Illinois Government Consultants Incorporated

Mayor Rahm Emanuel on Tuesday proposed raising the retirement age by five years for city employees, increasing employees’ pension contributions by 1 percent a year over the next five years and suspending yearly cost-of-living adjustments for retirees for 10 years to help solve the city’s $20 billion pension crisis.

Emanuel delivered the bitter pill that union leaders have long anticipated during testimony in Springfield before the Illinois House Personnel and Pension Committee.

Emanuel warned legislators that city property taxes could soar by 150 percent and that class sizes at Chicago’s schools would jump to 55 students, on average, unless they pass pension reforms.

“Our taxpayers can’t afford to choose between pensions and police officers, pensions or paved streets or pensions and public health,” he told lawmakers. “Without pension reform, we’ll be forced to mortgage our children’s future to pay for our past.”

It was the mayor’s first trip to the state capitol, and he was greeted like a rock star — a far cry from the cold shoulder he’s getting from union leaders representing city employees. Retiring state Rep. Karen May (D-Highland Park) took a picture of him with her cell phone as he was getting ready to testify.

Emanuel painted the options on pensions in stark terms.   The changes that the mayor outlined to reduce the city’s unfunded pension liability by a projected 40 percent mirror the reforms proposed by Gov. Pat Quinn to solve the state’s pension crisis. But Emanuel’s changes go even further.

Emanuel’s “roadmap to retirement security” calls for:

◆ A 1 percent yearly increase in employee contributions for five years. That would bring the average contribution level a city employee has withheld for his or her pension to 14 percent, city Chief Financial Officer Lois Scott said.

◆ A five-year increase in the retirement age — raising it to 67 for most civilian workers and to 60 for police and fire department workers.

◆ Suspending the annual cost-of-living increase in pension benefits for retirees for now “to stop the bleeding” — a “pause,” he called it, that would remain in place for 10 years under Emanuel’s plan. Emanuel noted that a city employee who retired in 1995 with an annual pension of $60,000 now collects $100,000 a year, thanks to those automatic increases. Over the past 10 years, those benefits have grown at a rate “30 percent faster than inflation,” the mayor said.

◆ Offering newly hired city employees a “choice” between a defined benefits plan and the 401-K plans favored by private industry. Union leaders have long opposed a two-tier approach on grounds that it would create a caste system among rank-and-file members.

◆ No additional contribution from Chicago taxpayers until pension reforms are enacted.

The pension framework Emanuel presented drew joint praise from House Speaker Michael Madigan (D-Chicago) and House Minority Leader Tom Cross (R-Oswego), demonstrating the narrowing if not closed legislative opening that exists for unions to scuttle this plan or the broader pension scale-back Quinn has proposed for the state workforce and downstate and suburban teachers.

“When you’re talking about the concept of pension reform, I like his concept,” Cross said, singling out Emanuel’s bid to halt 3-percent annual retiree cost-of-living increases for the next decade.

“That’s the real pressure point for pensions. It’s what happens in Illinois. If you’re in retirement for 20 to 25 years, you’ll double your pension because of the compounding nature of it,” Cross said. “You can’t sustain it.”

Madigan told reporters that Emanuel’s pan and his presence in Springfield was “helpful on pension reform across the board.”

“I think he delivered his message that the city pension systems need to be reviewed,” the speaker said. “They need to be examined. They’re not financially sustainable as they’re currently constituted. It’s very similar to what we’re doing here at the state level with the state pension systems.”

But labor leaders reacted angrily to the mayor’s proposals and to the secrecy that preceded the announcement.

By far the harshest reaction came from Henry Bayer, executive director of AFSCME Council 31. In a prepared statement, Bayer accused Emanuel of painting a “distorted picture” that omitted important facts.

City employees earn “modest pensions” — just $31,000 for the average member of the Municipal Employees Pension and Benefits Fund — and are not eligible for Social Security benefits. They have also “contributed faithfully” toward those pensions at a rate of eight percent of every paycheck.

“Mayor Emanuel is wrong to propose that city employees and retirees should now be forced to bear the lion’s share of the burden for fixing a system damaged by shortsighted politicians and reckless Wall Street speculators,” Bayer said.

Bayer argued the mayor’s roadmap would lead to “economic insecurity” for city retirees.

