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Fighting Credit Card Fees; Next Wave of Foreclosures; President Obama Attends Holocaust Remembrance; Taliban Threat Rising; Mistake in Polo Horses' Supplement; Wildfires on the Move; California Priest Fights Foreclosures; Introducing the Peapod; Daycare Now a Luxury for Some

Aired April 23, 2009 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

TONY HARRIS, CNN ANCHOR: So you have a job, but many of your friends don't. You want to help, but soon realize it is a full-time job just finding jobs for others. We can help you. Just log on to CNNMoney.com.

If you carry plastic in your wallet, you may be among millions of Americans discovering big changes in their monthly credit card statements.

CNN's Brianna Keilar is on Capitol Hill for us, where new consumer rights are taking shape.

Brianna, good to see you again.

And what kind of changes are we talking about here?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, in this bill, this credit cardholder's Bill of Rights that the House is considering, Tony, a few big changes. One would give you 45 days notice. It would force credit card companies to give that you time before they could increase your interest rate.

Also, it would force credit card temperatures to send your bill out 25 days before it's due. And also, it would stop credit card companies from increasing your interest rate on your credit card because maybe you miss a payment or you're late on a payment for another credit card or some other debt.

Credit card companies, as you can imagine, Tony, they're not fans of this. They say that if they can't impose penalties on risky cardholders, they will basically have to spread those penalties around, and regular consumers, small businesses, may have a hard time getting credit or the amount of credit they want.

HARRIS: Yes. A couple of other points here, Brianna. What are chances of this getting through Congress?

KEILAR: Well, the House it is expected to get through, Tony. And there is a vote scheduled for next week. The Senate is more of a question mark. This is the area where this issue has run into trouble before. And if this does become law, Tony -- and as I said, it's a bit of a question mark, but if it were to become law, at least this House version, these rules, these changes, wouldn't go into effect until next summer, when the Federal Reserve is actually at the same time implementing similar changes to regulations on credit card companies.

HARRIS: Well, why not sooner?

KEILAR: Yes, that's the question, why not, especially with people having such a hard time maybe managing their finances right now?

Carolyn Maloney, the Democratic congresswoman behind this Bill of Rights, wanted these changes to go into effect very quickly. She was rebuffed by members of her own party who agreed with credit card companies that they couldn't implement changes quickly enough. The one thing so far she has managed to hang on to, Tony, is that 45 days before your interest rate goes up. Right now, that would be implemented pretty quickly.

HARRIS: Got you. OK.

Our Capitol Hill correspondent, Brianna Keilar, for us.

Brianna, thank you.

Personal Finance Editor Gerri Willis looks at your rights as a credit cardholder ahead in the NEWSROOM.

Now, if you think the worst for home foreclosures is over, take a seat and a deep breath. A new report predicts even more this year.

CNN's Mary Snow has more on the foreclosure crisis.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): It's seen as the next wave of foreclosures, people losing homes in areas that hadn't been problematic. That trend, says RealtyTrac, a company tracking housing activity, says unemployment is now a new factor in foreclosures, a problem spreading beyond losses tied to subprime loans.

RICK SHARGA, SENIOR VICE PRESIDENT, REALTYTRAC: We're going to see more people with traditional 30-year fixed rate vanilla mortgages suddenly join the ranks of people in foreclosure as they unfortunately lose their jobs.

SNOW: The unemployment level is 8.5 percent and climbing. And it comes as major lenders are lifting a moratorium on foreclosures.

One big question mark, how much relief will come with President Obama's plan to stem the tide? The president made homeowners one of his priorities in his first 100 days in office.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And through this plan, we will help between seven million and nine million families restructure or refinance their mortgages so they can avoid foreclosure. SNOW: The $75 billion plan was launched last month. Some economists expect it could take a few months to see a real impact. And while they expect it to help, some housing experts say more action may be needed.

ANTHONY SANDERS, ARIZONA STATE UNIVERSITY: The RealtyTrac numbers that just came out are really kind of sending a warning signal that it's going to be more difficult than I think the Obama administration was expecting.

SNOW (on camera): Loan modifications are a central part of the housing crisis plan, and some economists question how much help it will provide to people losing their homes because of unemployment, not unaffordable mortgages. As to the forecast, RealtyTrac expects three million homes to be in some state of foreclosure by the end of this year. That's up from 2.4 million homes last year.

Mary Snow, CNN, New York.

