Lawmakers miss the point of Assembly Bill 228

Lawmakers considering Assembly Bill 228 were so intent this week on shielding consumers from the uncomfortable realities of the credit market, they were blind to a technology that’s helping people rebuild their credit histories.

For almost a decade, Nevadans have willingly entered into auto loan agreements requiring them to install an on-board device that remotely disables the car if they fail to pay. Ultimately, if lender and borrower reach no resolution, the car can be located via GPS and repossessed. AB 228 was brought by the Payment Assurance Technology Association, which says it wants to incorporate the industry’s best practices into the law. PATA represents several manufacturers of the starter interrupt devices, and lenders who use them.

The devices have proven useful even before the repo man gets involved. Lenders say the delinquency rate on car loans drops to 5 percent among borrowers who get an electronic signal reminding them to pay after a ten-day lapse. The rate is 27 percent among the same class of borrowers without the devices, according to the PATA. Repossessions drop from 15 percent to 4 percent with a starter interrupt device.

Is this the most desirable credit arrangement? Only if you’re cool relinquishing some of your privacy and paying interest rates that push 30 percent. But for many subprime borrowers, it’s the only way to get a car.

Even a privacy hawk recognizes “intelligent tradeoffs,” a phrase used recently by legal scholar Richard Epstein to discuss the balance between privacy and national security. Car buyers with a credit score of 680 or lower are in a position to make an intelligent tradeoff, and put themselves in the driver’s seat.

The Assembly Commerce and Labor committee was predictably unconcerned with privacy, but visibly distressed by a bundle of secondary issues, including the interest rate – the absence of a Nevada usury law was lamented – and customer demographics (percentage of minorities and women, that is). Do the lenders jump to repossess before they’ve made a reasonable attempt to collect? Who holds the finance company accountable for collection and repossession practices? Is the electronic device a means to bully the slow payers?

The answers can be found in the market. Starter interrupt devices are already widely deployed across Nevada and the 49 other states. The customer profile is obvious, and it’s built on credit history, not race or gender. Yes, a tarnished credit record costs you money. Lots of money, regrettably. No, lenders aren’t running madly through the streets smacking their lips as they seize devalued assets to haul away and list on their balance sheets. They prefer granting extra time or coming up with an alternative payment plan, if only a borrower with a problem would contact them.

The starter interrupt device encourages communication between lender and buyer, with positive results for both, according to PATA. It’s a fact that fell on the deaf ears of lawmakers who called for usury laws on behalf of single mothers plagued by high interest rates.

Where do single mothers turn when they lack money for life’s necessities? To extend the stereotype, which has become the last refuge of politicians making dubious arguments, women have been known to turn to men for money, leading to arrangements that sometimes prove more costly than a bad car loan. PATA says the starter interrupt device keeps interest rates lower than they might otherwise be, and it makes some loans possible, period.

The market has validated this particular intelligent tradeoff.  Time to unclasp those wringing hands, and use them instead to applaud an industry that’s come forward to promote best practices.


Nevadans seek state-mandated election audits

You’ll seldom hear a more vigorous defense of a state-run information system than the one mounted by election officials when voters challenge the legitimacy of an election. So it was earlier this week in the Nevada Assembly committee that vets election bills, where a group called the Citizen Task Force for Voters Rights showed up to promote AB209.

The bill would require the counties to establish an audit trail for each process involved in conducting an election. Voter registrars from across the state stepped up to protest the cost of implementing the measure, and to reassure lawmakers that their current practices are solid. Clark County’s Joe Gloria, as designated spokesman for his colleagues, touted their performance, noting that Nevada has received national recognition for election integrity.

The problem, says the task force, is that election departments are their own auditors. They investigate any reported irregularities, and not surprisingly, they find no fault in their own system. This wouldn’t fly for casinos or banks, and the task force wants Nevada’s elections subjected to external audits by fraud examiners, same as other high-stakes sectors.

Citizen Task Force for Voters Rights started as a group of voters seeking answers after a phantom candidate took 22.18 percent of the votes in a 2014 Republican primary contest. A man named Mike Monroe had captured 5,392 votes in Congressional District 4 without conducting a campaign. He had no financial backers, and never made appearances or walked neighborhoods. Their search for Monroe turned up no registered voter who knew him or voted for him. His supposed address was a vacant building.

Monroe’s voter turnout was all the more astonishing because his two opponents, then-state legislator Crescent Hardy and Las Vegas activist Niger Innis, conducted energetic campaigns and generated significant press coverage. Typically, anemic candidates facing better-known names would capture between 2 and 7 percent, according to task force research.

Since that election, task force members say they’ve devoted hundreds of hours to investigating election procedures in the counties encompassed by CD 4. They’ve reviewed materials, interviewed people who’ve worked at the polls, and researched the ways elections can be compromised.

They’ve compiled a list of election system vulnerabilities starting with the absence of audit trails and chain of custody records. Add weak voting machine security, training deficiencies, insufficient background checks, and undisciplined transportation procedures. The list also includes “failure to create a security culture.”

Some of the task force claims have years’ worth of anecdotal support from observers and polling place workers.

Election managers are passionate about their work, and nobody suggests they don’t take their task seriously. In the days since the AB209 hearing, two election officials have offered informal assessments of Nevada’s election system security. One described it as “bulletproof” and the other supports the assertion that it’s impervious to criminal interference.