“It would significantly reduce benefits and increase costs to employees. While every Social Security beneficiary receives period cost-of-living adjustments, the mayor’s plan would completely eliminate any such adjustments for city retirees for the next decade. This approach is unfair to retirees and it is a violation of the state’s constitution, guaranteed to trigger costly litigation,” he said.

“The unions representing city employees have repeatedly conveyed to the mayor our willingness to work constructively to solve the pension funding problem. Yet, he has never once met with us to hear our view or put forward the suggestions he unveiled today.”

Fraternal Order of Police President Mike Shields noted Chicago police officers have only a 1.5 percent annual cost of living increase when they retire. The mayor “should have considered the Illinois Constitution and also the fact that this is a contract between the employee and the employer. The courts will concur. You can’t reduce or diminish a retirement benefit. It’s not fair. But it’s also expected when dealing with this current mayor’s administration.”

Shields accused the mayor of “trying to scare” city employees and taxpayers with “doom-and-gloom” scenarios that pit the two groups against each other.

“He’s failing to tell the property taxpayer that other sources of revenue can be used outside of property taxes to pay pension costs,” Shields said. “We’ve been asking aldermen to look into applying some of the money from speed cameras. There’s legislation to use casino money to pay into pension funds. There’s also the sale of Midway Airport, [which could be revived and] deliver 49 percent of the pension fund. I’ve even proposed to the city that Midway as an asset should be booked to the pension funds as opposed to the city.”

Tom Ryan, president of the Chicago Firefighters Union Local 2, refused to comment on specifics of the mayor’s proposal, noting they have not been shared with union leaders in Chicago. But Ryan sure sounded like he was bracing for a fight.

“This is all gonna boil down to constitutionality — whether asking for increased contributions or decreasing benefits is even constitutional,” Ryan said.

He added, “You have to understand something. Firefighters and police officers did not cause this problem. This problem was caused by the city not properly funding these pension funds since their inception.”

With few exceptions, organized labor gave Emanuel’s mayoral campaign the cold shoulder, in part, because they feared he would mess with their retirement benefits. The mayor has since tried to collaborate with organized labor.

Asked Tuesday whether the mayor’s pension solutions would undermine those bridge-building efforts, Ryan said, “This is a contentious issue. You’re talking about people’s retirement. People are very touchy when you’re talking about their sole source of income.”

Chicago aldermen, whose lucrative pensions have drawn unflattering attention recently, reacted coolly to the mayor’s proposals.

“I do like the [401-k] idea in regards to the new hires. I’m not so pleased with the [increased] age limit. I’m not so pleased with freezing our COLA. But if that’s what it takes in order for us to become whole, then we’ll all have to swallow the bitter pill,” said Budget Committee Chairman Carrie Austin (34th).

As for the five percent increase in employee contributions, Austin said, “Maybe I can pay more into it. Maybe somebody else couldn’t. For those employees who are already scrimping, I don’t want to impose something like that upon them.”

Austin acknowledged that setting up a two-tiered pension system for new and old employees has the potential to divide the city workforce. But, she said, “It also has the potential of being a disaster if we don’t do something … . If the fund isn’t strengthened, what’s gonna happen? It’s gonna crash. Then, we won’t have a darned thing.”

Ald. Tim Cullerton (38th) is a former deputy building commissioner and a 42-year veteran of the International Brotherhood of Electrical Workers (IBEW) Local 134. He noted that his great-grandfather was a “charter member” of IBEW in 1900.

Cullerton said the mayor’s proposal for a 10-year freeze on cost-of-living increases “might work,” but only for retirees at “certain income” levels.

“It might not work for people who … are just scraping to get by. But people who have comfortable pensions and certainly people who have multiple pensions should pay some type of a windfall,” said the 63-year-old Cullerton, who is already collecting a city pension after 33 years with the Department of Buildings.

As for the five percent increase in employee contributions, Cullerton said, “It would have to be proven that it’s necessary to save the system. If it’s necessary … so that you’ll have a pension when you retire, most reasonable people would have to begrudgingly pay it.”

Laurence Msall, president of the Civic Federation, applauded the mayor for going further than Quinn did to help solve the city’s pension crisis by suspending the annual cost-of-living increase for retirees.