(END VIDEOTAPE)

HARRIS: And if you have got a House on the market, numbers out today suggest your wait for a buyer could drag on and on. The National Association of Realtors says sales of existing homes slipped three percent in March and more than seven percent from a year ago. Sales took a surprising jump, you may recall, in February, sparking hopes of a spring turnaround.

But if you read between the numbers, there are some good signs. Sales in the western U.S. fell 4.2 percent from February, but look at this. They're up almost 19 percent over this time last year.

Markets overwhelmed by the foreclosure epidemic show an uptick in sales over this time last year. That includes Phoenix.

Let's bring in KPHO reporter Nicole Crites.

Nicole, good to see you. Thanks for your help on this story.

NICOLE CRITES, KPHO REPORTER: Yes, Tony, good to see you as well.

You know, Forbes ranked 10 cities across the country this should do really well, and Phoenix ranked fourth because everyone wants to live here. We've got great weather, and our market is doing pretty well. Right now, the foreclosures have made the market more affordable than ever before. We have got some great deals to be had.

HARRIS: Well, let's drill down on that.

We've done a little research here for you, Nicole. The median price of a House in Phoenix, we understand, is certainly lower than it was last year. And so, really, what are you seeing? Are people finally deciding that perhaps it's time to buy?

CRITES: Well, what we're hearing from realtors is that now is the time that they're seeing a lot of first-time homebuyers get into the market because they couldn't afford homes before. But the problem is, is that they're looking to buy if homes are about $100,000 or less. So that's hurting the median value of homes. That's certainly gone down.

But apparently, last month, 5,800 homes sold. That was the most sold in a single month in the last three and a half years. So, some people are starting to say that this is starting to look a little bit better for the Phoenix market.

HARRIS: Does it -- looking better, but does it, in terms of the people you're speaking with about this, does it represent for that group a sense of a bottom in the market?

CRITES: Well, it seems like it, of course. Four thousand of those 5,800 homes were foreclosed homes, so they were selling considerably less than they're really worth.

In fact, just last month we did a story on a home in Avondale that three years ago sold for, what was it, $267,000, and just recently sold in a matter of 12 days for $86,000. So when we're talking about deals, this is not necessarily a good thing for other people living in those neighborhoods, although it's better to have homes occupied than foreclosed and empty.

HARRIS: Yes. Nicole, appreciate it. Thanks for your help.

CRITES: You bet.

HARRIS: Helping us drill down on the Phoenix market, Nicole Crites from KPHO.

As you can see, we've been hitting your credit and your housing pretty hard today.

Tell us about your own experiences with the credit card companies. Or, if you're trying to sell your House, how's it going?

You can leave your comments on -- no, we're getting comments on the blog? Really? Don't say lots.

You guys like this blog idea? All right.

We've got a blog page. Just go to CNN.com/newsroom. I guess maybe you're going to make a believer out of me.

GM looks ready to idle most of its assembly lines this summer, some for perhaps nine weeks. Reports say workers could be notified as early as today. The exact number of plants that will shut down and the number of GM workers affected isn't clear yet. GM traditionally shuts its plants for two weeks during the summer for the model year changeover, but the automaker already has enough inventory of some vehicles on hand to finish out the model year.

It is a long, hard road. Can GM and Chrysler pull themselves out of this big financial pothole? We will ask someone who has been following the auto industry through the best and the worst of times.

(COMMERCIAL BREAK)

HARRIS: And right now, as promised President Obama delivering marks at the Holocaust Days of Remembrance ceremony in the rotunda of the U.S. Capitol.

(JOINED IN PROGRESS)

OBAMA: "We were doing what had to be done." That is the question of the righteous, those who would do extraordinary good at extraordinary risk not for affirmation or acclaim or to advance their own interests, but because it is what must be done.

They remind us that no one is born a savior or a murderer. These are choices we each have the power to make.

They teach us that no one can make us into bystanders without our consent, and that we are never truly alone. That if we have the courage to heed that still small voice within us, we can form a minion for righteousness, we can span a village, even a nation.

Their legacy is our inheritance. And the question is, how do we honor and preserve it? How do we ensure that never again isn't an empty slogan or merely an aspiration, but also a call to action?

I believe we start by doing what we are doing today, by bearing witness, by fighting the silence that is evil's greatest co- conspirator. In the face of wars that defy comprehension, the impulse to silence is understandable.

My own great uncle returned from his service in World War II in a state of shock, saying little, alone with painful memories that would not leave his head. He went up into the attic, according to the stories that I've heard, and wouldn't come down for six months.

