SIG TARP Small Business Awareness Act of 2009

I'd like to read a letter from a former Chrysler dealer in my district: ``Dear Congressman, I'd like to thank you for cosponsoring H.R. 2743, the Automobile Dealers Economic Rights Restoration Act of 2009, and H.R. 3179, the Financial Services and Government Appropriations Act for Fiscal Year 2010.

``The letter I received from you, dated August 7, 2009, was appreciated. The H.R. 3288 bill has no doubt done a great deal of good for a lot of GM and Chrysler dealers. However, the bill did not address the dealerships that lost everything and has no possible way of going back into business.

``When Chrysler informed me on May 14, 2009, that my franchise was going to be terminated effective at the close of business on June 9, 2009, I had 263 new Chrysler vehicles in inventory and $412,000 of Chrysler parts. In their letter they stated: `We intend to maintain business as usual and after rejection, we want to work with you to assist in the redistribution of new vehicles and parts to ease the burden on you.'

``They did nothing except lie to Congress. Chrysler went out of their way to make sure I could not stay in business. The week of May 18, they sent

letters to all my customers informing them that I could not be a Chrysler dealer as of June 10, 2009, and if they need service work to take their vehicles to another dealership. At the time I was terminated, my dealership was in the top 5 percent of sales; my customer satisfaction was one of the highest Chrysler had. In 2006, my parts and service managers both were awarded Chrysler Managers of the Year and I was runner-up for Dealer of the Year.

``I could not believe I was being terminated. When I tried to call and inquire as to why I was terminated, no one would answer my call. To this day, no one has explained why I lost my franchise. By the close of business on June 9, the dealership had sold all but 186 vehicles at retail and reduced the parts inventory to $352,000. When I called Chrysler about what I should do with the leftover new vehicles, I was told that they had other issues to deal with and would get back to me in a few months. They also stated that I could not retain the vehicles as new, and the vehicles would not qualify for any of the factory rebates or factory warranties.

``I was forced to sell all of the 186 vehicles to other Chrysler dealers at $3,000 to $4,000 loss per vehicle, which amounted to a loss of $700,000 of cash. When I tried to sell my Chrysler parts to other dealers, they received phone calls and were told if they need parts to call Chrysler, not Dave Croft Motors.''

Madam Speaker, this is just the first page of three that I am submitting for the Record which talks about, really, the theft of personal-property in the government bailouts of automobile companies. This is an individual family business that has existed for decades that was destroyed, abused, and left with nothing.

He ends with, ``I will keep telling my story to anyone who will listen. I hope that some kind of law will be put in place so this cannot happen to another business in the future. I still have to tell myself that I live in America and not in China.''

What he experienced was the government intervention and taking over of personal, private wealth in this country. And it's an indication of a sad direction this country has taken when it thwarts the capitalist model of raising capital, taking a risk, and either benefiting from that risk or losing everything.

When we get involved in bailing out Wall Street banks, and then we don't bail out small Main Street businesses, what we have here is a discrepancy. If we would allow the market to work, it's not compassionate. It's very, very tough, but it is the best way to turn around the economy. Otherwise, small businesses around this country will continue to get rolled over by Big Business and Big Government.

And with that, I would like to submit the entire letter for the Record.

Dave Croft,

Edwardsville, IL, April 5, 2010.

Congressman John M. Shimkus,

Regency Centre,

Collinsville, IL.

Dear Congressman: I would like to thank you for

cosponsoring H.R. 2743 ``The Automobile Dealers Economic

Rights Restoration Act of 2009'' and H.R. 3179, ``The

Financial Services and General Government Appropriations Act

for FY 2010.'' The letter I received from you dated August 7,

2009, was appreciated. The H.R. 3288 bill has no doubt done a

great deal of good for a lot of the GM and Chrysler dealers.

However, the bill did not address the dealerships that lost

everything and has no possible way of going back in business.

When Chrysler informed me on May 14th, 2009 that my

franchise was going to be terminated effective at the close

of business on June 9th, 2009, I had 263 new Chrysler

vehicles in inventory and $412,000 of Chrysler parts. In

their letter they stated ``We intend to maintain ``business

as usual'' and ``After rejection, we want to work with you to

assist in the redistribution of new vehicles and parts to

ease the burden on you''. They did nothing except lie to

Congress. Chrysler went out of their way to make sure I could

not stay in business. The week of May 18th they sent letters

to all my customers informing them that I would not be a

Chrysler dealer as of 6/10/2009 and if they need service work

to take their vehicles to Cassens & Sons in Edwardsville.

