“Buying a car is a significant purchase for many Americans and should be a fair and transparent transaction, free of discrimination,” said House Financial Services Committee Chair Maxine Waters (D-Calif.) at a recent hearing on discrimination in the automobile loan and insurance industries. “Unfortunately, this is not the case for persons of color.”
“I’m not sure where I start with this,” said Rep. Joyce Beatty (D-Ohio), who is chair of the Subcommittee on Diversity and Inclusion. Speaking about inaccuracies of a race identification method based on name and location, she said, “It works two ways because it could also not only hurt African Americans but benefit folks who might not be a minority that live in a minority neighborhood.”
But earlier this year, Waters, Beatty, and six other Democratic members of the Financial Services Committee appeared at fundraisers for their campaigns attended by representatives of the political action committee of the American Financial Services Association (AFSA), an industry trade group that last year hailed, and directly lobbied on, a Republican resolution repealing a Consumer Financial Protection Bureau (CFPB) guidance that sought to cut down on racist auto lending practices.
In response to a Sludge inquiry about the contributions, Waters said she will have her campaign scrutinize more thoroughly who is making donations.
“I very much appreciate your sharing this information with me concerning the American Financial Services Association and will instruct my political accountant to better vet and monitor contributions my campaign receives,” said Waters. “Furthermore, we will thoroughly review and discuss all contributions and donors attending any events we organize to determine if our campaign should accept their contributions.
We will thoroughly review and discuss all contributions and donors attending any events we organize to determine if our campaign should accept their contributions.
House Financial Services Committee Chair Maxine Waters (D-Calif.)
“My record as a progressive and fighter for fairness and justice is unassailable,” Waters continued. “I’m very proud of my work and accomplishments on the Committee and position on the issues affecting American consumers. My vote has never been and never will be for sale.”
The CFPB, an agency created by the Dodd-Frank legislation that Waters helped write in the wake of the 2008 financial crash, established its auto lending guidance in 2013. Car dealers, who often connect buyers with third-party lenders and set the interest rates on the loans, sometimes charge additional interest, a “dealer markup” from which they profit. Research shows that dealers charge higher markup rates to black and Latino car buyers than to white customers. The CFPB guidance sought to tamp down on this racist practice, but Republicans successfully quashed the guidance last year.
Donations to Racist Pro-Trump Group
While AFSA opposes protections against racist loan practices, it has also given significant funds to a pro-Donald Trump political nonprofit, America First Policies, that’s been associated with racism and anti-Semitism. In 2017, AFSA donated $125,000 to the group, according to a federal tax document, as MapLight reporter Andrew Perez first revealed. This was the only grant that the AFSA disbursed that year, and it gave no grants in 2016.
Several companies also gave large sums to America First Policies, and soon after MapLight first reported this in May 2018, CVS Health, Southern Company, and Dow Chemical announced that they would no longer support the group. MapLight’s reporting came after CNN and Mediaite had reported that multiple America First Policies staffers made “racist, sexist, anti-LGBT, and anti-Muslim” comments, and another praised Nazis.
“The Republican and Trump-aligned organizations you’ve identified who may have been supported by the AFSA have never received my votes or my support on their legislative efforts to dismantle the Consumer Financial Protection Bureau or other protections for women and minorities,” said Waters. “I’ve been leading efforts to reverse the damage Mick Mulvaney wrought during his tenure as CFPB acting director.”
Campaign Contributions to Financial Service Dems
In the first three months of 2019, eight Financial Services Democrats took in $24,000 in campaign donations from AFSA’s political action committee, AFSAPAC. Beatty, Waters, Rep. Denny Heck (Wash.), and Rep. Lacy Clay Jr. (Mo.) all accepted the maximum donation of $5,000. Beatty’s contribution came during a Feb. 26 dinner, and Waters’ came during a Jan. 29 fundraising dinner hosted by her campaign. Heck got $1,000 at a Feb. 8 lunch event and $4,000 in late March, a donation that came with the description, “2019 Heck MAX OUT Program.” Clay got his $5,000 at a “Clay AFSA Summit Fundraiser” on Feb. 12.
Beatty owns between $1,000 and $15,000 worth of stock in Huntington Bancshares, the holding company of Huntington National Bank, an auto lender and AFSA member.