He was one of the liberators, someone who at a very tender age had seen the unimaginable. And so some of the liberators who are here today honor us with their presence, all of whom we honor for their extraordinary service.

My great uncle was part of the 89th Infantry Division, the first Americans to reach a Nazi concentration camp. And they liberated Ohrdruf, part of Buchenwald, where tens of thousands had perished.

The story goes that when Americans marched in, they discovered the starving survivors and the piles of dead bodies, and General Eisenhower made a decision. He ordered Germans from the nearby town to tour the camp so they could see what had been done in their name. And he ordered American troops to tour the camp so they could see the evil they were fighting against.

Then he invited congressmen and journalists to bear witness, and he ordered that photographs and films be made. Some of us have seen those same images whether in the Holocaust Museum, or when I visited Yad Vashem, and they never leave you. Eisenhower said that he wanted to be in a position to give firsthand evidence of these things if ever in the future there develops a tendency to charge these allegations merely to propaganda. Eisenhower understood the danger of silence. He understood that if no one knew what had happened, that would be yet another atrocity, and it would be the perpetrators' ultimate triumph.

What Eisenhower did to record these crimes for history is what we are doing here today. That's what Elie Wiesel and the survivors we honor here do by fighting to make their memories part of our collective memory. That's what the Holocaust Museum does every day on our National Mall, the place where we display for the world our triumphs and failures and the lessons we've learned from our history. It's the very opposite of silence.

But we must also remember that bearing witness is not the end of our obligation. It's just the beginning.

We know that evil has yet to run its course on Earth. We have seen it this century in the mass graves and the ashes, the villages burned to the ground, and children used as soldiers, and rape used as a weapon of war. To this day, there are those who insist the Holocaust never happened, who perpetrate every form of intolerance, racism and anti-Semitism, homophobia, Xenophobia, sexism, and more, hatred that degrades its victim and diminishes us all.

Today and every day we have an opportunity, as well as an obligation, to confront these scourges, to fight the impulse to turn the channel when we see images that disturb us, or wrap ourselves in the false comfort that others' sufferings are not our own. Instead, we have the opportunity to make a habit of empathy, to recognize ourselves in each other, to commit ourselves to resisting injustice and intolerance and indifference in whatever forms they may take, whether confronting those who tell lies about history, or doing everything we can to end and prevent atrocities like those that took place in Rwanda, those taking place in Darfur.

That is my commitment as president. I hope that is yours as well.

It will not be easy. At times, fulfilling these obligations require self-reflection.

But in the final analysis, I believe history gives us cause for hope rather than despair, the hope of a chosen people who have overcome oppression since the days of Exodus, of the nation of Israel rising from the destruction of the Holocaust, of the strong and enduring bonds between our nations. It is the hope, too, of those who not only survived, but chose to live, teaching us the meaning of courage and resilience and dignity.

I'm thinking today of a study conducted after the war that found that Holocaust survivors living in America actually had a higher birth rate than American Jews. What a stunning act of faith, to bring a child into a world that has shown you so much cruelty, to believe that no matter what you have endured or how much you have lost, in the end, you have a duty to life.

We find cause for hope as well in Protestant and Catholic children attending school together in northern Ireland, in Hutus and Tutsis living side by side, forgiving neighbors who have done the unforgivable, and a movement to save Darfur, that has thousands of high school and college chapters in 25 countries and brought 75,000 people to the Washington Mall, people of every age and faith and background and race, united in common cause with suffering brothers and sisters halfway around the world.

Those numbers can be our future. Our fellow citizens of the world showing us how to make the journey from oppression to survival, from witness to resistance, and ultimately to reconciliation. That is what we mean when we say never again.

So, today, during this season when we celebrate liberation, resurrection, and the possibility of redemption, may each of us renew our resolve to do what must be done. And may we strive each day both individually and as a nation to be among the righteous.

Thank you. God Bless you. And God bless the United States of America.

(APPLAUSE)

HARRIS: President Obama delivering remarks at the Capitol Rotunda today. The Holocaust Days of Remembrance ceremony just wrapping up there at the Capitol Rotunda.

This year's theme, as you heard the president refer to just at the end there, "Never Again: What You Do Matters."

Still to come in the NEWSROOM, it is a long, hard road. Can GM and Chrysler pull themselves out of this big financial pothole?

We will ask someone who has been following the auto industry through the best of times and the worst of times.

(COMMERCIAL BREAK)

HARRIS: Beautiful Centennial Olympic Park right here in downtown hot Atlanta. It will get pretty warm today. About 82 degrees for the high. Traffic and weather together for you here at CNN.