“Actuaries have indicted that the 3 percent increase — not indexed to inflation, but compounding automatically — is responsible for almost one-third of the unfunded cost of these benefit programs,” Msall said. “At a time when city employees are being asked to do more with less and taxpayers are being asked to maintain tax payments while their housing values decline, asking retirees to forego an automatic increase is a reasonable and fair approach.”

Msall said he recognized that the retiree changes and the increase in employee contributions are likely to go over like a lead balloon with union leaders.

But he said, “The issue for the employees is: Would they rather have a lower benefit going forward that the city can afford to fund that’s likely to be there, or would they rather maintain the existing system, which is grossly underfunded and is poised to run out of money within 10 to 20 years? Face reality. This isn’t politics. This is math. It’s a financial crisis that threatens the financial solvency of the city of Chicago.”

Source:  The Chicago Sun-Times

Source:  The State Journal Register - The Oldest Newspaper in Illinois

The Senate failed Tuesday to advance a bill to keep federally subsidized college student loan rates lower for another year, prolonging debate on an issue that has emerged as an election-year flashpoint.

On a party-line vote, senators voted 52 to 45, short of the 60 votes necessary to proceed to debate on the bill. There is no clear path forward at the moment for lawmakers, who have until July 1 to reauthorize lower rates for roughly 7 million borrowers who could see rates on subsidized student loans jump from 3.4 to 6.8 percent.

Democrats and Republicans agree that the loan rates should remain low, but — as with most noncontroversial issues these days — lawmakers disagree on how to pay for the plan.

The issue is of growing concern among younger voters and their parents, and has dominated the campaign trail in recent weeks. Using his campaign bully pulpit, President Obama has pushed Congress to quickly approve an extension of the lower rates for another year, and presumptive Republican presidential nominee Mitt Romney has done the same.

A House Republican plan approved in late April would pay for the lower rates by cutting almost $6 billion from a preventative health-care fund. Republicans want to hold a vote on the plan in the Senate, but Democrats oppose it and pushed a plan to pay for the extension by ending tax breaks for firms with three or fewer shareholders — commonly referred to as “S-corporations.”

In a statement, the White House said it was “extremely disappointing” that Republicans voted against keeping loan rates low in favor of protecting people who take advantage of the S-corp tax loophole.

Before the Senate vote, Senate Minority Leader Mitch McConnell (R-Ky.) called Democratic attempts to block the GOP proposal part of Obama’s “cynical election-year strategy.”

“Rather than working with Republicans to help young people in this country weather the effects of the ‘Obama economy,’ Democrats have sought to distract them from it,” McConnell said.

“What matters now for Democrats is that they find a way to drive a wedge between Republicans and a constituency that they’re looking to court ahead of the November elections,” he added. “That’s what today’s vote is all about for them.”

But Sen. Jack Reed (D-R.I.) called the S-corp tax provision an “egregious” loophole that should be closed regardless of the student loan vote.

An an event earlier Tuesday, Reed and Sens. Sherrod Brown (D-Ohio) and Tom Harkin (D-Iowa) were joined by dozens of college students who support extending the lower rates.

Harkin insisted that Democrats offered Republicans a chance to vote on their version of the measure alongside the Democratic one, if they would agree to allow the Senate to proceed to a full debate on the bill. But Harkin charged that GOP leaders rejected that proffer because they did not want to force their own members to vote to eliminate the preventative care fund.

“We have a serious offer on the table — to close a tax loophole … that’s allowing a lot of people to avoid paying their fair share for social security and Medicare,” he said.

Republicans have noted that Democrats had signaled a willingness to cut the same preventative care fund during negotiations over how to pay for extending the payroll tax vote. But Harkin said there’s a difference between reducing the fund, which Democrats had said could be acceptable, and eliminating it, as Republicans now propose. “It’s the difference between taking a couple of pints of your blood or taking all of your blood,” he said.

But asked by reporters if negotiations are underway over a way to pay for the student loan reduction that would be acceptable to both Republicans and Democrats, the group said only that they are willing to listen to ideas and that the Democratic proposal is reasonable.

“We’re still open to sensible proposals to pay for this,” Reed said.

Source:  The Washington Post

Updated with President Obama comments, Daley to co-chair re-elect….