At the time I was terminated my dealership was in the top

5% of sales, my customer satisfaction was one of the highest

Chrysler had. In 2006 my Parts & Service managers both were

awarded Chrysler's managers of the year and I was runner-up

for dealer of the year. I could not believe I was being

terminated. When I tried to call to inquire as to why I was

terminated, no one would answer my call. To this day no one

has explained why I lost my franchise!!!

By the close of business on June 9th, the dealership had

sold all but 186 vehicles at retail and reduced the parts

inventory to $352,000. When I called Chrysler about what I

should do with the left over new vehicles, I was told they

had other issues to deal with and would get back to me in a

few months. They also stated that I could not retail the

vehicles as new and the vehicles would not qualify for any of

the factory rebates or factory warranty. I was forced to sell

all of the 186 vehicles to other Chrysler dealers at $3,000

to $4,000 lost per vehicle which amounted to a loss of

$700,000 dollars of cash. When I tried to sell my Chrysler

parts to other dealers, they received phone calls and were

told if they need parts to call Chrysler, not Dave Croft

Motors.

In 2006 the dealership did $47,251,683 in sales and

employed 55 families. In 2007 we had $55,894,301 in sales and

employed 53 families. Just think of the tax dollars the State

of Illinois, County of Madison and the City of Collinsville

was collecting from my dealership!

After wholesaling my new car inventory to other Chrysler

dealers and selling most of the parts for 15% on the dollar,

it was the end of July and the dealership was out of cash. I

did everything I could to keep the dealership open but

without a franchise it was impossible to pay the overhead. I

had to let most of my employees go. On January 19th, 2010 I

had to file Chapter 7 bankruptcy. I was forced, to sell the

building, which I built in 1979, to pay my creditors. My

family and I lost everything we worked for the last 34 years.

It is still hard for me to believe that this could happen

in America. I was always under the belief that my Congress

would make sure that nothing like this could ever happen to

anyone who worked as hard as my family did. I could

understand if Chrysler file bankruptcy and did not receive my

tax dollars to keep them in business, and then my government

gave 15% to Fiat who put no money into the deal--we the

people are going to lose billions of dollars on Chrysler! I

just look at Chrysler's sales! Anyone can see that the

government will have to give them more money. Crazy!!

After Congress passed the Automobile Dealers Economic

Rights Restoration Act, 400 of the 798 dealers filed for

arbitration, I being one. Chrysler reviewed the 400 who had

requested arbitration and decided that 50 of the terminated

dealers should NOT have been terminated and gave them a

letter of intent (gave them back their franchise) without

going through the arbitration process, I am one of the 50

dealers. After losing my building, all of my parts, all of my

equipment, have no cash and they tell me sorry you should not

have been terminated--give me a break, and, oh yes, Chrysler

gave all my customers to other dealers. What do I do now? I

was making a profit when my dealership was terminated and

believe I would still be a strong dealer today if Chrysler

had not terminated my franchise. This has been a nightmare

for my customers.

I know that when you cosponsored the above bill that you

had great intentions. You have to know that Chrysler will not

deal in good faith. They will make the requirements to get

reinstate so unreal that very few dealers will be able to

meet their requirements. What about dealers like myself who

cannot go back into business? It does nothing for me. At one

time NADA was trying to get compensation paid to the dealers

that lost their franchise: $3000 dollars for each unit

retailed in one of the following years, 2006, 2007 or 2008,

and purchase back all the Chrysler parts and special tools.

This would only be a fraction of what my family has lost, but

we have nothing now. Starting over at the age of 65 will be

very hard and I will have a hard time putting any trust in

the laws of our country.

I will keep telling my story to anyone who will listen. I

hope that some kind of law will be put in place so this

cannot happen to another business in the future. I still have

to tell myself that I live in America and not in China.

Dave Croft.

I yield myself as much time as I may consume.

Mr. Speaker, I first want to thank Mr. Moore, the leader of the subcommittee, for his leadership on this issue as well and on the subcommittee in general.

