Payday loan industry profits, fights regulation

Keith Epstein of the Huffington Post Investigative Fund provides an inside look at the tactics of the influential $42 billion-a-year payday lending industry, which is thriving from a surge in emergency loans to people struggling through the recession as it pours record sums into lobbying and campaigns. It's getting results, too - most notably in maneuverings in Congress over financial reform.

Money from the 2009 stimulus bill to help support the renewable energy industry continues to flow overseas, despite Congressional criticism and calls for change, according to a new analysis of the program by the Investigative Reporting Workshop. The Workshop was the first to report last October that more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. Since then, the administration has stopped making announcements of new grants to wind, solar and geothermal companies, but has handed out another $1 billion, bringing the total given out to $2.1 billion and the total that went to companies based overseas to more than 79 percent. ABC World News Tonight, Cox Television and The New York Times have used the Workshop's report as the basis for further reporting.

Isaac Wolf of Scripps Howard News Service in Washington reports that "federal authorities have issued a sweeping order for some of the nation's largest debt-collecting companies to open their books. In its first investigation of the $60 billion consumer debt resale market, the Federal Trade Commission has directed the nine companies that buy the most second-hand debt to turn over essentially all purchase and sales records for a six-month period in 2009."

In November and December, a Scripps Howard News Service investigation showed how the development of a market for buying and selling old credit card debts has been blamed for leading collectors to pursue the wrong people, file baseless lawsuits and torpedo credit scores.

Will Evans of California Watch found large corporations in California are getting hundreds of millions of dollars in federal stimulus dollars despite a history of environmental violations and a host of other legal problems.

A two-part report by The Denver Post examines how the federal and state bank regulatory system collapsed in the last decade, failing to catch fraud at New Frontier Bank, one of the costliest bank failures in the country in 2009. A graphic depicts the red flags at New Frontier Bank, comparing performance data with other peer banks.

The Huffington Post Investigative Fund exposes how lending practices at Washington Mutual's subprime lender, Long Beach Mortgage, allowed fraud to run rampant. Former employees say efforts to stop fraudulent loan applications were commonly overridden and lavish commissions encouraged bad lending.

Aaron Glantz of New American Media reports that analysis of data from the federal government's Small Business Association (SBA) revealed racial inequities in small business loans given out as part of the American Recovery and Reinvestment Act. While race is not recorded by Recovery.gov, data from the SBA found that 91 percent of the 4,497 loans where race was reported went to white-owned businesses.

The Buffalo News analyzed loans and grants data to see how the city "spends the federal funds it receives to promote economic development and urban renewal." The analysis showed that two-thirds of the almost $2 million in grant money went to Masten District where the mayor used to serve as councilman. Other regions in need of development, such as Grant Street, did not see much of the grant money. Overall, under Mayor Byron Brown, lending by the Buffalo Economic Renaissance Corp. has dropped significantly. An interactive graphic shows how money has been distributed throughout the city.

Mackenzie Ryan of the Statesman Journal (Salem, Ore.) recently investigated a new and controversial financial strategy in Oregon that attempts to lower a public agency's pension system. The arbitrage strategy - where cities, school districts and the state issued bonds and then invested the money - made pension costs more volatile because "an agency's pension costs are much smaller after good economic times and much larger after tight economic times." Despite years of success, last year $1.9 billion was lost during the economic meltdown.  This may result in layoffs or service cuts to local agencies and the state when pension rates reset in 2011 to reflect investment losses.

A review of government and court records by the Huffington Post Investigation Fund shows that two nonprofit groups worked closely with some of the nation's biggest home builders to broker tens of billions of dollars in no-money-down mortgages. Now these loans are defaulting at up to three times the rate of other FHA loans, one reason the housing agency’s insurance fund is about to drop below its required capital level for the first time since it was created during the Great Depression.