You know, Chrysler faces a deadline one week from today. It has got to swap debt for equity, cut costs and negotiate a deal with Fiat, and reach a deal with creditors. Over at GM, they've got, what, 40 days to submit a viability plan to the government?

John Wolkonowicz is a senior auto analyst with Global Insight, and he joins us from Lexington, Massachusetts.

John, thanks for your time.

JOHN WOLKONOWICZ, SENIOR AUTO ANALYST, GLOBAL INSIGHT: Good to be with you. HARRIS: OK. So, John, look, one week to go for Chrysler. Let's start there. How's it looking?

WOLKONOWICZ: Kind of 50-50 at this point. You know, I think the real sticking point is going to be the bondholders. There are some of them that actually believe they would make out better with Chrysler in a bankruptcy.

HARRIS: Really?

WOLKONOWICZ: That's not a good situation for Chrysler.

HARRIS: Well, let's drill down on this one. I get that the banks and, in some of these cases, hedge funds hold about, what is it, $6 billion, nearly $7 billion in Chrysler debt? And they want a better deal. I get that.

But as a group, they are being asked by the government to forgive much more of that debt. But if this Chrysler restructuring deal falls apart because the debt holders are perceived to have held out for a better deal for their shareholders, I mean, come on, isn't that a problem for these banks? Isn't this a problem for the street?

WOLKONOWICZ: I don't think so. I mean, they have a fiduciary duty, the banks, to get the best deal for their shareholders. To do anything else is, you know, not doing their fiduciary duty.

HARRIS: John, is it a problem for some of these big banks that may have received taxpayer dollars?

WOLKONOWICZ: It might be as far as Obama administration is concerned, yes. But, you know, most of the Chrysler debt is secured debt, so that debt will pay back something in a bankruptcy. You know, unlike GM, where the majority of it is unsecured.

HARRIS: Got you. And John, you say a Chrysler bankruptcy wouldn't be as severe as, say, a GM bankruptcy. Maybe you can explain that for us.

WOLKONOWICZ: Well, Chrysler is a much smaller company. I think the government has looked at the impact that a Chrysler bankruptcy would have versus a GM bankruptcy. And I think that while the government believes GM may very well be too big to fail, I don't think they feel that way about Chrysler. And I think that also increases the probability of a bankruptcy for Chrysler.

HARRIS: OK. Let's drill down a little bit more on the GM story.

GM says it will close plants in the United States for as long as nine weeks in some cases this summer. You know, it says it's doing this to meet demands of the government's restructuring desires. It doesn't sound like GM has much of a choice here.

WOLKONOWICZ: No, they don't. I mean, they right now have 130- or-so-day supply of vehicles out there in dealerships. That's more than twice the 60-day supply of vehicles that's considered ideal. The dealers are loaded up. They don't want to order any more. So, really, it does make sense for GM to stop producing for a while.

HARRIS: So, 50/50 for Chrysler to come in under the deadline. What is a restructured GM look like, and what are chances that it comes in with its plan given the deadline?

WOLKONOWICZ: Well, you know, the Treasury Department is working in conjunction with General Motors to create GM's restructuring plan. The government really wants GM to restructure outside of bankruptcy, I believe. And I think there's a good chance that they will be able to do that.

I'm kind of saying maybe a 60 percent to 70 percent chance that GM can do a restructuring outside of bankruptcy. I really do believe that the government feels that a GM bankruptcy is just too risky, because, you know, this idea of a 15-day quick rinse, that's fine in the textbooks, but it's just not going to happen that way. It's going to take a lot longer. And as you know, the longer you stay in bankruptcy, the more serious the situation becomes, and the higher the probability that you'll never exit. HARRIS: There you go.

John Wolkonowicz is a senior auto analyst with Global Insight.

John, appreciate it. Thanks for your time.

WOLKONOWICZ: Good to be with you.

HARRIS: President Obama is meeting with credit card company execs this afternoon. He is expected to talk about all those rates going up and pressing for more consumer-friendly practices.

Our Personal Finance Editor Gerri Willis knows all about this. And she's joining us now from New York.

And Gerri, look, how bad is it for all of us? And most of us in the country do carry some plastic in our wallets.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's right. It seems like everybody does. Let's take a look at why this is such a big deal right now.

Credit card issuers have sort of been tightening the screws on us, even those of us who are up to date and on time paying our bills. Consumers are complaining not only that rates are rising, but that limits are falling. And that's hurting our credit scores.