NASHUA, NH–White House chief of staff Bill Daley is resigning, President Obama announced on Monday, departing earlier than expected after a rocky tenure. Daley will be replaced by Budget Director Jack Lew. He will become a co-chair of Obama’s 2012 re-election campaign, based in Chicago.

President Obama discussed the move flanked by Daley and Lew, not taking questions after brief comments. Obama said he originally did not accept Daley’s resignation. Daley’s departure comes a day before Obama returns home to Chicago for three fund-raising events.

Obama said Daley was leaving for reasons that seem very vague: to return to Chicago and to spend more time with his family, especially his grandchildren.

“I didn’t accept Bill’s decision right away. In fact, I asked him to take a couple of days to make sure that he was sure about this. But in the end, the pull of the hometown we both love — a city that’s been synonymous with the Daley family for generations — was too great. Bill told me that he wanted to spend more time with his family, especially his grandchildren, and he felt it was the right decision.”

“…I plan to continue to seek Bill’s advice and counsel in the years to come,” Obama said.

Daley will become a co-chair of Obama’s 2012 re-election campaign, based in Chicago.

“He’s got a ton of political experience, knowledge and contacts and we look forward to leveraging those assets and working closely together to re-elect the President this year,” a member of the Obama team told the Chicago Sun-Times.

In his resignation letter, dated Jan. 3, Daley wrote to Obama, “I have been honored to be a small part of your administration. It is time for me to go back to the city I love.”

Daley, a former Commerce Secretary and brother of former Mayor Richard Daley, followed Chicago Mayor Rahm Emanuel in the job last year, but seemed mismatched for the position as the political and governmental situations changed. Daley was not close to Obama and the two did not share much in common except political strategist David Axelrod and Emanuel.

Last year, Daley told NBC5 Chicago that he was going to stay only through the end of Obama’s first term. Last year, Daley was put in an uncomfortable position within the White House after much sniping and infighting–he was demoted from running day-to-day operations, turning them over to Pete Rouse, who served as interim chief after Emanuel left.

Daley, a former Chase Bank executive, was hired in part to be a bridge between the White House,the business community and the Republicans in Congress–a job that soon ceased to exist as relations continued to fray–especially with Republicans– and eventually snap all together.

The beginning of the end for Daley started in October, in an interview he gave to to Politico’s Roger Simon where he blamed congressional Democrats–as well as Republicans–for the deadlocks.

“On the domestic side, both Democrats and Republicans have really made it very difficult for the president to be anything like a chief executive,” Daley said. “This has led to a kind of frustration.”

At that point, Daley barely had a relationship with Senate Majority Leader Harry Reid (D-Nv.) and by November, his position was reconfigured with Rouse taking on the day-to-day role.

Daley “retains obviously all of his authority and ultimate responsibility for the White House operations and White House staff,” White House press secretary Jay Carney said at an early November briefing. “… It’s less about transferring duties than it is about adding responsibilities without subtracting any from anybody else.

Daley was tapped by Obama in January, 2010 and started a few weeks later.

Obama, in naming Daley said then, “Few Americans can boast the breadth of experience that Bill brings to this job. He served as a member of President Clinton’s Cabinet, as Commerce secretary . . . He’s led major corporations. He possesses a deep understanding of how jobs are created and how to grow our economy. And, needless to say, Bill also has a smidgen of awareness of how our system of government and politics works. You might say it is a genetic trait.”

Daley returned to Washington from the banking world, the Midwest chief for J.P. Morgan Chase since 2004, before that president of SBC. He’s also run Chicago’s Amalgamated Bank and as a partner at the law firm of Mayer Brown, handled government relations, with his close relationship to the late Rep. Dan Rostenkowski very helpful. Obama White House policy will call for Daley to recuse himself from any J.P. Morgan matter for two years.

One of Daley’s major accomplishments was as “NAFTA Czar,” winning congressional approval for then-President Clinton of the North American Free Trade Agreement — with a big assist from Emanuel. Clinton named Daley to the Fannie Mae board and in his second term made Daley his Commerce secretary, where Daley performed for the first time on a global stage.

