C M Y K A14
DAILY 03-11-10 MD SU A14 CMYK
A14 KSK KLMNO THURSDAY, MARCH 11, 2010
ECONOMY BUSINESS&
DOW 10,567.33 NASDAQ 2358.95 S&P 500 1145.61 GOLD $1,108.10 CRUDE OIL $82.09 10-YEAR TREASURY CURRENCIES
UP 2.95, 0.03% UP 18.27, 0.8% UP 5.16, 0.5% DOWN $14.20, 1.3% UP $0.60, 0.7% DOWN $1.40 PER $1,000, 3.72% YIELD $1 = 90.54 YEN; 1 EURO = $1.365
Compromise would shield some lenders
DIGEST
by a presidential appointee with
ECONOMY
BIPARTISAN BILL
independent funding and prob-
February set record for federal deficit
ably placed inside the Federal Re-
NEARLY DONE
serve. It would have authority to The Treasury Department said trillion deficit this budget year,
write rules that apply to most Wednesday that the govern- surpassing last year’s $1.4 tril-
lenders, consolidating powers ment’s budget deficit in February lion, and more than $1 trillion for
Republicans argue
now held by many agencies. totaled $220.9 billion, the largest 2011.
Under current law, only banks monthly figure yet and 14 percent February normally brings def-
for less regulation
are subject to regular examina- higher than the previous record icit surges as the government
tions for compliance with those from February 2009. The deficit makes large refund payments
rules. The Federal Trade Commis- for the first five months of this during the tax filing process.
by Binyamin Appelbaum sion holds broad authority to budget year is $651.6 billion, 10.5 Those payments were boosted
pursue evidence of abuse by non- percent higher than a year ago. this year by tax credits in the gov-
Payday lenders, pawnbrokers, bank lenders, but it lacks the The Obama administration is ernment’s stimulus efforts.
car dealers and other companies mandate and resources to con- projecting an all-time-high $1.56 — Associated Press
that make loans but do not hold duct examinations. Corker’s pro-
bank charters would be shielded posal, which Dodd accepted sev- CHINA
from the scrutiny of a proposed eral weeks ago, would empower
federal consumer protection reg-
AL BEHRMAN/ASSOCIATED PRESS
the new consumer regulator to
Google says feud may be resolved soon
ulator under the terms of a tenta- examine mortgage lenders other
Google chief executive Eric was alarmed by hacking attacks
tive compromise between sena- than banks.
Schmidt said the Web-search gi- that appeared to originate in Chi-
tors who are attempting to craft a Aides to Sen. Richard C. Shelby
ant is in negotiations with China na. Secretary of State Hillary
bipartisan bill. of Alabama, the ranking Repub-
and expects to iron out some dif- Rodham Clinton has since crit-
Under the proposal, the reg- lican on the banking committee,
ferences with Beijing soon. Days icized China’s censorship, leading
ulator would hold broad author- proposed extending examination
earlier, China dismissed reports China’s Foreign Ministry to say
ity to write rules protecting bor- authority solely to the largest
that talks were underway over her remarks damaged bilateral
rowers, but officials would make mortgage lenders during talks
the company’s threat to shut relations. The U.S. Congress has
regular compliance checks only with Dodd’s staff earlier this year.
down in China unless the govern- been holding hearings about
at banks and, for the first time, at Dodd and Corker hammered out
ment relented on censorship. Google, China and Web freedom.
mortgage lenders, a step that still their compromise after those
Google said in January that it — Associated Press
would exclude some of the na- talks broke down. The deal also
tion’s largest and most contro- includes a provision that would
versial lending industries. allow the consumer regulator to
The Obama administration has seek oversight of particular com-
pushed to place nearly all lenders
ASSOCIATED PRESS
panies or industries if it could ECONOMY
under federal oversight for the show a pattern of consumer com-
first time, but Sen. Bob Corker (R- plaints or abuse.
Inventories cut, but sales are up
Tenn.) insisted on limiting the Banking groups generally exert
The Commerce Department said Wednesday that U.S. inventories
scope of the proposed consumer tremendous influence on Capitol
at the wholesale level were reduced 0.2 percent in January following
regulator as a condition of his ne- Hill, and they are pressing sena-
a 1 percent drop in December. Sales were up for the 10th straight
gotiations over a broader package tors to reconsider.
month, rising 1.3 percent, the best showing since a 3.6 percent rise
of regulatory reforms with Sen. “These non-banks are making
in November.