One Financial Services Democrat, Rep. Vicente Gonzalez of Texas, a member of the centrist Blue Dog Coalition, voted for the 2018 resolution to kill the auto loan guidance, while the other seven Democrats who received AFSAPAC contributions this year voted against it. Gonzalez accepted $1,000 from AFSAPAC at a Feb. 6 lunch.
Reps. Madeleine Dean (Pa.), Bill Foster (Ill.), and Ed Perlmutter (Co.) each received $1,000 at similar events.
The offices and campaigns of Beatty, Clay, Dean, Foster, Gonzalez, Heck, and Perlmutter did not return requests for comment.
Despite her criticism of Wall Street, Financial Services Chair Waters accepts a lot of campaign donations from the industry her committee oversees. Waters is following through on her “open-door” policy with industry; in 2019’s first quarter, 82% of her $210,000 worth of contributions came from corporate and other PACs. The insurance industry is her most generous industry donor, but she also received contributions from the PACs of lending organizations including the Online Lenders Alliance ($2,500), AFSA member Quicken Loans ($5,000), and NelNet, and from financial institutions including Charles Schwab PAC ($5,000), Arch Capital Group ($2,500), and Hartford Financial Services Group ($2,500). She also received $5,000 from the PAC of Toyota Motor North America, which operates subsidiary Toyota Financial Services, an auto lender and AFSA member.
In the 2018 election cycle, Waters’ campaign took in nearly $336,000 from corporate PACs in the finance, insurance, and real estate sector, including $28,500 from PACs in the finance and credit industry.
Republicans on the Financial Services Committee have gotten more campaign cash than their Democratic counterparts this year. The PACs and leadership PACs of 13 GOP members received a total of $43,500 in the first quarter. Rep. Andy Barr’s (Ky.) campaign appears to have accepted $5,500 from AFSAPAC, $500 over the legal limit, some of it from an event listed as “Barr McHenry Brkfst.” Barr’s leadership PAC got another $5,000 after a March 7 “BARR PAC Kick Off AC.”
Barr was the keynote speaker at an AFSA conference in 2016—a year during which he also received donations from AFSAPAC—where he “supported the group’s call for easier access to consumer debt and a rollback of federal restrictions on lending practices.”
The Kentucky congressman’s spouse owns between $1,000 and $15,000 worth of stock in Keycorp, which operates subsidiary KeyBank, an auto lender and AFSA member.
Other GOP recipients of AFSAPAC donations this year include ranking member Rep. Ann Wagner (Mo.), who got $4,000, and Blaine Luetkemeyer (Mo.), whose campaign and leadership PAC each received $5,000.
Party committees and multi-candidate PACs have accepted money from AFSAPAC as well. The Democratic Congressional Campaign Committee got $15,000 for a “DCCC Dems Dinner & PAC 15 Mbrshp.” The PAC of the moderate New Democrat Coalition, which counted Dean, Foster, Gonzalez, Heck, and Perlmutter as members as of April 11, got $5,000 for a 2019 “membership.” The PAC of the Congressional Black Caucus, of which Beatty, Lacy Clay Jr., and Waters are members, scored $5,000 from AFSAPAC for a Feb. 9 CBC PAC breakfast and for “’19 Chrmans Cir.”
On the GOP side, the National Republican Congressional Committee and the National Republican Senatorial Committee each got $15,000.
As AFSA’s PAC showers House Financial Services Committee members with campaign donations, its lobbyists are trying to impact legislation that will affect its member companies’ profits. In the first quarter of 2019, the group lobbied Congress and the CFPB on installment lending, vehicle financing, GAP vehicle insurance, and future legislation on unsolicited loan applications, among other matters. Former Democratic House staffer Jason Rosenstock of Thorn Run Partners lobbied Congress for the AFSA on auto loans and other issues.
The AFSA boasts 440 members, including auto loan companies Ally Financial, CarMax Auto Finance, Chase Auto Finance, General Motors Financial, Nationwide Acceptance, and Toyota Financial Services.
“AFSA maintains high-level relationships with Congress, regulatory agencies, industry trade groups, and state legislature and regulatory groups,” states the group’s website. “We work closely with our members to develop comment letters, amicus briefs, white papers, and testimony…Our members’ voice is amplified through fly-ins, regulator meetings, and our influential and growing AFSAPAC.”