Vice President Gore drafted Daley to take over his troubled 2000 presidential bid. By that time Daley had advised the 1988 Biden presidential campaign and Vice President Mondale’s 1984 bid.

In October, Daley said his best day on the job was the Sunday when Osama bin Laden was killed by U.S. forces. The worse day was when negotiations failed for a deal to raise the debt ceiling.

Chicago community organizer has roots and clout dating to 1960s but current issues hang over his multimillion-dollar empire

The Rev. Leon Finney Jr. is a noted community organizer on Chicago’s South Side, and some of his related multimillion-dollar business operations are under scrutiny. (Abel Uribe, Chicago Tribune / December 9, 2011)

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The Rev. Leon Finney Jr. built a name for himself in the 1960s by fighting slumlords and helping to save his Woodlawn community from being swallowed by the University of Chicago.

The community group he came to lead, The Woodlawn Organization, became a national model as Finney built a network of social programs and gained control of millions of dollars in publicly funded development.

But now Finney’s business dealings are being questioned on a number of fronts.

Federal housing authorities are investigating allegations that the Gary Housing Authority was overbilled by $850,000 for payroll expenses related to public housing projects managed by the Woodlawn Community Development Corp., where Finney is chief executive.

A federal lawsuit filed by Finney’s former chief financial officer alleges a host of financial improprieties, from ghost payrolling to the use of government money for Finney’s private pursuits, including a family-owned restaurant.

In addition, government-mandated audits, court records and other documents obtained by the Tribune show:

•A federal housing consultant lived in a Woodlawn apartment owned by a company run by Finney while in charge of monitoring property management contract awards in Gary. During that time several contracts went to the Woodlawn Development Corp. Court records show the consultant failed to pay $17,000 in rent on the apartment.

•In several instances, government subsidies awarded to one low-income housing development were used to pay the utility bills and other expenses of unrelated properties, a violation of federal rules governing those funds.

•The Woodlawn Organization, headed by Finney’s wife, Georgette Greenlee Finney, spent $132,000 to lease office space from a real estate company owned by Finney, a 2008 audit shows.

Finney, 73, declined to comment on the Gary investigation, as well as most of the allegations made in the federal lawsuit filed by his former chief financial officer, Virgil Savage. His attorney, Devlin Schoop, also declined to comment.

However, Finney acknowledged financial problems at The Woodlawn Organization and its network of nonprofits and property management companies, which have been sued for a host of unpaid bills.

That has led to a scramble to “keep it all together” by shifting money from one organization’s bank account to another’s in an effort to pay bills, Finney said.

Finney’s network of organizations and companies runs seven social services programs and manages or owns roughly 5,000 subsidized apartments in Illinois and northwest Indiana.

“When you have no stockholders to go to get an additional capital infusion, in an effort to try to keep it all working, in instances you borrow from one property to another in order to keep the whole working and you hope that in the interim you can pay it back,” he said.

But, Finney insisted, “No money has gone into my pocket or anybody’s pocket.”

Attorneys with the Gary Housing Authority confirmed the agency is cooperating with an investigation by the federal department of Housing and Urban Development. HUD officials declined to comment.

Gary housing officials said the investigation is largely based on allegations made by Savage, who in 2010 was fired as chief financial officer for The Woodlawn Organization and its affiliated entities after about 2 1/2 years.

In his lawsuit, filed last winter, Savage, 53, claims he was fired shortly after he sent an internal memo to the organization’s board members that accused Finney of using money budgeted for federally subsidized properties for his personal benefit and to pay employees of Finney’s church.

“That’s when our relationship began to sour,” Savage said.

Source: Chicago Tribune

WASHINGTON (AP) — A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011.

The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months.

The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn’t happened since April 2006.

“There is no question that today’s employment report is a positive and there is also no question that the pace of job growth has accelerated of late,” said Dan Greenhaus, an analyst at BTIG LLC, a brokerage firm

A better job market is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

Still, the level may matter less to his re-election chances if the rate continues to fall. History suggests that presidents’ re-election prospects hinge less on the unemployment rate itself than on the rate’s direction during the year or two before Election Day.

For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. The unemployment rate averaged 8.9 percent last year, down from 9.6 percent the previous year.

Economists forecast that the job gains will top 2.1 million this year.