Some issuers are closing accounts due to inactivity, and that can also hurt your credit score. Here are specific examples of changes that people are complaining about.

Capital One increased rates for its Platinum Prestige customers to 11.9 percent from 7.15 percent. Bank of America increasing rates on cardholders with high balances. Discover will increase its balance transfer rate to 4 percent from 3 percent. For that reason, experts are expecting some kind of reform to come. Already, there are two bills in Congress. Both would ban credit card companies from abruptly jacking up interest rates and fees, and they would also prevent young folks, college students, really, from getting credit cards.

As you know, Tony, so many college students are offered these cards. They use them. They get in trouble.

HARRIS: Yes. That's interesting. You mention their new rules on the horizon. I know the Federal Reserve is working on some language. And also, as we've been hearing from Brianna Keilar, the House is likely to pass some legislation.

WILLIS: Right. Let's talk about those Federal Reserve rules that go into effect next year, July 2010. Here's what you can expect. Interesting stuff.

First of all, your payments would go to the high interest balance first. That's not necessarily the way it works right now.

Limits on over the limit fees. So, if you spend over the limit right now, you get socked with a fee. Maybe we could bring those down, eliminate them entirely.

It ends universal default. If you're late on your water bill, you can't get knocked on your credit cards.

Longer billing cycles. That's a very big issue.

And I have to tell you, Tony, I ran into Representative Carolyn Maloney, right here in New York this week. She's the author of the Credit Card Bill of Rights, as you were just mentioning. And that bill, of course, just passed through a congressional committee last night.

She says having the rules are one thing from the Federal Reserve, but remember the mortgage industry was ripe with rules. There were all kinds of rules around mortgage lending, and the crisis happened anyway. She says you need the force of law behind the changes. She really wants to get her legislation passed, so we'll see if that happens.

HARRIS: Enforcement is so important in these areas.

If you would, Gerri, before you get away from us, give us a bit of a preview of the big "OPEN HOUSE" show this weekend, please.

WILLIS: Well, you know, we're calling it "YOUR BOTTOM LINE" now.

HARRIS: Oh, it is "YOUR BOTTOM LINE."

WILLIS: Yes, it's "YOUR BOTTOM LINE" now because we're tackling so many different issues on that show now. So many money issues.

We're going to be talking about some interesting stuff about if you want to be a college student, you're getting those financial packages right now, how to compare them, how to get some deals at your local hardware store. We're all over it.

And, of course, we're going to be talking about, as everybody is on this network, the first 100 days of President Barack Obama, what it means to your bottom line -- 9:30 a.m. Saturday morning. Join us.

HARRIS: It's stamped on my forehead. Thank you, Gerri. Appreciate it.

WILLIS: My pleasure.

HARRIS: More details of President Obama's pushback against credit card companies on our Web site. Check out our special at CNNMoney.com.

(COMMERCIAL BREAK)

HARRIS: Pakistan's army pushing back against the Taliban. Right now paramilitary troops are deployed in Buner district. That's about 60 miles from the capital of Islamabad. Troops are trying to take back control of government buildings and bridges seized by Taliban militants.

The Taliban takeover is worrying Washington. Secretary of State Hillary Clinton warns that Pakistan risks falling into terrorists hands. She discussed the situation just this morning before a House committee.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: Is a significant opportunity here for us working in collaboration with the Pakistani government to help them get the support they need to make that mindset change and act more vigorously against this threat.

(END VIDEO CLIP)

HARRIS: This threatening situation has been building for some time. Our Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT (voice-over): It's a telling notion. Could the Taliban be planning and succeed in taking over Pakistan?

CLINTON: We cannot underscore the seriousness of the existential threat posed to the state of Pakistan.

STARR: The problems have moved beyond the lawless border region. After seizing the Swat valley, Taliban militants have increased their presence in the neighboring Buner district, some 60 miles from the capital Islamabad.

The U.S. doesn't believe militants have full control of the region. But that may not matter. The Taliban vowed to bring sharia law here. That means fewer rights for women and swift, hardline justice. All a challenge to Pakistani President Asif Ali Zardari.

Admiral Michael Mullen, chairman of the U.S. Joint Chiefs of Staff, is back in the region for more meetings with Pakistani commanders.

U.S. officials insist Pakistan still fully controls its nuclear weapons but there is deepening U.S. worry that Pakistan's military remains reluctant to challenge the Taliban in their effort to appease militant may have simply emboldened them.

