The Positive Voices

One of the highlights of each year for me and thousands of Michiganders is a trip to the North American International Auto Show in Detroit. It’s always exciting to see the innovative concept cars and this year’s new models. But this year, my visit was especially memorable because of the domestic auto industry’s tough recent past, and the strong reasons for optimism about its future.It is daunting to think of what our domestic auto industry must do in the coming months and years to succeed, but not nearly so daunting as the picture a year ago, when the very existence of General Motors and Chrysler, two titans of American manufacturing might, was in doubt.Each has been through an extremely painful restructuring; thousands of our fellow Michiganders have lost their jobs. But through enormous sacrifice by GM and Chrysler workers, hard work by company executives, and the determination of the Obama administration, the companies survived. I and other members of Congress fought hard to secure their future and to assure that the pain, though severe, was minimized.Since the bankruptcy filings by GM and Chrysler, we have seen good signs for their future, as well as Ford’s. Last summer, Vice President Joe Biden traveled to Detroit to announce $1.3 billion in grants for Michigan companies to develop advanced batteries and other electrical components, the electric hearts of a new generation of vehicles. At a Michigan plant, GM has begun production of battery packs for its Chevrolet Volt plug-in hybrid, a vehicle with the potential to change the auto industry. GM and Chrysler are making solid progress in returning the investments the government has made in them. And in November, Ford reported a quarterly profit of nearly $1 billion, strong evidence that its restructuring is working.These are all reasons to feel optimistic about the domestic automakers’ future. And there were plenty more reasons on display at the auto show. There was Chevy’s Aveo RS, a close cousin of the small car GM will soon build at its Orion Township plant in Oakland County. There was Ford’s new Focus, an important update to an already successful model. And there was the Fiat 500, a small car that has impressed customers in much of the rest of the world, which Chrysler and its alliance partner Fiat will begin making in the United States soon.I was excited by what I saw. And apparently I wasn’t alone. Show organizers said that attendance was significantly higher this year than last. That’s important not just because it might signal that more consumers are thinking again about a new car purchase. It’s important because it shows that Michiganders are feeling great excitement about this industry, which has been so important to us for so long.We should not sugarcoat the difficulties we’ve been through, or those that remain. Ford, GM and Chrysler have much to do to ensure that their restructuring plans succeed. The sluggish economic recovery and the difficulty consumers have in getting car loans are major challenges. But we also should feel that all this hard work and tremendous sacrifice will bring a brighter future. It’s time to be optimistic again about the prospects for our domestic auto industry, and about what those prospects mean for Michigan and for America.

  In these tough times, a good credit record is essential for consumers seeking a loan, a better credit card, a new apartment, sometimes even a job. Federal law gives consumers the right to check their credit reports for free once a year so they can review and fix any problems, but scams promising “free” credit reports that often turn out to be expensive are making a mockery of that federal right. I’m pleased that federal regulators taking steps to end these abuses. You probably have seen ads for Web sites promising to help you obtain your credit score at no cost. In some ads you’ll hear catchy jingles; others use endorsements from well-known media figures. But none of these ads will prominently mention that your “free” credit report may not be so free. These companies use the promise of a free report to lure consumers into buying credit monitoring services for a hefty monthly fee. Thousands of consumers have been trapped in this scheme. Just one company, FreeCreditReport.com, has been the subject of 10,000 complaints to the Better Business Bureau over the last three years. In 2007, two University of Utah researchers analyzed 58 sales pitches for credit reports or scores; 41 of those advertised “free” access to reports or scores that actually required purchase of a product or service. Especially troublesome is the fact that many consumers think they are getting the truly free credit report they are actually entitled to once a year under federal law. Federal regulators are taking steps to end these abuses, and they’re using the provisions of Credit Card Accountability, Responsibility and Disclosure Act of 2009. This legislation includes a section I authored that requires clear and honest disclosure of just what these “free” credit report marketers are selling. The Federal Trade Commission recently released a proposed rule for implementing these requirements, and the FTC’s proposal will do much to protect consumers. The rule would require advertisements to disclose that they are not advertising the free, no-strings attached annual credit report mandated by federal law. Web sites for these services would have to make the same disclosure, and provide a clear, easily readable link to the government-sponsored site providing truly free reports. And the rule would improve that government-sponsored Web site, AnnualCreditReport.com, restricting commercial advertisements and eliminating complicated and confusing “terms and conditions” requirements of the three commercial credit bureaus from which consumers have the right to obtain their free annual report. Companies that profit from these deceptive offers, that is, those that offer credit reports linked to the purchase of a service or product, are fighting the FTC rule, so its fate is still up in the air. But I am hopeful consumers will prevail. In the meantime, keep in mind: You are entitled to one free, no-obligation credit report each year from each of the three commercial credit reporting bureaus: Experian, TransUnion and Equifax. You can get those reports online at AnnualCreditReport.com, by phone at 1-877-322-8228, or by mailing the request form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can get a copy of the form at www.ftc.gov or from many consumer protection organizations. Remember that your free annual credit reports do not include a credit score – the number many lenders and other businesses use to assess your creditworthiness. Consumer advocates say obtaining these scores can often be useful if you’re considering a major purchase, such as a home or vehicle. But you will have to pay for them. If you’re looking into a commercial credit-report service, make sure you read the fine print closely. Make sure that before you give a commercial service your credit card number, you’re absolutely sure what you might be charged for. You can learn more about credit reports, credit cards and other credit issues on the Federal Trade Commission’s Web site at ftc.gov/credit. Contact Senator Levin’s office at 202.224.6221 or 616.456.2531.  