The December report painted a picture of a broadly improving job market. Average hourly pay rose, providing consumers with more income to spend. The average work week lengthened, a sign that business is picking up and companies may soon need more workers.

And hiring increased across most major industries.

Manufacturing added 23,000 jobs, as did the health care industry. Transportation and warehousing added 50,000 jobs. Retailers added 28,000 jobs. Even the beleaguered construction industry added 17,000 workers.

Economists cautioned that some of the gains reflected temporary hiring for the holiday season. The government adjusts the figures to account for those seasonal factors, but doesn’t always fully account for them.

The gains in transportation and warehousing, for example, reflected a strong increase in hiring for couriers and messengers. That could stem from a big jump in online shopping over the holidays, the department said.

The nation’s work force, which includes both people working and those searching for jobs, shrank slightly last months and is little changed from this spring. That’s a concern because a strengthening job market normally draws more applicants.

The work force has declined by about 160,000 over the past two months, one reason the unemployment rate has fallen.

“You have to take that unemployment rate decline with a grain of salt when you look at the declines in the labor force,” said Marisa DiNatale, an economist at Moody’s Analytics.

The government only counts people as unemployed if they are actively searching for jobs. Discouraged workers who have given up on looking are not included in the rate.

And some of those who are counted as employed are working part time, but want full-time work.

When including those groups, the broader “underemployment” rate was 15.2 percent. That’s down from 15.6 percent the previous month, but still high. The figure has dropped for three straight months.

And the job market has a long way to go to recover from the Great Recession. The nation has 6 million fewer jobs that it did in December 2007, when the recession began.

More jobs and higher pay are crucial to helping the economy grow. They could enable shoppers to increase spending, which fuels 70 percent of economic activity.

The economy likely grew at an annual rate of above 3 percent, a healthy pace.

A more robust hiring market coincides with other positive data that show the economy ended the year with some momentum.

Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday sales were solid. And November and December were the strongest months of 2011 for U.S. auto sales.

Many businesses say they are ready to step up hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products.

Source: The State Journal Register - The Oldest Newspaper in Illinois

WASHINGTON (AP) — With its first chief now in place, the new Consumer Financial Protection Bureau will start enforcing rules aimed at reining in abusive mortgage servicers, student lenders and payday-loan companies.

It will be months, though, before the agency can police other areas of consumer finance, such as debt collection and credit-reporting bureaus.

Over Republican opposition, President Barack Obama used a congressional recess appointment Wednesday to install Richard Cordray to lead the consumer finance watchdog. The bureau was created in July as part of the 2010 overhaul of the nation’s financial regulations.

The idea behind the new agency was to prevent financial companies, such as mortgage servicers, from exploiting consumers. Such companies, facing scant federal oversight, committed some of the worst consumer abuses before the financial crisis.

In the past, only banks were subject to examination by federal financial regulators. And until now, with no permanent director, the bureau had authority to supervise only big banks.

Senate Republicans had vowed to block Cordray’s nomination until the agency’s structure was changed to allow closer congressional oversight. But Obama took advantage of the congressional break to install Cordray, a former Democratic attorney general of Ohio.

Cordray said he would immediately “begin working to expand our program to non-banks, which is an area we haven’t been able to touch up until now.”

That change will likely start within weeks. Agency officials who are supervising big banks have already been trained to examine non-bank financial firms.

Still, some areas of consumer finance will remain outside the bureau’s reach. Aside from payday, mortgage and student loan companies, the consumer protection bureau can supervise only non-bank companies it defines as “larger participants” in their markets.

In June, the agency sought public comments on a proposal to supervise major debt collectors, credit reporting bureaus, check cashers, issuers of prepaid debt cards and debt-relief companies. The comment period has ended, and the agency is reviewing the responses. It’s not clear how long the review will take.

Once the comments have been reviewed, the proposal must be revised, subjected to further public comment and then approved by the White House. This could take months or years. If the agency’s proposal is approved, it will be able to send inspectors to credit bureaus and others that meet the “large participant” definition.

Here’s a guide to the powers that the CFPB now hold over different categories of companies:

— Non-bank mortgage lenders and servicers:

These companies have been subject to existing laws and rules, but the agency was unable to supervise them without a permanent director. With Cordray’s appointment, the CFPB can have officials monitor mortgage lenders and servicers. That might discourage any from using “robo-signers” to foreclose on borrowers without doing the required paperwork. That practice became widespread over the past decade, and no federal agency was responsible for cracking down.