MAJ. GEN. MICHAEL S. TUCKER, INTL. SECURITY ASSISTANCE FORCE: It is on our radar. We're concerned about that.

STARR: Concerns are only growing. The latest U.S. assessment? Insurgent leaders may have thousands of fighters in their ranks.

(END VIDEOTAPE)

HARRIS: Our Pentagon correspondent Barbara Starr.

Wildfires are threatening homes in South Carolina. We will get the latest on conditions there.

(COMMERCIAL BREAK)

HARRIS: A bit of breaking news. At least news just in to CNN.

We told you earlier this week about 21 polo horses that died over the weekend, last weekend, before a championship match in West Palm Beach, Florida. We are learning from an official of a Florida pharmacy company that the business incorrectly, this particular pharmacy, incorrectly prepared a supplement for the 21 polo horses that died. The pharmacy says it is cooperating with an investigation by state authorities and the Food and Drug Administration.

Kim Segal, our CNN producer, is on the line right now.

And Kim, if you would, what else can you tell us about this story, which shocked so many when we reported it earlier this week.

KIM SEGAL, CNN PRODUCER (via telephone): Well, It has been days now that both the University of Florida Veterinary School and Kissimmee Clinic in trying to find out the cause of death on these horses. And they've been doing all kinds of -- different reports. They were looking at blood sample, organs and they have not come up with anything. They're waiting for toxicology.

And then all of a sudden today, this pharmacy comes out and says, look, we know we prepared some the medicine for these horses. We ought to do our own internal investigation to see if maybe we had something to do with the death of these horses. So they just issued a statement saying their internal investigation concluded that they did indeed put the strength of an ingredient in the medication for the horses that was incorrect. So we don't know -- we haven't talked to investigators, we haven't talked to the people doing the blood work, the toxicology report, to confirm this medicine did indeed kill these horses, but apparently there -- here is, you know, one thing that's going to be looked into.

HARRIS: OK, CNN producer Kim Segal for us.

Kim, appreciate it. Thank you.

All right. Let's take a look at the markets right now. And, of course, as we do this, we always remind you, you can find the latest financial news at cnnmoney.com. As you can see, just past three hours into the trading day. The Dow down 42 points. The Dow started in positive territory and has been trading down since. And the latest on Nasdaq? We'll get you figures on Nasdaq in just a couple of minutes.

The inspector general tracking all those TARP billions has a warning for anyone trying something funny. Neil Barofsky says there are 20 criminal investigations into whether tax dollars are being pilfered or wasted. He testified this morning before a congressional panel.

(BEGIN VIDEO CLIP)

NEIL BAROFSKY, SPECIAL INSPECTOR GENERAL: By letting all those out there who may seek to criminally profit off of these programs should know that we're out there and we're not alone. That this is a combined federal law enforcement. We're going to marshal our resources to bring those that may try to steal to justice.

(END VIDEO CLIP)

HARRIS: The inspector general added that the Treasury Department needs to be more open about where all of those TARP funds are going.

Two big fires to tell you about raging in South Carolina and Florida. A fast moving fire that has already charred thousands of acres is approaching one of South Carolina's busiest tourists areas. This iReport is from Pete Venuto -- Pete, appreciate it. Thank you -- taken today in Myrtle Beach, where he lives. Some 2,500 people have been told to evacuate.

(BEGIN VIDEO CLIP)

MAYOR MARILYN HATLEY, NORTH MYRTLE BEACH, SOUTH CAROLINA: Southwest 22 and 31 exchange. The fire seems to be picking up again. At noon, the Myrtle Beach Fire Department is sending the USAR team for building search. And our building department, the North Myrtle Beach Building Department, is, at the present time, conducting damage assessment. Until a damage assessment is completed, we will not know how many structures have been damaged or destroyed.

(END VIDEO CLIP)

HARRIS: Alligator alley, a main link between Florida's east and west coast, remains closed as a massive brush fire burns through the big Cypress National Preserve. Firefighters are letting the fire burn to reduce fuel for future fires.

A lot to talk about with Bonnie Schneider in the Severe Weather Center, in today for Chad Myers.

Bonnie, where you starting there?

BONNIE SCHNEIDER, AMS METEOROLOGIST: Well, we're starting in South Carolina, Tony, because we're taking a look at Google Earth on the magic wall just to show you. This is an area here very highly populated right along the coastline. So, unfortunately, the fires are burning certainly very near to where a lot of people live in beautiful beachfront property in and around Myrtle Beach.

