Editorials published by the Goffstown Residents
Association are written by various members and
contributing non-members of the GRA.

October 17, 2008

Shaheen vs. consumers: A tale of corruption

Jeanne Shaheen claims she'll be a tougher overseer of financial institutions than John Sununu has been. Voters who remember Providian National Bank know otherwise.

The remnants of the former Tilton-based credit card issuer evaporated last week when Washington Mutual, which bought Providian in 2005, went under. Thus did one of Jeanne Shaheen's great corporate benefactors disappear. 

Providian specialized in issuing credit cards to low-income people and those with poor credit ratings. It then proceeded to systematically rip them off. In 2000, Providian reached a settlement in San Francisco with the Office of the Comptroller of the Currency, the state attorney general and the district attorney. It agreed to pay $300 million to former customers it had been accused of deceiving out of their money. Later that year, it paid $105 million to settle several class-action lawsuits.

In the five years leading up to 2002, the state of New Hampshire received 247 consumer complaints against Providian. But in April 2002, the Legislature passed legislation written by Providian to relax consumer protections for credit card holders. Shaheen quickly signed it.

Among the bill's provisions: Credit card issuers could change the amount or number of required payments unilaterally, provided they sent written notice to customers at least 15 days in advance. It even allowed banks to switch customers from a fixed rate to a variable rate. 

In the past few weeks, Shaheen has taken to using the term "predatory lending." That is just what this bill allowed. And she signed it. Why in the world would she do that?

The official reason was that the state would lose jobs if the bill didn't pass. But just one year after the bill passed, Providian's employment in New Hampshire had fallen from 470 to about 150. It was all a ruse. The real reason Shaheen signed the bill can be found by following the money.

In1998, Providian's PAC gave Shaheen $5,000. From 1998 through 2000 its executives gave her $20,450. But that was small change.

Providian donated millions to childhood education, a key political issue for Shaheen. In 1999 Shaheen announced the creation of a new nonprofit advocacy group, New Hampshire Business Partners for Early Learning. It was financed by Providian. The group hired Shaheen's 27-year-old daughter, Stefany Shaheen, as its executive director though she had no executive experience and had worked previously as an administrative assistant and research assistant.

Jeanne Shaheen talks as if she's always supported protecting consumers from the misdeeds of big firms. But when she was governor she had to choose between the two, and she chose to rewrite the law so it disadvantaged consumers and favored a bank that was a big campaign donor even though it had a history of deceptive lending practices.

According to Shaheen, Sen. John Sununu is in the pocket of financial institutions, though in reality he has spent years pressing for substantial reforms and increased oversight of mortgage lenders and insurance companies. Her record, on the other hand, reveals that as governor she actually sold out consumers in exchange for money and a cozy relationship with a major national bank.

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  Copyrightę2008, Goffstown Residents Association.  All Rights Reserved.



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