total of about $50 billion of U.S. assistance in its bailout, much of which was converted into stock. The U.S. Treasury Department holds 61 percent of the common stock of the automaker.

The company is preparing for an initial public offering that would let the U.S. government reduce its stake.

Treasury said today that GM repaid its loan from its own cash account that was part of the government's overall investment.

“This account was expected to be used for extraordinary expenses, and the fact that GM has decided that it does not need to reserve these funds for expenses is a positive sign for our overall investment,” Treasury spokeswoman Meg Reilly said.

GM repaid the loans ahead of its June 30 deadline, she said.

GM spokesman Greg Martin deferred to Treasury's response. He said that the company decided to repay the loan early “because we believe we have a sufficient cash balance and it's important for the company to pay back its debts as soon as possible.”

The audit cited by Grassley was reported to Congress this week by the TARP inspector general, Neil Barofsky.

The source of funds for GM's loan repayments “will be other TARP funds currently held in an escrow account,” the Tuesday, April 20, audit report said.

The audit cited GM's own filing with the government in November.

Source: [ Automotive News ]

Obama pay $1.8 million in federal taxes

David Walker, LeaseTrader.com — Thu, 15 Apr 2010 18:41:23 GMT

Obama pay $1.8 million in federal taxes

President Obama and his wife, Michelle, paid $1.8 million in federal taxes for 2009, from an income of $5.5 million -- more than twice what they made in the previous year, the White House announced on its blog today.

Their joint filing is here.

The precise tax bill is $1,792,414. The first family's income: $5,505,409.

The bulk of the president's income comes from the continuing sales of his books, Dreams From My Father and The Audacity of Hope, according to the White House statement.

The Obamas also reported paying $163,303 in Illinois state income taxes for 2009.

Last year, the Obamas paid $855,323 in federal income tax, as well as $77,883 in state income taxes. They reported an adjusted gross income of $2,656,902 for the year 2008, again mostly through book sales.

Their joint return from last year is here.

The president's 2009 income does NOT include the $1.4 million he got for winning the Nobel Peace Prize, the White House statement said, because Obama donated it all to 10 charities.

Beyond the Nobel money, Mr. and Mrs. Obama also reported donating $329,100 to 40 different charities.

The White House also released tax returns for Vice President Biden and his wife, Jill.

The Bidens paid $71,147 in federal income taxes, from an adjusted gross income of $333,182. They paid $12,420 in Delaware income taxes and $1,477 in Virginia income taxes. Mrs. Biden teaches English at Northern Virginia Community College.

The Bidens' charitable deductions totaled $4,820, in bothÂ cash and in-kind donations.

Here is the complete statement from the White House:

Today, the President released his 2009 federal income and gift tax returns. He and the First Lady filed their income tax return jointly and reported an adjusted gross income of $ 5,505,409. The vast majority of the family's 2009 income is the proceeds from the sale of the President's books. The Obamas paid $1,792,414 in federal income tax. The President and First Lady also reported donating $329,100 to 40 different charities. The largest reported gifts to charity were $50,000 contributions to CARE and the United Negro College Fund. In addition, the President donated his $1.4 million Nobel Prize funds to 10 charities. The President and First Lady also released their Illinois income tax return and reported paying $163,303 in state income tax.

The Internal Revenue Code provides that if the recipient of the Nobel Prize directs the Nobel Committee to donate the prize income directly to charity, as the President did, the recipient does not have to recognize the prize as income on his federal income tax return. The President is not permitted to take a charitable deduction on the value of the prize since it is not included in his income.

The Vice President and Dr. Jill Biden also released their 2009 federal income tax returns, as well as state income tax returns for both Delaware and Virginia. They filed joint federal and Delaware income tax returns. Dr. Biden filed a separate non-resident tax return for the state of Virginia. Together, they reported an adjusted gross income of $333,182. The Bidens paid $71,147 in federal income taxes for 2009. They paid $12,420 in Delaware income taxes and $1,477 in Virginia income taxes. The Bidens contributed $4,820 to charity, in both monetary and in-kind donations.

Source: [ USAToday.com ]