The legislation before us requires that the Special Inspector General report to Congress on how smaller financial institutions are faring under the TARP program and whether they are gaining access to needed funding. It would also require the Special Inspector General to examine the impact of TARP funding on small businesses.

During the August recess, I met with community bankers throughout my district. They outlined their desire to increase their lending to local small businesses that have been frozen out by the credit crunch. Similarly, I met with dozens of small business owners who expressed concerns over access to credit and to capital, key components of their ability to create jobs.

This problem was echoed in a recent article in the Minneapolis Star Tribune. The article outlined the problems that smaller financial institutions are having in trying to obtain TARP funds. They were primarily local banks that wanted to obtain TARP funds, but they had not received them or had not been given permission to receive them.

Mr. Speaker, in hearings held by the Financial Services Committee, we heard concerns that the large institutions may not be increasing their lending and that it was going to be the smaller institutions that would ultimately help revitalize our economy. The problem is the small businesses are not receiving the funds they need to help maintain and to grow their businesses. The reason is simply that those funds are not available.

When I asked about the assistance the community bankers, in particular, are getting from TARP, the representatives from the community banks responded by saying, All community banks have lost the trust of the Federal Government's ability to negotiate with them.

Now, Mr. Speaker, that concerns me especially if we are looking to get out of the financial and economic mess that we are facing. Community banks make the bulk of their loans to small businesses, and it's the small businesses that have created two of every three net new jobs in the United States since the early 1970s. We need to expand lending so we can create jobs and can grow our economy. The government's ``too big to fail'' approach, which has been the guiding principle for a long time in Washington, also implies ``too small to save.''

This premise is shortsighted; it's inaccurate and it's unfair to smaller institutions and to small businesses. By requiring the Special Inspector General to also examine now and to report the impact on smaller financial institutions as well as on small businesses, this will result in recommendations to both the U.S. Treasury and to Congress on how to improve the TARP program

so we can focus on job growth. Above all else, job growth needs to be our number one priority for each of us in Congress.

I ask for support, and I urge passage of H.R. 3179.

I reserve the balance of my time.

Mr. Speaker, just to follow up again, I want to thank Mr. Moore for his leadership on the subcommittee.

I want everyone to know that, with the country's current financial state, now more than ever we do need to help our Nation's job creators and small businesses.

With that, I would urge passage of H.R. 3179.

I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3179), to amend the Emergency Economic Stabilization Act of 2008 to require the Special Inspector

General for the Troubled Asset Relief Program to include the effect of the Troubled Asset Relief Program on small businesses in the oversight, audits, and reports provided by the Special Inspector General, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

I yield myself as much time as I may consume.

Mr. Speaker, I rise today in support of H.R. 3179, the SIG TARP Small Business Awareness Act of 2009, drafted by my colleague from Minnesota, Congressman Erik Paulsen. I commend his work on this important legislation.

This bill was originally offered as an amendment by Congressman Paulsen to S. 383, the Special Inspector General for the Troubled Asset Relief Program Act, that was approved by the House on April 25, 2009, by a vote of 423-0, and was later signed into law.

During the markup, I commended Congressman Paulsen for offering his amendment, and I supported the substance of the amendment; but to get S. 383 quickly to the President's desk to equip the SIG TARP with the resources and with the authority he desperately needed, we did not add the amendment to the bill. I am glad Congressman Paulsen has offered this proposal again as a standalone bill so that the SIG TARP can closely monitor how TARP has affected small businesses and can report back to Congress.

I urge my colleagues to support H.R. 3179.

I reserve the balance of my time.

Mr. Speaker, I wanted to also raise a point that Congressman Watt had raised in the committee markup in which Congressman Paulsen's proposal was debated.

Congressman Watt offered an amendment that was accepted by voice vote to make sure that, in addition to small businesses, the SIG TARP should review how TARP has affected minority- and women-owned businesses. This is a good idea, and we should make sure TARP is being administered fairly and equally across the board.

I appreciate Congressman Paulsen for working on a bipartisan basis to address this concern and for revising his bill to include it.

I reserve the balance of my time.

Mr. Speaker, I urge my colleagues to support H.R. 3179, and I yield back the balance of my time.