  Not long ago, I testified before a subcommittee of the Senate Banking Committee on a vital issue to Michigan: ensuring that small businesses have access to the credit they need. We need credit to flow to these Main Street businesses if we’re going to beat back unemployment. Recent economic data suggest that, from a technical standpoint, our economy is rebounding. But despite the fact that our economy is becoming productive again, it is not providing job growth. If we do not act quickly to help restore employment, the “green shoots” for which we have so much hope will wither. When I talk to employers in Michigan, often the first problem they discuss with me is the difficulty in obtaining the capital they have traditionally relied on to finance their operations: capital to meet payroll, to finance inventory, to update their equipment or to expand their business. Dozens upon dozens of businesses have come to us, worried about their inability to keep their lines of credit or get new ones. Even those with an excellent credit record and plenty of orders to fill cannot get the financing they traditionally have obtained. At times my office has worked on a one-on-one basis with individual businesses and local banks, trying to find solutions that can keep business humming. We have had discussions with the Michigan Bankers Association and with state officials to try to match worthy businesses with banks willing and able to lend. But the problem persists. For much of this crisis, our attention has been focused on the largest financial institutions in our country. Programs like TARP provided large sums of capital to these large institutions because their failure would endanger the entire economy. But now, while giant firms such as Citi and Goldman Sachs report massive profits, the real lifeblood of many local economies – local banks – are struggling. Recently, the FDIC released a report that demonstrates the scope of the problem. At the end of 2009, the report said, 702 banks across the United States were in at least some danger of failure. That was up 27 percent from just three months before, and a whopping 1,400 percent from the end of 2006, when only 50 banks were on that list. Not surprisingly, as these community banks have struggled, bank lending has plummeted, down 7.5 percent from 2008 to 2009. And in Michigan, the problem is worse. By one estimate, bank loan volume in Michigan declined by 74 percent from 2007 to 2009. We must do something to support community banks so that they can lend to the small businesses that are key to creating jobs in our communities. That’s why I have co-sponsored a bill offered by Sen. Jeff Merkley of Oregon that would provide support to community banks so they can begin lending again. Another factor that keeps businesses from getting loans is similar to something most homeowners are coping with. Just as the value of our homes has fallen in this recession, so has the value of the inventory and equipment held by businesses. Because those assets are worth less, banks are less able to provide loans that use them as collateral. Our own Michigan Economic Development Corporation has a program that is designed to help support the collateral values of borrowers in this situation. And for years, the state has operated a Capital Access Program, which can also help borrowers with decreased collateral values. That program funds reserve accounts for loans to businesses that need collateral support. I think we can draw from the experience of these programs, and craft legislation that will directly help Michigan businesses get the capital they need to begin growing again to put people back to work. Contact Senator Levin’s office at 202.224.6221 or 616.456.2531.