Christopher J. Dodd (D-Conn.), the same kinds of loans, they’re
Economists are hoping that the steady gains in consumer
the chairman of the banking dealing with consumers with a
purchases will soon prompt a sustained rebound in inventory
committee, according to several lot of the same types of products,”
stocking. That would trigger increased factory production and
people familiar with the negotia- said Steve Verdier of the Inde-
provide support for the economic recovery.
tions. pendent Community Bankers of
Republicans argue that there is America. “That proposal to cover Percentage change from previous month
no reason for increased over- the banks and the mortgage Wholesale inventories Monthly sales
1.3%
sight, at considerable expense, of banks is fighting the last war. We
4% 4%–0.2%
industries that played no role in
SUSAN BIDDLE/THE WASHINGTON POST
don’t know where the next prob-
3 3
the financial crisis. A bill being crafted in the Senate would lump mortgage lenders with lem is going to be, and if we leave
2 2
But the proposed exclusion of chartered banks in regards to federal oversight, but it would exempt a loophole open, we know it’s go-
1 1
those industries has drawn oppo- payday lenders, automobile dealers and pawnbrokers. ing to happen somewhere else
sition from an unlikely alliance of and the consumers are not going
0 0
consumer advocates and banking financing and sales for service A Dodd spokeswoman de- to be protected.”
-1 -1
trade groups, who argue that the members will help protect them clined to comment beyond not- But opponents of increased
-2 -2
government should impose equal and will assist us in reducing the ing that negotiations are still in regulation have pressed their
-3 -3
stringencies on all lenders, banks concerns they have over their fi- progress. case effectively.
-4 -4
and non-banks alike. nancial well-being,” Defense Dodd’s efforts to push reform Ed Tonkin, chairman of the Na-
-5 -5
“The point of the agency is to Undersecretary Clifford Stanley legislation through the Senate tional Automobile Dealers Asso- -6 -6
provide a cop on the beat that fo- wrote in a letter dated Feb. 26. continue to depend on his ability ciation, said the practices cited by -7 -7
cuses where the problems are, Corker said in an interview to command the support of at the Defense Department are al-
-8 -8
not a cop that’s fenced off from Wednesday that he wanted to least some Republicans, which ready illegal.
2008 2009 ’10 2008 2009 ’10
some of the worst actors,” said adopt a more consistent ap- has forced him to seek a compro- “Creating new regulatory man-
SOURCES: Associated Press, Commerce Department, Bloomberg THE WASHINGTON POST
Elizabeth Warren, a Harvard Law proach than the financial reform mise with Corker on the shape of dates on top of the numerous fed-
professor who helped to shape legislation passed by the House the new consumer regulator. eral and state requirements that
the administration’s proposal for in December, which excluded The key remaining issue is how already govern auto financing
the new agency. some kinds of lenders, including differences should be resolved will only drive up costs, limit ve-
Even the Defense Department auto dealers and pawnbrokers, between the consumer regulator hicle financing options and, for ALSO IN BUSINESS
has chimed in, sending a letter to from the new agency’s jurisdic- and agencies charged with keep- many consumers, effectively
the Treasury Department urging tion. ing banks in good health. One eliminate their ability to obtain
a71 FHA to explain down payment have pressured it to do.
oversight of auto lenders because “The House had all kinds of proposal would create an appeals financing to meet their vehicle
stance: The Federal Housing Ad- FHA Commissioner David H.
of a pattern of abusive lending to carve-outs,” he said. “We wanted board, in part composed of other needs,” Tonkin said.
ministration has concluded that Stevens plans to tell a House sub-
military personnel. to take a more consistent ap- regulators, to resolve conflicts. appelbaumb@washpost.com
its loan volume would have committee Thursday that in-
“We believe the intervention of proach, to make rule-making ap- On other major issues, the out-
dipped by 40 percent in the next creasing the minimum down pay-
the [Consumer Financial Protec- ply across the entire financial in- lines of a deal already are in Staff writers David Cho and Brady
fiscal year and that 300,000 first- ment on FHA-backed loans could
tion Agency] in overseeing auto dustry.” place. The regulator would be led Dennis contributed to this report.
time home buyers would have have undermined the housing
been shut out of the housing market and led to a double-dip in
market if it had raised its down home prices by vastly reducing
payment requirements from the the agency’s loan volume.
current 3.5 percent, as critics — Dina ElBoghdady
Familiar snags as U.S. targets firms doing trade with Iran
business with Iran. News reports Wednesday said Information Administration said
by Steven Mufson But a senior European Union Royal Dutch Shell Group would Iran’s refinery investments would Post Tech
official has written to Secretary of no longer sell gasoline to Iran, make it self-sufficient by 2013.
