In the latest television ad in the 11th Congressional District race, Democratic Rep. Jerry McNerney is hitting GOP opponent David Harmer on the challenger’s occupation as a former lawyer in the banking industry.
The Democrat hopes to paint Harmer as shady lawyer who engaged in unscrupulous predatory lending practices and benefited from federal bailout program that the Republican now opposes.
While many may view a lawyer who worked for a credit card company as unworthy of admiration or a vote, McNerney’s claims fall considerably short of the truth. Here’s fact-check.
What it says: “The file on David Harmer isn’t pretty.
A corporate lawyer for a credit card company fined millions
Even deceiving seniors. An executive for predatory lenders.”
Is it true? Yes, Harmer’s employer engaged in nefarious practices for which it paid fines but Harmer had nothing to do with them. Harmer did not join Providian until September 2001, a year after the company paid a $305 million fine related to charges that it tricked customers into buying products they did not want. For example, Providian approved credit cards for poor people and subsequently imposed fees and limits that trapped them into debts they could never repay.
Harmer says he was part of the clean-up team hired to whip the company into shape. “It was unconscionable what (prior Providian managers) did,” Harmer said. “The entire top management tier was fired and replaced. But I was part of the solution.”
Undeniably, media and regulatory investigations into the entire credit card industry in recent years has revealed a number of predatory practices such as excessive interest rates and a failure to disclose to customers that making minimum payments would never allow retirement of the debt.
But blaming Harmer for an entire industry’s failings is at least as questionable as blaming McNerney for every one of Congress’ shortcomings.
What it says: “… Harmer’s bank got billions from the Wall Street bank bail out.”
Is it true? Yes, JPMorgan Chase received federal bailout money but there is no evidence that Harmer benefited from it.
Providian was sold to Washington Mutual, where Harmer continued to work as a vice president and associate lawyer in its credit card division. When Washington Mutual’s home lending division bankrupted the company, federal regulators orchestrated a purchase by JPMorgan Chase in September 2008, Within a few months, JPMorgan closed down the credit card division and Harmer was laid off in January 2009. He was paid $485,779 between Jan. 1, 2008, and April 30, 2009, in salary, severance and bonuses.
JPMorgan received received $25 billion from the federal Troubled Asset Relief Program roughly two weeks after the FDIC conducted the sale of Washington Mutual. But there is no evidence that JPMorgan Chase, which had just bought Bear Stearns, needed or used the TARP funds to buy Washington Mutual or pay the salaries or severance packages of Harmer and the other employees the new owner sent packing.
JPMorgan Chase repaid the TARP money with interest as soon as federal authorities allowed it.
Here is the ad:
