Image: Kirsten Hartsoch

So much for states’ rights: Iowa-based American Future Fund wants the Federal Elections Commission to rule against Minnesota’s long-standing ban on robocalls in order to include Minnesota in its national robocall campaigns, the Star Tribune reports. The group, which bills itself as a “conservative and free market” operation, filed a complaint with the FEC arguing that Minnesota’s anti-robocall law did not apply to national campaigns.

AFF, which has close ties to the Swift Boat Veteran for Truth, got its start in 2008 doing advertising for former Sen. Norm Coleman’s reelection campaign and has gone after DFL Rep. Collin Peterson on health care reform.

If AFF succeeds in convincing the FEC that federal law trumps Minnesota’s, the group’s automated phone messages would be the first legal political ones in Minnesota since 1987.

But Attorney General Lori Swanson says her office will fight to keep robocalls illegal. “We do not believe Minnesota … is preempted by federal campaign finance law and expect to be submitting a letter to the FEC on Monday expressing our position,” attorney general spokesman Ben Wogsland told the Star Tribune.

Photo: iStockphoto

A watchdog group, Stimulating Broadband (SB), which keeps tabs on stimulus spending on broadband infrastructure, says Minnesota is the only state holding back details about how the state plans to spend its broadband stimulus money. Gov. Tim Pawlenty’s administration says it doesn’t have to disclose the information. It’s the second time in two months that Pawlenty has come under criticism over broadband policy. Minnesota submitted a list of funding priorities to the National Telecommunications and Information Administration (NTIA) detailing how the state plans to spend stimulus money to expand broadband coverage statewide. But Pawlenty’s office won’t reveal which projects — which it selected from a master list of applications received from counties, townships, cities, businesses and nonprofits across Minnesota — it’s recommending for funding.

The governor is invoking a state statute that says applications about nonpublic businesses are private until funding decisions are made. As the Minnesota Progressive Project noted on Tuesday, many of those applications have been made public, including one of the state’s largest counties, Ramsey County.

Diane Wells of the Telecommunications Division of the Minnesota Department of Commerce, told SB:

“Minnesota has undertaken its [Broadband Technologies Opportunity Program] evaluation process following guidelines the state has for reviewing RFPs. Under that process, the results of our evaluation would not be made publicly available until the completion of the full process, which for purposes of the BTOP broadband grants, we have defined as when the NTIA issues the awards. Thus the recommendation from Minnesota to the NTIA is not a public document at this time.”

The second time SB asked for Minnesota’s prioritized list, it received a response from a government attorney. In an email, Alberto Quintela, Jr., wrote, “The Minnesota Department of Commerce has been informed by the Minnesota Department of Administration that, pursuant to Minn. Stat. 13.591, subd.4 (2008), documents generated in response to the NTIA’s communication to the states on the opportunity to comment on grant proposals submitted under the Broadband Technology Opportunities Program (BTOP) are protected nonpublic data until completion of the federal evaluation process and the awards are made.”

When asked for comment on the case, Jeneba Jalloh Ghatt of the Ghatt Law Group told SB in an email that it is strange for Minnesota to be so secretive — especially since every other state SB has approached has supplied the information.

“At the outset, the state of Minnesota has to realize that others have elected to release their rankings. Given that it was never a secret and was quite ‘public’ that NTIA sought the rankings from all of the states in the first place, it is unclear why the ultimate rankings would be considered ‘non public.’”

“It is also unclear whether Minnesota can keep the letter hidden for long,” Ghatt wrote. “At top, the decision to treat the NTIA response as non-public fuels a growing debate over whether States preferred public and government projects over private ones. It would appear that Minnesota could be shielding its rankings from the same type of criticisms other states are facing.”

That criticism comes as Minnesota selected a telecom-backed group to conduct the state’s broadband mapping, which could, in turn, benefit the telecom industry. That decision was made without the input of the state’s citizen broadband task force, whose members were appointed by Pawlenty.

Photo: wikipedia

To the victor go the spoils, the saying goes. And so on Tuesday Minneapolis Mayor R.T. Rybak took delivery of 10 pounds of hamburger from Jim Schmitt, mayor of Green Bay, Wisc., in fulfillment of the friendly wager they made on the Vikings-Packers football game. But the Vikings’ win wasn’t the only news since the mayors made their bet. On the day between the bet and the game, the New York Times published an expose on the serious health hazards of hamburger meat, focusing on a Minnesota victim and corporation and a processor in Wisconsin.

The Times article probed the source of hamburger meat that sickened Stephanie Smith of Cold Spring, Minn., in 2007, sending her into a medically-induced coma and eventual paralysis from which she is still trying to recover.

The meat was produced by the Minnesota-based Cargill, under its “American Chef” label. It was processed from sources around the country and hemisphere at Cargill’s plant in Butler, Wis.

Rybak’s reward for the Vikings’ 30-23 victory at Mall of America Field at the Hubert H. Humphrey Metrodome: “10 lbs. of All-American Hamburgers, Seroogy’s Chocolate, and Wisconsin-made cheese,” according to his office.

The Times article didn’t mention “All-American Hamburgers” and there is no reason to suspect that Green Bay’s gift is any different from any other hamburger — besides, as its name suggests, being made from exclusively domestic sources.

“I want to thank Mayor Schmitt for giving us a taste of Wisconsin in addition to the delicious taste of victory we’re still savoring,” Rybak said in a statement, adding that the hamburger and other booty would be donated to Sharing and Caring Hands, a local charity that serves needy individuals and families.

Processed meat also hung in the balance with a separate wager between the states’ governors: Wisconsin sausage versus Minnesota pork.

“The Road to TCF Bank Stadium” is being shown on the Big Ten Network cable TV channel and at the U of M website (or below).

It’s 22 minutes long but apparently fills a half hour on TV, with breaks between seven sections carrying titles like “Game Day Experience” and “Teamwork.”

You can glimpse the band form the “TCF” logo in a small box during the ending credits, but it’s easier to see in a separate short showing the entire Sept. 12 opening game against Air Force in only two minutes, using time-lapse videography.

Dusk has fallen, the field lights are on, and the band comes out to form a giant “M” for Minnesota at the 1:40 mark. The students in the marching band then transform their “M” into the letters “TCF” as they appear in the bank’s ads and signs.

Update: Tim Diem, director of the university’s marching band, tells the Minnesota Independent the band was simply displaying the name of the stadium. “If they’d named it Veterans Stadium, we would have spelled out ‘Veterans,’” Diem says. He disputes that the band had formed a corporate logo: “It’s the name of the building.” The home opener at TCF Bank Stadium was the second time the band did the “TCF” formation, according to Diem. They also did it last year at the Metrodome, when like last month, he says, “We were putting on a celebration.”

The longer video has a variety of people saying nice things about the university, the stadium, and the process that got TCF Bank Stadium built. Says Dave Mona of the Gopher Radio Broadcast Team:

I was afraid I’d see a ton of advertising. You’re not going to see — This is not a NASCAR. This is a college football stadium. I think people will be pleasantly surprised. Even though there’s a lot of corporate money in here, it’s very subtle.

But those “subtle” ads and logos that do make it into the stadium reach young adults in the midst of an important rite of passage, on the cusp of becoming full-fledged consumers. As U of M child-development Prof. Rich Weinberg sees it from his bleacher seat:

It’s been almost 28 years, I believe, since we’ve had a generation of students that have had the opportunity to experience this. And I really feel strongly that it’s not just by being in the classroom that’s important, but the whole socialization as a young adult really includes this experience.

Of course, even U of M classrooms carry corporate logos these days.

In the video, you’ll watch in vain for any explanation of TCF Bank’s $35 million naming-rights deal beyond a listing for the bank under the heading “Significant Corporate Sponsors & Donors.” That blurs a line that’s distinct in the lengthy contract between the university and the bank: TCF is paying for advertising.

Yet TCF Bank Chairman Bill Cooper seems to like that line blurred. Here’s what he told Mona and Star Tribune sports columnist Sid Hartman on their “Sports Huddle” show on WCCO-AM last Sunday:

It’s kind of half charity and half business. We’ve seen a lot of business out of it.

Here’s “The Road to TCF Bank Stadium”:

Photo: iStockphoto

As Minnesota develops a plan to increase high-speed broadband to rural areas, advocates complain that the organization chosen to map the state’s broadband access — and the process Gov. Tim Pawlenty’s administration used to make the selection — lack sufficient transparency.

Commissioners of the Minnesota Departments of Commerce and Employment and Economic Development have recommended Connected Nation as the state’s vendor for broadband mapping. The commissioners arrived at their decision in July, but without seeking the input of the Ultra High Speed Broadband Task Force, whose members Pawlenty appointed.

“The Governor signed off and [Connected Nation] is off to the races,” wrote task force member Mike O’Connor. “I’m pretty cranky about this process. Nice n’ cozy. Nice n’ closed. Nice bypass of the Task Force. No public input at all as far as I can see,” he said.

The recommendation puts Connected Nation in the running for an upcoming grant through the American Recovery and Reinvestment Act, between $1.9 and 3.8 million, to identify and map holes in the state’s broadband network. That money will be followed by $7 billion in further grants that states can use to extend broadband service planning to areas outside the existing network.

Connected Nation is a nonprofit whose ties to the telecommunications industry have prompted protests from broadband-access advocates. As the Wall Street Journal noted in June, the group “is backed by big telecommunications companies like Comcast Corp., Verizon Communications Inc. and AT&T Inc. that potentially stand to benefit from how the Obama administration doles out that $7 billion in stimulus money for broadband improvements.”

As the financial paper notes, critics “worry Connected Nation will use the maps to steer stimulus funds toward its big corporate sponsors, at the expense of smaller players or poorly served areas.”

Connected Nation’s board of directors is filled with industry executives and lobbyists from AT&T, Inc.; CTIA – The Wireless Association; the United States Telecom Association; the National Cable & Telecommunications Association; the Telecommunications Industry Association; Verizon Communications; and the Comcast Corporation. Several more members hail from nonprofits that have benefited financially from AT&T and Verizon.

The state acknowledges and actively supports the telecoms in its decision to go with Connected Nation. In a letter to Pawlenty (pdf), the commissioners said it was the telecoms that influenced their decision. “[The] primary reason that we are recommending Connected Nation is that in conversations with and letters from the broadband provider community (including the Minnesota Telecom Association, the Minnesota Cable Communications Association, Qwest and Comcast), they have noted their satisfaction with the work Connected Nation has done. Most important, the providers have confidence in Connected Nation’s ability to protect their sensitive, nonpublic infrastructure information.”

Pawlenty’s commissioners said the telecoms didn’t trust the other applicant, the University of Minnesota, in terms of confidentiality agreements. When Connected Nation partners with states to work with the large broadband providers, the biggest issue — and one Minnesota officials acknowledge — is that the providers want as much information as possible kept confidential. And if that information isn’t kept confidential, the providers will refuse to cooperate.

“While we understand the importance of the University of Minnesota,” the commissioners wrote, “there is some uncertainty regarding their proposal. First, the University indicates that it has entered into confidentiality agreements on other projects. However, in speaking to the provider community, it is unclear whether they would be able to reach agreement with the University on nondisclosure agreements (NDAs) in order to turn their infrastructure data over to the University.”

The decision has broadband task force member O’Connor worried. “Looks like there was lots of opportunity for providers to provide input about their confidentiality needs, not too much input about what consumers need,” he wrote. “Look forward to more sub-par optimistic maps, and impossible to use/verify data…”

He’s been cynical about Connected Nation throughout the process. On his Urban Broadband Users of Minnesota blog, a place he chronicles the inner workings of the task force and broadband implementation, O’Connor wrote that Connected Nation is “complicated.”

“They, and their corporate backers, are playing a complex game to a) garner a big piece of stimulus mapping money and b) shape the dialog about broadband availability and rollout. They’re darn slick,” he said. “My posture is to watch them carefully and be very thorough when evaluating their results. I think that there are real issues of transparency, mapping-methods and control.”

He’s not the only broadband expert in Minnesota who takes issue with Connected Nation. Peter Fleck of the Digital Inclusion Fund Committee with the City of Minneapolis spoke before the task force last week.

“My understanding is that we have allowed the companies that have not provided the needed broadband coverage in our state to steer the broadband mapping process itself because of a stated need for confidentiality. That need is questionable,” said Fleck.

“And it puts the state in a position where if the maps show there is no problem with broadband coverage, then we won’t need legislation, regulation, or any other policies and it creates the risk that the telecom industry can continue to provide inadequate coverage to underserved areas — usually areas of low-density and low-income. And because of the inadequacy of these maps, eventually we will have to undertake broadband mapping again at taxpayer expense. To me, this is an irresponsible use of public money.”

Gov. Tim Pawlenty

Christopher Mitchell of the Telecommunications as Commons Initiative of the Institute for Local Self-Reliance, an organization working to encourage community-owned broadband networks, was much more blunt. “Perhaps we could next ask the Minnesota Vikings to create a nonprofit to study whether a new football stadium is a good idea or not,” he wrote.

Pawlenty’s spokesman, Brian McClung, said the governor’s office has directed the Commerce Department to handle the state’s recommendation to the National Telecommunications and Information Administration (NTIA), the federal agency implementing the stimulus funds.

Patrick Sexton, legislative affairs director for the Department of Commerce, said the state has submitted Connected Nation’s name and that the stimulus awards will be announced shortly. “Minnesota has formally recommended to the NTIA that Connected Nation do broadband mapping here,” he said. “No stimulus funds have been used because the NTIA has not actually awarded any applicants a contract. That should occur in the next few weeks.”

He said that the decision not to consult the task force was based on a difference of missions.

“The task force was initiated to develop a plan to achieve ultra high-speed broadband, which they are hard at work on completing,” he said. “The question of who would do the mapping is a separate question and not part of the mission so I’m not sure why anyone would be upset.”

Brian Mefford, CEO of Connected Nation, responded to critics concerns on the group’s website. He says the company will begin third-party verification of the datasets that the telecoms demand stay private. “In order to provide even more assurance of our maps’ accuracy, Connected Nation will soon be announcing a process for third-party validation of our mapping efforts,” he said.

Photo: Paul Demko, Minnesota Independent

Are housing foreclosures in Minnesota on the increase in 2009? According to RealtyTrac’s latest assessment of the housing meltdown, the answer is an unequivocal yes: foreclosure filings are up an eye-popping 71 percent over last year in Minnesota. Through August, more than 25,000 properties have been involved in foreclosure proceedings.

But the Hennepin County Sheriff’s Department has an equally stark statistic to prop up the case that foreclosures are actually on the wane in the state. The number of foreclosures that the law-enforcement agency has processed is down by 30 percent so far this year. In 2008 the sheriff’s department had auctioned off 5,198 foreclosed homes through August. By contrast, through the first eight months of this year it had auctioned off just 3,669 homes.

And Hennepin County is not alone. According to statistics maintained by HousingLink and the University of Minnesota’s Center for Urban and Regional Affairs, in 2009 there were 11,089 foreclosure sales through June, the latest period for which statistics are available. That’s down from 13,795 such sales in the first six months of 2008 — a decrease of 20 percent.

So what accounts for the radical difference in the assessments? Is one set of numbers bunk?

Not necessarily. For starters, it’s a difference in methodology. The system employed by the Minnesota housing groups is quite simple (if labor intensive): each month they call the sheriff’s departments in all 87 counties and find out how many foreclosure sales were processed.

“There’s no quibbling with that number,” says Dan Hylton, HousingLink’s research manager. “It is what it is.”

But RealtyTrac uses a more complex (and probably less precise) methodology to determine how many foreclosures are occurring across the country. It tabulates five different indicators of foreclosure and then adds them all together to come up with a grand tally.

“The data provided in the report counts the total new filings, consisting of Notices of Default, Lis Pendens, Notices of Trustees’ Sales, Notices of Foreclosure Sale and Real Estate Owned for the period requested on either a monthly, quarterly or annual basis,” reads a statement on the group’s web site explaining its methodology.

Since many homes go through several of these steps on the road to foreclosure, it’s highly likely that RealtyTrac is double-, or even triple-counting some properties. However, that still doesn’t explain the huge difference in statistics purporting to track the same trend.

At least part of the disparity can likely be traced to a difference in time frame. The statistics compiled by the Minnesota housing groups only run through June, while RealtyTrac’s study measures foreclosure filings through August. There was a lull in foreclosures earlier this year owing to moratoriums imposed by some of the country’s largest lenders.

But most housing experts expect a second wave of foreclosures during the second half of the year. While the initial housing crisis was largely due to irresponsible borrowing and dodgy mortgages, this next wave will be primarily homeowners unable to keep up with payments owing to the dismal economy. RealtyTrac’s numbers are likely more fully capturing the start of that next crest.

“The consensus among housing experts is that we’re in a lull between waves and that this next wave is going to be more economically driven,” says Hylton.

Photo: MnIndy

A national movement called 10 Percent is Enough is taking to the streets in protest of “usury,” the practice of overcharging borrowers that’s prohibited in the Bible, the Qu’ran and the Torah. Protests in five U.S. cities late last month called on banks to reduce credit interest to ten percent — a figure the group says “puts proportion and equity into the relationship between the lender and the borrower.” While the movement of faith-based and anti-poverty groups hasn’t yet had a Minnesota presence, the dismantling of national usury laws — not mention hope for restoring one — has Minnesota roots.

Usury laws have been around for centuries, opposed by Plato and Plutarch and prohibited in some form in holy books including the Old Testament and the Qu’ran, not to mention by American law — up until three decades ago. In 1978, the Supreme Court of the United States ruled unanimously on the case, Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp., which essentially resulted in the exemption of national banks from state-based usury laws, allowing lenders to sidestep credit caps when dealing with out-of-state customers. That means banks that operate nationally are governed by the Banking Act of 1864, which predated the credit-card industry and has no interest rate cap.

As Chicago labor lawyer Thomas Geoghegan explained it,

[T]his sealed what had been a trend throughout the country, which is lifting these interest rate caps for banks and giving consumers easy credit on the premise that they would just pay tons and tons of interest so that the banks were protected if the loan weren’t repaid. In fact, the banks had incentive to hand out credit cards and hope that the loans would not be repaid, because the interest rates on these credit cards were so high.

You know, if you are Mr. Potter in It’s a Wonderful Life and can only get six percent, seven percent on your loan, you want the loan to be repaid. Moral character is important. You want to scrutinize everybody very carefully. But if you’re able to charge 30 percent or, in a payday lender case, 200 or 300 percent, you don’t care so much if the loan—in fact, you actually want the loan not to be repaid. You want people to go into debt. You want to accumulate this interest. And this addicted the financial sector to very, very, very high rates of return compared to what investors were used to getting in the real economy, the manufacturing sector, General Motors, which would give piddling five, six, seven percent returns.

A bill was introduced in the U.S. House of Representatives this spring that aims to “amend the Truth in Lending Act to establish a national usury rate for consumer credit transactions, and for other purposes,” and two weeks ago, U.S. Rep. Keith Ellison became one of its 16 cosponsors. H.R. 1608, the Protecting Consumers from Unreasonable Credit Rates Act of 2009, would create a national interest-rate limit on credit cards, payday loans and tax-refund-anticipation loans (its Senate companion is S. 500).  The bill has been referred to the House Committee on Financial Services and appears to be going nowhere. While it moves to offer consumers protection, it sets that rate cap far beyond what 10 Percent is Enough seeks — at 36 percent.

Watch 10 Percent is Enough’s video:

(WDCpix)

Minnesota’s congressional delegation spent a lot of time discussing health care this week, but there were other issues to deal with. Railroads, grasslands, student loans and peace in the Middle East all garnered attention from Minnesota’s members of Congress.

Rep. Tim Walz is working to secure $260 million in the federal Transportation Re-authorization Bill to route the Dakota, Minnesota & Eastern Railroad south of Rochester. One concern is DM&E’s proximity to the Mayo Clinic and the potentially hazardous materials the line brings close to the hospital complex. The line would also help connect passenger rail to the proposed Minneapolis-to-Chicago high-speed rail.

“We think this project … borders on a project of national interest, of national priority,” Walz said.

Rep. John Kline railed against a plan to to abolish the Federal Family Education Loan Program and end subsidies for private student loan lenders by folding the program into the federal government.

“I have to ask: Is there any industry not on the verge of federalization?” said Kline who is the ranking Republican on the House Education and Labor Committee.

“We’ve already seen the federal government step in and take control of banks, insurance companies and even iconic American auto companies,” Kline said. “The speed with which Democrats are orchestrating a full government takeover of our classrooms and communities is astonishing,” he added.

Rep. Betty McCollum announced on Tuesday that she had secured $400,000 for energy efficiency upgrades for the city of Oakdale. The city will install a cost-saving geothermal heat pump system and light-emitting diode lamps.

McCollum also announced a $900,000 grant on Thursday for Twin Cities middle schools called “Generator Go Green” that will boost energy efficiency, student volunteerism and science learning at disadvantaged schools.

Rep. Keith Ellison is trying to secure $750,000 for a light-rail hub in Minneapolis’ Warehouse District and a light-rail line or rapid bus transit line through north Minneapolis to the northwest suburbs called the Bottineau Transitway.

Ellison also introduced a corporate governance bill that directs publicly held companies to set up independent oversight boards for risk management and executive compensation.

“Runaway executive pay and weak corporate boards were two key ingredients in the current financial crisis,” Ellison said in a statement on Wednesday. “Ensuring that investors have a voice on executive pay packages and that boards are independent, strong and qualified is critical to restoring confidence in the way our companies are run.”

Rep. Michele Bachmann is holding a press conference on health care on Friday with other Republican congresswomen.

“The press conference will also be attended by working mothers who will share personal stories about how the Democrats’ health care legislation will hurt women and affect their day-to-day lives,” the group said in a statement Thursday.

Rep. Collin Peterson is working to ban certain kinds of credit default swaps, specifically those that contributed to the worst economic downturn since the Great Depression, but large corporations are balking at the idea.

Peterson is urging the Department of Agriculture to change incentives that allow farmers to tear up grasslands to increase yields, a problem he says is exacerbated by the federal government.

Peterson also defended his work on climate change legislation, specifically cap-and-trade for which he has begun to take heat in his district.

“I decided to get involved and work with my colleagues in Congress to be sure that agriculture and rural America had a seat at the table when this climate change legislation was written. As a result, we were able to amend several important provisions that made the bill a better deal for agriculture and rural America.

Rep. James Oberstar got pressure from the online poker players’ lobby to vote to make online poker legal and regulated.

Oberstar was praised this week for his advocacy of bicycling and bike trails. “You get on a bike and you can go anywhere,” Oberstar told the Hill.

Oberstar’s advocacy for transportation, especially sustainable transportation, was praised by Transportation for America, a smart growth transportation lobby.

Sen. Amy Klobuchar introduced Miguel Humberto Diaz at his nomination hearings for U.S. ambassador to the Vatican on Wednesday. She called the St. John’s University/College of St. Benedict theology professor “a gifted theologian, a respected scholar, a natural teacher and a dedicated bridge-builder. He knows and loves America, and he knows and loves the Catholic Church.”

Klobuchar held a hearing on metal on Wednesday at the Senate Judiciary Committee’s Subcommittee on Crime and Drugs.

“Metal theft has become a serious nationwide problem with potentially dangerous and far-reaching consequences because of the threat it poses to public safety and our critical infrastructures,” she said in a statement. “We need a nationwide metal theft prevention strategy, so we can combat, prosecute and prevent metal theft crimes.”

Sen. Al Franken’s office is holding open meetings around the state.

Franken also met with Jewish leaders and fellow senators on Wednesday to discuss peace in the Middle East.

(iStockPhoto)

A report released this week by the Federal Bureau of Investigation found that Minnesota ranked in the top fifteen states for mortgage fraud claims in 2008 and in the top ten on a couple of measure. Specifically, data from the Financial Crimes Enforcement Network found Minneapolis FBI field offices ranked 9th in the number of Suspicious Activity Reports (SARs) related to mortgage fraud. And data from Fannie Mae’s reviews of mortgage loan “misrepresentations” put Minnesota at 7th in total fraud cases out of the 50 states.

A combination of aggregate data from eight different mortgage fraud tracking organizations put Minnesota at 13th overall for mortgage fraud. The top 15 states were California, Florida, Georgia, Illinois, Michigan, Arizona, Texas, Maryland, Missouri, New Jersey, New York, Ohio, Colorado, Nevada, Minnesota, Rhode Island, the District of Columbia and Massachusetts.

The FBI report said that fraud cases increased in 2008 as mortgage lenders tried to maintain their “high standard of living” following the disastrous collapse of housing bubble.

Mortgage fraud trends in 2008 reflected the overall downturn in the US economy … the mortgage loan industry reported a spike in foreclosures and defaults; and financial markets continued to contract, diminishing credit to financial institutions, businesses, and homeowners. These combined factors uncovered and fueled a rampant mortgage fraud climate fraught with opportunistic participants desperate to maintain or increase their current standard of living. Industry employees sought to maintain the high standard of living they enjoyed during the boom years of the real estate market and overextended mortgage holders were often desperate to reduce or eliminate their bloated mortgage payments.

“The banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill,” Durbin told a Chicago radio station. “They frankly own the place.”

To what extent Durbin is correct will be on display this week when the Senate takes up legislation reining in the unfair and deceptive practices commonly used by credit card companies. The proposal, sponsored by Senate Banking Committee Chairman Chris Dodd (D-Conn.), would prohibit rate hikes on existing balances, give cardholders longer notice to pay their bills, and prevent card companies from charging fees when customers pay their bills on time. The bill, which has the strong backing of President Obama, has a good chance of passing, but not before the consumer protections are diluted to the satisfaction of at least some moderate senators on both sides of the aisle — lawmakers whose support Dodd will need to overcome a Republican filibuster.

A similar credit card reform proposal, sponsored by Rep. Carolyn Maloney (D-N.Y.), passed the House easily last week, but the Senate bill goes even further to protect card users from unexplained fees and surprise rate hikes. The question now on the minds of many anxious consumer and lending advocates is this: How strong can Senate Democrats keep those consumer protections and still have the bill pass the upper chamber?

Standing in their way will be the powerful finance industry, which opposes both chambers’ bills and maintains tremendous influence over Capitol Hill lawmakers. Indeed, the Dodd proposal barely squeaked out of the Senate Banking Committee in March, with Democratic Sen. Tim Johnson of bank-friendly South Dakota joining every Republican in siding with the industry to oppose to the bill.

Edward L. Yingling, president and CEO of the American Bankers Association, said last week that the congressional proposals raise “serious concerns” for the group.

“The ABA strongly believes that any additional legislative efforts should strive to achieve the right balance between enhancing consumer protection and ensuring that credit remains available to consumers and small businesses at a reasonable cost,” Yingling said in a statement following passage of the House bill. “We continue to believe that more work needs to be done to achieve that balance.”

Complicating the Democrats’ efforts, Washington policymakers have gone to great lengths — and spent billions of taxpayer dollars — to stabilize the finance industry in recent months. Many of the reform proposals governing the banks — even if they’re done to protect consumers — would likely threaten banks’ profits at the same time Congress is asking them to increase their lending — a dynamic that’s fueled opposition to the credit card reforms and other related proposals.

Then there’s the issue of political contributions. In the 2008 election cycle, the finance industry — including the insurance and real estate sectors — gave more than $463 million to congressional lawmakers, according to the Center for Responsive Politics — more than the contributions from the health care, transportation, agriculture, electronics and defense sectors combined.

“That’s why Congress still listens to these people who created this mess to begin with,” said Kathleen Day, spokeswoman for the Center for Responsible Lending, an advocacy group. “Money.”

As further evidence of the industry’s sway, the banks chalked up an enormous legislative victory last week when the Senate killed the proposal empowering bankruptcy judges to reduce, or “cramdown,” the terms of primary mortgages to prevent foreclosure. The vote was clear indication that, despite the economic difficulties faced by Wall Street — not to mention the series of bailouts propping it up — the finance industry still gets much of what it wants on Capitol Hill.

The issue of credit cards, however, might prove to be an exception. Obama has gone to great lengths to push for new consumer protections this year, calling executives from the nation’s largest card issuers to the White House last month to clarify his support for the congressional reform efforts. That display contrasts sharply with the administration’s stand on the mortgage bankruptcy bill. While Obama supports cramdown as an element of the administration’s foreclosure-prevention efforts, he also didn’t go out of his way to twist lawmakers’ arms to pass the measure. The final vote was evidence of that tepid support: The cramdown proposal fell a whopping 15 votes shy of defeating a Senate filibuster. Twelve Democrats joined every Republican to kill the bill.

There are murmmerings on and off Capitol Hill that Democrats viewed credit card reform as the more certain victory politically, and therefore have put more weight behind it than they did behind cramdown. There was also a fear that homeowners who took advantage of bankruptcy to save their homes would, in the process, also wipe away any outstanding credit card debts — a potential double blow to the banks that stoked opposition to the proposal.

“The administration is really making a concerted effort [on credit card reform],” said Graham Steele, an attorney with Public Citizen’s Congress Watch. “Cramdown was a much tougher ask to begin with. Everyone’s got credit cards and [the companies] are preying on even the responsible borrowers now. No one has any sympathy for that.”

For consumers, there’s a great deal hinging on what credit card reform provisions the Senate can pass. The Maloney bill in the House, for example, allows card companies to hike rates on existing balances when the borrower is more than 30 days late on a payment. The Dodd bill, by contrast, prevents retroactive rate increases in all cases. An analysis conducted by The National Consumer Law Center found that roughly 10 million Americans would still be vulnerable to those retroactive hikes if Maloney’s version of the provision were adopted instead of Dodd’s.

“Families who are over 30 days late are often the very ones in the most financial trouble due to this dire economy,” Chi Chi Wu, NCLC Staff Attorney, said in a statement. “Doubling the interest rate on purchases they may have made years ago when the rate was lower only shoves these distressed families deeper in the hole and makes it impossible to climb out.”

Dodd has been working with Sen. Richard Shelby (R-Ala.), the senior Republican on the Banking Committee, in an attempt to forge a compromise, with the Senate expected to take up the bill as early as Wednesday. Neither Dodd’s nor Shelby’s office responded to requests for comment last week.

Despite the powers aligned against them, consumer advocates remain optimistic that a strong credit card bill is possible from the Senate. Lauren Saunders, managing attorney at the National Consumer Law Center, expects that the bill would retain the most significant consumer protections, including the total ban on retroactive rate hikes and age-limit requirements that would prevent card companies from targeting college students.

“There will be some compromises,” Saunders predicted, “but it won’t be gutted.”

Mike Lillis is Congress reporter for the Washington Independent.