— Payday lenders:

Companies that make short-term loans to borrowers with weak credit already are governed by federal laws such as the Truth in Lending Act. But there’s been no federal oversight to make sure they comply. The CFPB can now send examiners to payday firms it suspects of illegal or abusive practices. The agency wants to make sure they disclose the full cost of a loan upfront so consumers can make an informed choice.

— Private student lenders:

CFPB examiners also have gained the ability to examine these companies. The federal government has been cracking down on for-profit education companies whose graduates can’t find jobs and have little chance of repayment. The CFPB can now require these lenders to follow existing rules and write new ones intended to guarantee that they lend fairly.

— Prepaid debit card companies, credit bureaus, money-transfer companies, check cashers, debt relief services:

These companies are subject to federal laws. But they’ve faced little oversight in the past. The CFPB proposed in June identifying major participants in those markets that it will oversee to make sure they’re following the rules. It’s unclear when that proposal might take effect.

— Big banks:

Nothing much will change. Since its creation, the agency has been placing full-time examiners in the nation’s biggest banks to enforce laws and rules. It can require them to file regular reports, monitor risks they might pose to consumers and write new rules.

Source: Chicago Tribune

DES MOINES – Caucus day arrived Tuesday morning as Iowans would expect it: sunny, chilly and wonderfully unpredictable. By nightfall, Mitt Romney will know whether his carefully calibrated strategy paid off.

They call Iowa a three-person race between Romney, Rep. Ron Paul (Tex.) and former Pennsylvania senator Rick Santorum, the dark horse who suddenly emerged from back in the field in the final two weeks here. Any of the three might win, or so the gossip that is swapped as intelligence in hotel lobbies and at candidate rallies suggests.

Paul has his committed army and a turnout operation that has a good reputation but has yet to prove its mettle. Santorum is surging, or at least rising, and the shorthand on Iowa has always been to get hot late and ride the wave. Romney has a veteran operation and the longest initial list of supporters. Whatever. In reality, this contest is mostly about Romney — at least until one of the other candidates proves otherwise.

Months ago, the former Massachusetts governor and his campaign team were telling anybody who would listen that he couldn’t or wouldn’t win here. Memories of 2008 were still unhappy ones. Romney had poured millions of dollars into the state, won the straw poll in August 2007 and led in public opinion polls into the fall. Then he saw Mike Huckabee and his organic grass-roots organization suddenly rise up and overtake him in the final month. The loss was crushing.

There would be no repeating that sad exercise in this campaign, or so his team vowed. Among the lessons learned from 2008 was not to be put too many resources where they weren’t absolutely necessary. Headquarters slimmed down. Campaign events — other than fundraising — were fewer. Television interviews were kept at a minimum.

Iowa was Exhibit A of that change in thinking. Romney has been parsimonious about investing in Iowa from the start. When other candidates started making repeated visits in 2010 (remember Tim Pawlenty!), Romney stayed away. In the fall of 2010, he came to campaign for Terry Branstad, who was running (successfully) for governor, but barely left any footprints.

While other candidates put their hopes into Iowa—Santorum and Michele Bachmann particularly—Romney held back. He kept everyone guessing, and there were repeated waves of media stories saying, “Is he in or isn’t he? Is he trying to win or not?”

The shifting sentiments of Republican voters and the ups and downs of other candidates made decision-making at Romney headquarters that much more challenging, as the campaign tried to manage expectations and lay out a game plan for this first caucus state.

At different points over the past few months, Romney’s advisers have been presented with conflicting scenarios. At one moment it would be, “Well, with a little more effort, maybe victory is possible.” At another it might be, “Well, it will take a little more effort to avoid an embarrassing finish,” however defined.

Back in Iowa, his small team, led by strategist Dave Kochel, kept working the lists, maintaining contact with past supporters, showing up at party functions and tending to business.

Sometime in December, managing expectations became a losing proposition. Public opinion polls showing Romney narrowly ahead overrode the spin coming from the Romney team about “anything can happen.” Although not incorrect, that assessment was drowned out by everything else. Which is why on caucus morning, so much attention focused on the former governor.