To a reporter who’s covered voting security issues for more than a decade, they seem to be in denial. It was somewhat understandable in 2004, when electronic information management was still evolving. In 2015, they appear willfully blind to reality. No system is bulletproof. Sony wasn’t bulletproof. Athem Blue Cross, J.P. Morgan, and the U.S. Defense Department were not bulletproof. All of those entities spend millions more on security than budget-constrained Nevada election departments.

Consider also our reliance on minimally-trained election day volunteers, and the central role of the much-maligned Seqouia voting machines. It’s unnerving, even insulting, to expect intelligent taxpayers to believe that nothing can possibly go wrong.

Some lawmakers on the Assembly committee mirror the official demeanor, making it clear they favor blind reliance on the system over weighing thoughtful criticism from skeptical voters. Those legislators also reflect the tendency of election managers to blame questionable occurrences on the voters.

“Weird things happen (in primary elections),” said one Assemblyman, adding that primary voters are inclined to cast irrational votes.

The Citizen Task Force may struggle to get a second hearing.

Why Hillary’s State Department email and the Clark County School District email should have similar protection

Hillarymail, Part I: The data path to government computer networks should be secure

Nevadans should take special note of the revelations about Former Secretary of State Hillary Clinton’s email account, which she reportedly managed from a server in her New York home while she was serving in the Obama Administration.

Mrs. Clinton is being criticized for three reasons, including her astonishing presumption that rules don’t apply to her. The other two reasons are pertinent to Nevada’s own unsettled questions about the difference between email content created by public employees, which should be part of the public record, and email addresses assigned to public employees, which should not.

The content of Hillary Clinton’s State Department email, in its entirety, should belong to the taxpayers. And it would, if she played by the rules. As it stands, we’ll never know if we’ve seen the complete archive. Her email address, on the other hand, should belong to the United States Federal Government on behalf of the taxpayers. And it would, if she played by the rules. Hillary’s email address should have existed behind a layered, military-grade security protocol. Would it be safe there from hostile activity? We can only hope, but that’s the intention.

Why does this distinction seem obvious in the face of national security implications, but not when the security of Nevada school children and their teachers is implicated?

The Clark County School District made the right call, with no apparent understanding of how right it was, when it denied public records requests for teacher email addresses. The district said that sharing the addresses with the Nevada Policy Research Institute (and other requesters) would cause “countless businesses and organizations to continuously solicit district teachers through their work email.” In other words, the district thought making the email addresses public would create a nuisance.

NPRI then sued for the email database. The district’s motion to dismiss the complaint didn’t go far enough, nor was it sufficiently precise in claiming that broad use of teacher emails by outsiders would “frustrate” the purpose of the district’s communications network.

“Teachers would be forced to spend time sorting through phishing scams, computer viruses, and other unsolicited spam email,” the district asserted, if “organizations like (NPRI), as well as internet marketing companies, hackers and anyone else who may benefit from thousands of active email accounts…” were given access.  The additional traffic would “clog the servers and the computer systems, harming the public in the process.”

The harm envisioned by the district was inconvenience and misspent time due to commercial targeting of teachers. District officials apparently did not grasp the potential for malicious penetration causing catastrophic system failure. Neither did it link “phishing scams” and “hackers” with harm to student privacy. We’ve since learned from a separate conflict over academic standards that Nevada’s school districts are creating extensive student dossiers containing hundreds of personal, non-academic data points. What potential harms might come from an incursion into those information troves?

Email addresses are a data path, leading first to people, then to systems. Hostile nations might have used Hillary Clinton’s data path to glean State Department secrets. The math teacher’s data path could offer access to a valuable bundle of assets held by the nation’s fifth largest school district. Criminals could find payroll records, stalk students, or blackmail parents and administrators. The threats to these systems are utterly analogous.

There is compelling state interest in protecting government information systems at all levels. There’s no outcry in Nevada suggesting that school teachers are unreachable by the people who need to reach them. Tight system security does not constitute lack of transparency. We’ll soon see if the Supreme Court of Nevada agrees.

Hillarymail, Part II: Content is public record

The primary relevance of “HDR at Clintonemail dot com,” aside from its eloquent expression of presumed privilege, is its deviation from national security standards. Any omissions from the public archive can be corrected with the efforts of a diligent press, or a congressional investigation, or a special prosecutor if it comes to that.

The great (and not-so-great) thing about email is that it multiplies like bunnies. Anyone who destroys official email will live to regret it. Somebody, somewhere, will have the means, motive, and opportunity to resurrect regrettable messages.

State Department email messages, school district email messages, and all other email messages on taxpayer-funded systems are public records, and should be turned over to the public, period.

Hillarymail, Part III: Privacy and the infuriating double standard

Of all people who should realize that public life brings a diminished expectation of privacy, you’d think Hillary Clinton would top the list. Time will tell if it’s Hillary who will validate the infamous utterance of Google Chief Eric Schmidt: “If you have something you don’t want anyone to know, maybe you shouldn’t be doing it.”

Hillarymail, whether a scandal or a screw-up, is a vivid reminder that Washington’s top tier has a double standard when it comes to privacy. They want theirs, but they’re willing and eager to be part of the data-sucking machine that robs you of yours.

It’s also a great chance for the taxpayers to demand that our privacy, not theirs, should be paramount. On that front, the silence so far is deafening.