CECILIA KANG
Congress and the Obama ad- State Hillary Rodham Clinton though industry sources said Iran also has been stockpiling gas-
ministration are stepping up voicing opposition to congres- Shell has not sold gasoline to Iran oline; in January, the National
Excerpt from voices.washingtonpost.com/posttech
pressure on private companies to sional efforts to impose U.S. sanc- since last year. Trading giant Vitol Iranian Oil Products Distribution
stop doing business with Iran, but tions on European companies. also has said it would end gaso- Co. said inventories rose by 3.77
their efforts are running into the In a Feb. 26 letter, Catherine line sales to Iran. million barrels in nine months,
FCC member criticizes broadband rate hikes
same problems U.S. sanctions Margaret Ashton, the E.U.’s high But oil industry sources said enough to supply all the country’s
have encountered for three dec- representative for foreign affairs that Iranian front companies needs for about a month. A member of the Federal Communications Commission criticized
ades — reluctance in Europe and and security policy, expressed were securing gasoline supplies “We’ve discussed ideas for put- Internet service providers on Wednesday for raising prices on some of
a host of elusive trading compa- “the EU’s deep concern” about the from Abu Dhabi and Dubai in the ting additional pressure on Iran,” their broadband services, just as the agency attempts to bring more
nies eager to sell gasoline and oth- bills because they “envisage the United Arab Emirates and from said State Department spokes- affordable access to U.S. households.
er goods to Iran. extraterritorial application of U.S. Bahrain, and that some compa- man P.J. Crowley, referring to Democratic member Mignon Clyburn said in a statement that
To deter Iran from developing a legislation and would therefore nies in Iraq were making purchas- talks among the five nations coor- increases in prices, like those announced by Comcast earlier this week,
nuclear weapons program, the be contrary to the EU-U.S. under- es on Iran’s behalf. “All you are do- dinating policy to deter Iran from indicate there isn’t enough competition among Internet service
House and the Senate have ap- standing of 1998, under which it ing is transferring sales from one acquiring nuclear weapons. He providers. And she said the agency needs to look into the competitive
proved separate bills that would was agreed that such sanctions company to another,” said a trader said the United States has zeroed landscape to ensure affordability and faster speeds for users.
impose sanctions on companies would not be applied to the EU in in Kuwait. in on energy and financial firms, “Just as we are in the process of proposing steps to ensure that more
that supply gasoline to the Islamic the light of the EU’s commitment As the United States seeks to telling them that “if they choose people are comfortable signing up for broadband service, providers of
republic and on the insurance, re- to work with the U.S. to counter rally international pressure, Iran to do business with Iran, it can that very service are raising prices,” Clyburn said in a statement.
insurance and shipping compa- the threat that Iran poses to inter- has taken steps to wean itself have commercial implications.” Comcast raised its monthly basic tier price for broadband by $2 in
nies that facilitate such trade. And national security.” from imports, which provide 40 mufsons@washpost.com New Jersey and parts of Pennsylvania. The company says it seldom
in the past few weeks, a variety of The United States is trying to percent of its gasoline supplies. raises prices and has consistently been increasing broadband speeds.
companies — including Ingersoll choke off the 130,000 barrels a Though gasoline there is still Staff writer Howard Schneider in “We haven’t increased the price of our service in more than five
Rand, Caterpillar, Siemens and day of gasoline that oil-rich Iran heavily subsidized, costing 38 Washington and correspondent years and about half of our customers are currently in promotions and
Huntsman — have indicated they imports because it lacks adequate cents a gallon, the government Thomas Erdbrink in Tehran won’t be impacted by this change," said Jennifer Koury, a
will stop or have stopped doing refining capacity. has cut quotas. The U.S. Energy contributed to this report. spokeswoman for Comcast.
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