February 7, 2008

A joint amicus brief filed by AFSA and other trade groups in Graham v. Dunkley contributed to the Second Judicial Department of the NY Supreme Court Appellate Division’s 4 – 0 decision on Feb. 1 that actions against rental and leasing companies cannot be based solely on vicarious liability – holding one party responsible for the actions of another.

The court stated, “We agree with the weight of precedent that the Graves Amendment [a Federal statute which bars vicarious liability actions against professional lessors and renters of vehicles] as a constitutional exercise of Congressional power pursuant to the Commerce Clause of the United States Constitution.”

Citing AFSA’s joint brief in its ruling, the court continued, “As detailed in the amicus briefs, vicarious liability laws caused lessors to either cease leasing cars in states having them, opting for more expensive balloon note structures, or spread the cost of higher insurance premiums to lease customers nationwide.”

(click for web site)
Back to Top

Executive Vice President of Federal Government Affairs Bill Himpler participated in a panel discussion on Feb. 6 during the Women in Housing and Finance Symposium, “The New Landscape – A Dialogue on Consumer, Community and Industry Views.” Representatives from the Center for Responsible Lending, the Consumer Federation of America, Fannie Mae, law firm K&L Gates, and the Mortgage Bankers Association rounded out the panel.

During the hour-long session, the panelists discussed loan modifications, assignee liability and the benefits and drawbacks of pending bankruptcy reform legislation. Himpler clarified that the number of borrowers facing foreclosure is closer to the 1 million reported by the Government Accountability Office (GAO) study than 2 million reported by the Center for Responsible Lending. Understanding the scope of the problem allows the appropriate measures to be taken to address it.

During the panel, Himpler also detailed AFSA’s participation in the HOPE NOW alliance and applauded the regulators for taking time to assess the situation rather than making a hasty decision. He reiterated that “credit markets won’t have the security to enter the market if the bankruptcy code is opened up.” While the panel discussion was lively, the participants agreed that they must work together to reach the best possible solution for homeowners.

(click for web site)
Back to Top

AFSA welcomes the following six new Associate members: WALKAWAY USA/EFG Companies, Veritec Inc., Spectrum Fields Services, National Arbitration Forum, Finance Express, and Performance Award Center.

WALKAWAY USA, located in Irving, Texas, offers the only vehicle return program that allows customers to return a leased or financed vehicle to the retailer with no or minimal penalty when they face certain life events.

Veritec, headquartered in Jacksonville, Fla., offers specialized regulatory solutions to provide comprehensive solutions for the financial services industry.

Headquartered in Salt Lake City, Utah, Spectrum Field Services provides creative field service solutions for the real estate and financial services industries, with a focus on specialty inspections and property preservation and maintenance.

The National Arbitration Forum, based in Minneapolis, administrates alternative dispute resolution (ADR) services such as mediation and arbitration, both nationally and internationally. The forum answers procedural questions, schedules hearings, and coordinates the flow of information.

Headquartered in California, and with offices in Florida and Texas, Finance Express provides an integrated auto finance management system for independent automobile dealers. Finance Express’ easy-to-use tools simplify the management of day-to-day operations.

The Texas-based Performance Award Center’s offerings include incentive programs, online training, sales promotion/point of purchase, consumer/commercial fulfillment, brand identity and apparel, online brand identity management, promotional products, sweepstakes administration, consumer rebate administration, and minority business enterprise certification.

(click for web site)
Back to Top

AmeriCredit Board Approves Leucadia National Buy of Co Stock
Wall Street Journal (02/06/08)

AmeriCredit has announced that its board has agreed to Leucadia National Corp.'s purchase of a 20 percent stake in the company. Leucadia will be restricted from purchasing more than a 29.9 percent stake, according to papers filed with the Securities and Exchange Commission.
(click for web site) Subscription Required
Back to Top

Wells Fargo Sponsors State of the Black Union for Third Year
PRNewswire (01/31/08)

The Tavis Smiley State of the Black Union (SOBU) symposium, sponsored by Wells Fargo, will highlight how important African Americans will be in the 2008 election process and how the union can help rebuild Hurricane Katrina-torn regions. Beginning on Feb. 22 in New Orleans, volunteers in conjunction with SOBU Builds will engage in six community service projects in the region to rebuild housing, recreation, and education for devastated neighborhoods. Andre Brooks, head of Diverse Segments for Wells Fargo Home Mortgage, says, "We are excited to roll up our sleeves, once again, and to build a home that will benefit a New Orleans family. A home is the foundation on which a family's financial security is built, and we at Wells Fargo are committed to helping all of our customers achieve and maintain that critical financial goal."
(click for web site)
Back to Top






Card Bill Takes Aim at 'Major Abuses'
American Banker (02/06/08) P. 3; Kaper, Stacy

House Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Carolyn Maloney (D-N.Y.), who oversees the panel's financial institutions subcommittee, are asking legislators to back a credit card overhaul that would limit interest rate hikes and fees. Frank and Maloney are expected to introduce a bill in the near future that includes numerous reforms Maloney sent around in draft legislation in December. Frank and Maloney claim the legislation would permit cardholders to cancel their card when confronting a rate hike and pay off their account under the initial terms. Sources familiar with the legislation state the idea is to mandate card companies to provide a 45-day notice before any rate alteration and then permit the consumer to opt out within the next three billing statements at the new rate. In addition, the bill would keep companies from raising rates on outstanding debt and prohibit levying interest on debt already paid. It would also prevent universal default and mandate card companies employ standard rate designations to avoid any confusion. The bill would mandate all fees higher than 25 percent of the credit cap to be paid up front, before the card is given out.
(click for web site) Subscription Required
Back to Top

Revolution Gears Up for Next Phase
American Banker (02/06/08) Vol. 173, No. 25, P. 1; Wolfe, Daniel

Revolution Money Inc.--best known for its no-cost, person-to-person transfer system--is ready to start providing a credit card with cheap fees for retailers. The firm stated on Tuesday that it has formed a deal with Fifth Third Bancorp's processing division. The agreement means Revolution's online-based network, touted as an inexpensive alternative to MasterCard, Visa, and other cards, is ready for a significant marketing test. The RevolutionCard model is constructed around a pair of features intended to lower expenses--better security and simpler back-end systems. The cards do not possess any personal data and mandate holders to enter a PIN to allow transactions, a plan that decreases the risk of card misuse. Although analysts believe the card will probably attract retailers, they are split on how much consumers will use the product.
(click for web site) Subscription Required
Back to Top

Credit Cards Are Playing Harder to Get
Wall Street Journal (02/05/08) P. D1; Kim, Jane J.

Tighter credit standards are making it more difficult for consumers to obtain credit cards. Major card issuers Citigroup, Bank of America, and Capital One Financial each now require higher credit scores and are offering smaller initial credit lines. For its part, Capital One Financial has reformed its credit-line increase policy by limiting or lowering credit lines for current customers that have trouble paying down their balances. Meanwhile, American Express plans to adjust the minimum payments calculation for all of its consumer credit cards in May, a move that should increase the amounts due for some cardholders. Some card companies are also raising late fees and other charges to make up for what they perceive as higher risk. Banks are tightening lending standards amid rising credit card delinquencies and losses. CreditBoards.com co-founder Linda Pack says card issuers are being more thorough in their credit checks and pulling credit reports from more than one bureau.
(click for web site) Subscription Required
Back to Top