I'm going to move this out of the way so we can see what's going on in the region. We're tracking the temperatures. They are warm. And definitely warmer than typical for this time of year, well into the 70s across much of South Carolina.

Now, here's what's interesting. We also have a dense smoke advisory until 8:00 tonight and that means that we are tracking the smoke blowing. The winds are coming from the southwest. So the smoke is actually blowing in this direction. Moving more towards the northeast. So that means areas into North Carolina and along the coastline could very well see some smoke as the day goes on. So we'll be watching for that very closely indeed.

I want to show you what else is going on. We're also tracking this threat for fire weather and for heat as we go through the day today. You can see the heat has been building across the west and now it's actually pushing further to the east. So the weather focus shows that we are looking at warm and dry conditions over a good portion of the southeast and it's certainly not just South Carolina, but it also is Florida, where we have that other fire burning in alligator alley.

So, Tony, it's really this entire region of the country that's looking at some hot and dry conditions as we go through the day today.

HARRIS: OK, Bonnie, appreciate it. Thank you.

SCHNEIDER: Sure.

HARRIS: Is the solution to foreclosure to get together with a group? One priest thinks so.

(COMMERCIAL BREAK)

HARRIS: Today CNN brings together "Money & Main Street," where we see the real impact of the current economic climate on real Americans. Plenty of folks around the country are dealing with foreclosure. One priest in a suburb of Los Angeles found it's better to deal with foreclosure as a group. CNN's Thelma Gutierrez explains.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): Acoma (ph), California, is a community in crisis.

REV. JOHN LASSEIGNE, MARY IMMACULATE CHURCH: People here were targeted, again, by banks and investors.

GUTIERREZ: This southern California community was a target for predatory lenders and now one out of every nine homes is in some stage of foreclosure.

LASSEIGNE: Some of them have fallen behind and live in fear of losing their homes.

GUTIERREZ: So this catholic priest who's never owned a home himself, is preaching foreclosure 101 to his flock.

LASSEIGNE: The banks be obligated to modify the loans.

GUTIERREZ: It's a twist on the Gospel for Juana Rodriguez (ph), who has a high interest, subprime loan, and Juan Carlo Hogoba (ph), whose home is about to be sold off by the bank.

UNIDENTIFIED FEMALE: We need, as a community, to be there. United we can do it.

GUTIERREZ: Father John Lasseigne and community organizers from a group called One L.A. want the banks to negotiate with the families.

LASSEIGNE: There are actually hundreds if not thousands of families in my immediate neighborhood at risk of losing their homes.

GUTIERREZ: Over several months, Juana and the others are prepped on finance. She's being taught the art of negotiation and how to understand stuff in fine print she didn't know before. The meetings are standing room only.

JUAN CARLO HOGOBA: They see that we're not alone and that we are fighting for our homes as a community.

GUTIERREZ: Three hundred families strong. Father John and his allies convince a half dozen banks to come to the table. This is where Juana and the others put all they learned to the test.

UNIDENTIFIED MALE: As a result of these negotiations, we're going to have evidence of what the banks are willing to do and not willing to do.

GUTIERREZ: Evidence One L.A. and Father John say they will present to Congress. But for now, Juan Carlos has his foreclosure temporarily postponed. Juana negotiated her way out of an adjustable to a 30-year fixed loan. For her, it's a fresh start and an answer to her prayers.

Thelma Gutierrez, CNN, Acoma, California.

(END VIDEOTAPE)

HARRIS: Well, we will stay in touch with Father John and the community of Acoma to let you know about their progress.

And you can see more "Money & Main Street" with Roland Martin tonight at 8:00 Eastern and a new "Money & Main Street" every Thursday morning on "AMERICAN MORNING."

It is called the Peapod and Chrysler hopes you'll snap one up for all of your city driving. What's in it for you?

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HARRIS: And this just in.

Shell Oil announced this hour the company is settling a lawsuit brought by two environmental groups. Shell will spend millions to upgrade refinery facilities in Houston to reduce pollution. It will also pay a civil penalty approaching $6 million. The bulk of the penalty will pay for pollution control devices on area school buses. Environmentalists claim Shell and its subsidiaries released benzine into the air along the Houston ship canal. And long-term benzine exposure can cause leukemia.

Even as the auto industry struggles, more alternative vehicles are hitting the market every month. CNNMoney.com's Poppy Harlow is on the streets of New York with one of them, the Peapod.