Romney might not need to win here, but he is certainly in a position to do so, and victory would be particularly sweet if Paul and Santorum finished immediately behind him. That would relegate to fourth place or lower Texas. Gov. Rick Perry and former House speaker Newt Gingrich, the two rivals who have felt the negative sting of the Romney operation and who have been seen as the most threatening overall.

Romney would be happy to finish off the race as quickly as possible, although it seems destined to run through South Carolina and into Florida no matter what happens in Iowa and New Hampshire. His rivals have vowed to keep going. Several are largely avoiding New Hampshire (except for weekend debates) to campaign in South Carolina, where Romney doesn’t have the kind of built-in advantage that any Massachusetts politician has in New Hampshire.

Still, as caucus day opened, no one could say with any certainty what the order of finish would be. And so the wait began.

Source: Washington Post

Mayor Rahm Emanuel today said he erred last month when he said tighter protest rules and higher fines for thwarting police would be temporary measures designed just for a pair of spring meetings of international leaders in Chicago.

“I misspoke, and I take responsibility for the confusion,” Emanuel said at an unrelated news conference. The mayor meant to say that only the blanket spending authority for the G8 and NATO conferences, which he is seeking along with the other measures, would be temporary.

The mayor’s description of his errant statement came after protest leader Andy Thayer, noting today’s Tribune story that explained how the measures were permanent, accused the mayor of lying.

“Mayor Emanuel has frankly lied when he said that these ordinance changes would be temporary,” Thayer said. “He knew what it was about.”

Thayer and other members of the Coalition Against the NATO/G-8 War and Poverty Agenda this morning filed a permit application for a mass march on May 19 that would start at Daley Plaza and end at McCormick Place, where the NATO and G-8 summits are to be held.

Before filing the application, Thayer stood before a throng of television cameras, calling on Emanuel to reverse course on the proposed protest changes and aldermen to reject them before the Jan. 18 City Council meeting.

Don Rose, a political consultant who was an anti-Vietnam War spokesman during the troubled 1968 Democratic National Convention that led to riots, also spoke. He said tougher protest restrictions could trigger “acting out” by frustrated protestors seeking to peaceably demonstrate.

“I was one of the organizers when the whole world was watching, and I see some unfortunate parallels here,” Rose added, saying the “Battle of Michigan Avenue” was touched off in 1968 after marchers took to the sidewalks after being unable to get permits. “If they are serious about protecting first amendment rights, they will expedite and cooperate in giving the parade permits.”

Emanuel’s proposed new rules would double the maximum fine to $1,000 for protestors charged with resisting or obstructing a police officer, as well as those helping protestors escape custody. The minimum fine would soar to $200 — a $175 increase.

The duration of demonstrations would be reduced by 15 minutes to exactly two hours. Public parks and beaches would be closed until 6 a.m., two hours later than now. Loud noise, amplified sound and music at parades and public assemblies would be allowed only between 8 a.m. and 10 p.m.

“Every piece of sound equipment would need to be registered with the city a week in advance,” Thayer said, citing one of the proposed revisions he believes is unworkable. “You can’t predict who’s going to show up with a bullhorn, who’s going to show up with a megaphone or what have you.”

Emanuel, meanwhile, again said his intent is to allow world leaders to meet and conduct their business while also protecting protestors rights to free speech.

“Our fee structure hadn’t been updated in 20 years,” he said of the proposed fine increases. “We’re bringing it more in line.”

The NATO and G-8 summits are scheduled for May 19-21 at McCormick Place. Emanuel has stressed that the event in President Barack Obama’s hometown is a chance to showcase the city, while some observers note riots have resulted in other cities where those groups have met.

Emanuel was back on the job today with a tan after spending much of the last two weeks vacationing with his family in South America. The mayor, his wife, Amy Rule, and his three school-aged children went to Chile and Argentina on a 70-mile white water rafting trip. They also spent their time outdoors fly fishing and hiking, the mayor said. And the Emanuels brought in the New Year in Buenos Aires.

“Every year we try to take the kids to a different part of the world to see,” Emanuel said. “When you grow up again, you want to be an Emanuel child at some point.”

Source: Chicago Tribune