Northern Valley Beacon

Information, observations, and analysis from the James River valley on the Northern Plains----- E-Mail: Enter 'Beacon' in subject box. Send to: Minnekota@Referencedesk.org

Friday, August 26, 2005

 

Meanwhile, back at the ranch, Erin calls MetaBank into account

Yesterday we posted the news that the Iowa Attorney General had obtained an agreement with MetaBank to reduce interest rates on loans for cars that consumers had bought from the Dan Nelson Auto companies. If you pursue the Iowa AGs link at the end of the post, you can inspect all the provisions of that agreement.

However, Erin of Iowa who has tracked the court actions against the Dan Nelson Auto firm and those taken in behalf of customers has posted a comment stating that MetaBank made its loans to Dan Nelson Auto when it knew the company was in serious financial trouble. [Scroll below and read her comment.]

The Iowa AG states that the agreement to provide consumers some relief from exorbitant interest rates and loan terms that are fraudulent will not mitigate the actions he has taken against Dan Nelson Auto.

The implications of MetaBank in this affair reaches deep into a part of the South Dakota economy. The state is referred to by some sardonic observers of the financial community as the Usury Capital of the World. The state made it very attractive and comfortable for lending institutions to conduct their operations in South Dakota.

The relationship of banking institutions and state officials is cause for suspicion. The state put some of its funds into banks and refused to inform the state treasurer how much was in the funds and where they were. Go figure that one out.

Then when state officials had reason to investigate some corporate doings within the banking industry, other officials very quickly passed a "gag law" which made it a crime for any state official to inform the press or the public about any investigations being made into corporate businesses. Our current governor while serving in the legislature led the charge to make sure any news of financial hanky panky was effectively suppressed. While that "gag law" has been modified somewhat, it still remains on the books.

In the meantime, the public has no idea of what kind of transactions and what kind of business dealings the banking industry is supporting in South Dakota.

From the Iowa Attorney General and Erin, we have information about how business practices were investigated and responded to in Iowa.

In the meantime, South Dakota is more interested in protecting its banking cronies than it is in keeping consumers from being ripped off.

I hope Erin keeps us posted on developments in this matter. We need some tips on how to run a government for the people.

Comments:
Dear David, if anyone believes that the recent actions of Metabank in lowering the interest rate for some customers of South Dakota Acceptance Corporation is in any way related to consumer debt relief, I have a glass of bitter Kool Aid from Metabank for them.
Obscene is the only word I can think of when trying to describe the "partnership" that existed between Metabank and Dan Nelson Auto Group. I have difficulty faulting the Iowa Attorney General in their efforts to somehow "squeeze" Metabank. We can only imagine what those "negotiations" must have been like?
Earlier tonight, the camera operator at Fox 17 News in Des Moines, where I was being interviewed, brought up a good point. If this was the best deal that Metabank could agree to, what were the other options?
This agreement is classic Metabank in its self serving entirety, including the comments from Metabank's Chairman of the Board of Directors, Jim Haahr about how this serves the interests of their shareholders. Who was looking after the interests of the shareholders when Jim and Tyler were hard at work, keeping Dan Nelson afloat, so that even more consumers could be taken advantage of?
It turns out that Dan Nelson didn't need the presence of John Thune on Metabank's Board of Directors. Since he had already incurred significant debt in 2003, this guaranteed future open lines of credit just for Metabank to try and catch up to Dan as he "sold, borrowed,spent, sold, borrowed, spent,sold,borrowed and spent and here we are, with potentially $40 million dollars in loan losses. I didn't realize how much truth there was to the term "used car mafia". I mean where else could you get an open line of credit, after 3 lawsuits have been filed, all alleging fraudulent activities? Metabank!!!
All this and a "formerly NOT profitable business", that was NOT fatally wounded by the Iowa Attorney General.
The only fatalities were related to Metabank mortally wounding not only consumers, but the other unknowing, unsuspecting banks that were engaged to assume some of Dan Nelson/Metabank corporate fraud.
These two businesses were partners in "crime", the used car mafia at your service. To coin a favorite Chris Tapken motto, "We buy 'em cheap and fxxk 'em deep". Tony Soprano couldn't have said it any better himself.
In my conversation with one of the attorneys in the South Dakota AG's office today, I outlined in detail, Metabank's continued resistance to releasing of the customer payments on loans owned by outside finance companies. My concerns related to the public perception of the South Dakota Attorney General's "Metabank Propaganda" of late. If there are going to be any further agreements made with Metabank, by any government entity, this blatant disregard for the United States Bankruptcy Court's Order to Release the abovementioned funds has to be addressed first. The ongoing systematic damage being done to the consumer's credit as a result of Metabank illegally refusing to turn over the money to EMCC, cannot be tolerated. Jim and Tyler Haahr should be fired or they should resign. They, as well as Dan Nelson and their collective used car mafia should have to spend the rest of their sorry lives behind bars for inflicting this level of pain and suffering on the very communities in which they live.
 
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