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POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: We've heard so much about electric cars, especially GM's Chevy Volt, but this is the Peapod. You may never have seen it. It's a fully owned subsidiary of Chrysler. It's going to hit the market in October. It's $12,500. And it is mainly all made in the United States, in Fargo, North Dakota. That's where the factory is.

There are a lot of questions about these electric car, especially the range, the cost, all of that. We're going to bring in Peter Arnell. He's the designer here.

And let's talk about it because what's so interesting is you started this project just six months ago and it's 95 percent made of recycled material.

PETER ARNELL, PEAPOD DESIGNER: Well, you know, we decided to make a really eco-friendly vehicle, right, in every single way. All battery, zero emissions. We decided from a materials perspective, it would be really, really exciting if we could have a car that could be totally recyclable and also made of recyclable materials. And we accomplished that.

HARLOW: And what is the cost per mile to folks?

ARNELL: Two cents.

HARLOW: Two cents per mile?

ARNELL: Yes, impossible to imagine, but it's the truth. HARLOW: There are a lot of concerns, especially about safety, and also the fact that batteries just don't perform as well in cold weather.

ARNELL: Well, it's a neighborhood electric vehicle, right. It doesn't go on highways. It's made to run into town, drop off the kids, do errands, et cetera, et cetera. You know, you don't need an SUV to go get a gallon of milk, right? And as far as the batteries go, of course as we know, it reduces slightly the total distance. So if a normal charge would get you to 30. If it was getting colder outside, it would probably get you to, you know, 20 percent or 25 percent less in its total charge.

HARLOW: Now, of course, most parts of this, including the battery, are made in the United States. And everyone knows just a predicament that the U.S. automakers are in, especially GM and Chrysler on the brink at this point. How important is innovation right now for Chrysler?

ARNELL: Well, I think that Chrysler has had a long history of innovation for over a hundred years. And I think we just continue it here. I think showing the world today that we can be making cars this simple, this inexpensive, this eco-friendly that have such a great price tag associated with it is a powerful, powerful innovation platform that the American people want to see. And the fact that we're making it in America right now, the fact that it's designed in a way to make, I guess, everyone love it, you know, it's got a lot of good energy to it.

HARLOW: All right. We know you love it. It's your design. I'll leave you with this. This is the iPod that shows you your charge. You have to plug it in to get the car to work. And you can find out more at peapodmobility.com.

Of course, we're going to see GM roll out their Chevy Volt in 2010. Detroit Electric also coming out with an electric vehicle soon.

(END VIDEOTAPE)

HARRIS: Poppy, appreciate it. Thank you.

A tough economy means changes at your local day care centers. We will show you some of the creative services being offered.

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HARRIS: Is the economy keeping your child out of preschool? For many parents, the price is forcing them to scale back on daycare or pull their kids out all together. Samantha Hayes has more.

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SAMANTHA HAYES, CNN CORRESPONDENT (voice-over): Sylvia Moreno used to have a waiting list of parents waiting to enroll their children into the Guiding Star Child Care program. But now the director of this Bethesda, Maryland, daycare says the effect of the poor economy are forcing many parents to cut back.

SYLVIA MORENO, DIRECTOR, GUIDING STAR CHILD CARE: It's not the expense that you cut. It's cable. It's eating out. Child care you kind of need. But this year it's getting really tough. I mean people are taking them out.

HAYES: For many families who can no longer afford the extra bill of daycare, they're instead turning to family for help.

MORENO: I'm noticing that it's more of a collective effort. There's a couple of families who either have grandma, grandpa, they have an aunt at home who can like pick up their children.

HAYES: And she's not alone. Alyson Beverly runs Countryside Daycare in Ruther Glen, Virginia. She's seen 16 parents pull their kids since Thanksgiving.

ALYSON BEVERLY, COUNTRYSIDE DAYCARE DIRECTOR: It is dramatic. Parents can't afford to go back to work at $8, $9 an hour when you're spending full price for daycare. We've had to get creative with our programs. We have far less fewer full-time students. Most of them have gone to part-time now.

HAYES: Some of the discounts being offered are parents night out, where the daycare stays open until 9:30 p.m. at no charge. They've also added Saturday hours as a way of creating more revenue.

HAYES (on camera): According to the National Association of Childcare Resources and Referral Agencies, daycare can cost families more than $1,000 a month. It depends on the age of a child and the state.

In Washington, I'm Samantha Hayes.

(END VIDEOTAPE)

HARRIS: And we are pushing forward now with the next hour of CNN NEWSROOM with Kyra Phillips.