Streetsblog San Francisco

The fat lady hasn’t sung yet, but the country’s auto dealers have been exempted from the financial reform bill now in its final stage in Congress. Given that the purpose of the bill is to protect Americans from harmful manipulation by the people selling them financial products, this is a pretty stunning development. The nation’s auto dealers either provide or broker most of the $850 billion worth of currently outstanding car loans across America. That’s a pile of financial product: It’s more than household credit card debt and second only to home mortgages.

Every year, 50 million people buy a car, and 94 percent of those sales are loan-financed, to an average tune of over $28,000 for a new vehicle. At both new and used lots, a good number of those loans involve unethical and fraudulent practices. Like the mortgage industry, dealers have pushed credit and pricey products on people who couldn’t afford them, and then fudged paperwork to make it appear they could. They offered "zero interest and no money down" and extended loan terms from what was until recently an average of three or four years to seven and even eight years, leaving huge numbers of car owners "upside-down" on their loans -- which is to say, owing more than their car is worth.

More egregiously, their business innovations -- not advertised as such, of course -- include such activities as “power-booking” (reporting to lenders that a car is equipped with non-existent options, thereby raising the amount of the loan) and “yo-yo financing” (a form of bait and switch, in which car buyers leave a down payment or trade in their car, drive off the lot, and then are falsely told that the financing "fell through" and that they have to pay a higher interest rate, often under threat of repossession or arrest).

The list goes on. Dealers regularly get kickbacks and markups from other lenders. Car loans have been packaged and dangerously securitized, just like home mortgages. Dealers encouraged many car buyers to use home equity loans to make their purchases, obliterating whatever cushion they had when home prices plummeted. It’s a jungle on the lot for consumers, especially the poor and those with poor credit.

In a recent New Yorker article, James Surowiecki seeks to explain how the auto dealer exemption could have happened when it is so opposed to the public interest, and when powerful actors like Citibank and J. P. Morgan did not escape regulation. He sees it as mostly a public relations coup, with the dealers presenting themselves as Main Street plain folks, virtually victims of the financial system themselves. They also played up the number of jobs dealerships provide in communities across the nation (how those jobs would dry up if dealers had to make an honest living was not made clear).

But what wasn’t noted is the power of the car dealers over the press itself.

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The Ad Council has some new material in its campaign aimed at teenage drivers. In these spots, a comedic actor (Fred Willard in the ad above) in the backseat of a car with three teens cajoles or threatens the driver into slowing down or minding the road. The gist of the campaign, corresponding with the title of its web site, is "speak up or else" -- a name perhaps more suited to hard-hitting PSAs from overseas.

"Cyclists are so used to doing with scraps and they've been that way for so long that they are shocked when they get anything that satisfies their needs."

Barry Bonds may almost have the home run record, but the San Francisco Giants have another milestone that is much more admirable: the first free, convienent, attended bike parking facility at a U.S. stadium.

Over half of the people who attend Giants games do not travel by car, a somewhat remarkable fact in car-crazy California. (Note to Brooklyn's Atlantic Yards bosses: Look at what San Fran is doing to encourage people not to bring their automobile to the stadium).

As part of an arrangement with the San Francisco Bicycle Coalition, you can bicycle to a Giants game at AT&T Park, check your bike with up to 200+ other fans, and go catch America’s pastime. Kash, Valet Bike Parking Coordinator for SFBC, runs the operation and gives us the scoop. As you’ll see, fans overwhelmingly endorse it.

A regulation passed by the San Francisco Board of Supervisors in 1999 states all events incurring a street closure require monitored bicycle parking if the event anticipates 2000 or more participants. This only makes sense in a city like New York, too. Why not encourage something like this at Madison Square Garden, Yankee or Shea Stadium? Or at the very least, some quality racks in a secure, protected location.