1. 6 million vehicles and a dozen deaths, General Motors is now offering 500 towards the purchase of a new car for owners affected by the controversial ignition switch recall. Joining me now a former senior enforcement attorney for the national highway Traffic Safety administration, the regulator of gm. Great to have you here, alan. Thanks for coming on. I want first your reaction to what gm is offering to consumers . Well, the 500 credit toward the purchase of a new vehicle does nothing to remedy or fix the old vehicle which is defective. And theyre not offering to repurchase the old vehicle. So, you know, i dont, view it as constructive from a safety standpoint. And they have had some strategic reason for doing it, kind of a, you know, a nonbuyback preemptive strike on class actions or try to create some goodwill for their customers who have been driving around with defective vehicles. Frankly if i was a customer, had a defective vehicle i would be less inclined to buy another vehicle from the same manufacturer. Gerri you make a good point and you told one of our producers you saw their move today as a gimmick. Well it is a marketing gimmick, sure. Gerri it is a marketing gimmick. Here is what theyre offering. 500 purchase or lease of new 2014 chevy, buick, gm. C or cadillac. Only available through april 30th. The company is very careful to say, the dealers should not use these as incentives. This sounds a lot like incentive money frankly. This is the level you would see incentive money at. Is this going to be misread by a public angry about the 10 years it took this company to recall these cars . Very possibly. The issue should be why did it take so long to recall them and what are they doing to fix them or compensate owners of these vehicles, those who have been injured and those with diminished value of their vehicle. Simply giving them a 500 credit on buying a new seek without taking the defective vehicle off the road, doesnt serve any safety purpose. So i would be pretty skeptical about gms motives here. Gerri there are questions of liability here and given the fact that gm went into bankruptcy, reformulated and basically became a new company, they might be willing to argue that it is not their problem. What do you say to that . Well, that is not entirely true because if they should have conducted the recall earlier, the earlier time period covers not only the time of the prebankruptcy old gm but also the years since the bankruptcy. Why was this recall first initiated in february of 2014 rather than a year earlier, two years earlier, let alone 10 years earlier . Gerri good point. Lear are some cars being recalled as we said many times. Chevy cobalt. Pontiac g5. We have a full screen to tell you cars were talking about. If you own one of these things you need to get to the dealer pronto and ask for this thing to get fixed. Im sorry, alan, another commentary we had this afternoon from a consumer activist, ralph nader, saying there has been a coverup here. There needs to be an investigation. Do you think there has been a coverup . The preliminary information certainly seems to suggest that General Motors should have recalled the car a lot earlier. Now why they didnt and who the individuals were who were involved remains to be seen. The national highway Traffic Safety administration recently sent a very detailed special order to General Motors with 107 items on it. Essentially saying, what did you know and when did you know it and who were the individual involved . So i think the agency will make a very good effort to get to the bottom of this. Gerri thats interesting. Now you worked for nhtsa. This kind of thing, how far up does it go . Is this something that the ceo knows about, the board knows about, or is this middle Management Decision Making . In this instance i dont know. You know well have to see what the evidence shows and what the documents showed. In my experience off the times they, offtimes, when there is egregious failure to do recall earlier the company will say some lower level person or middle manager who was responsible, usually someone about to retire but the evidence sometimes suggest that is the corporate knowledge went somewhat higher up. Gerri well, alan, thanks for coming on the show tonight. My pleasure. Gerri hope you can come back soon to continue covering this story. Thank you. Thank you. Gerri unbelievable. Well the gm scandal isnt the only headline rocking congress today. The leaders of the Senate Banking committee announcing bipartisan plans to dismantle fannie mae and freddie mac nearly six years after taxpayers footed their multibilliondollar bailout. So will government finally get out and stay out of housing . Joining me first on fox interview, the Ranking Member who is helping draft the legislation, senator mike crapo from idaho. Welcome to the show. Tell us about your legislation. What does it hope to do . Frankly, gerri, the today the tax payer is in first loss position on virtually 90 to 100 on our mortgage debt in the United States. Private sector involvement, Capital Formation is stifled by the system we have in place. What our legislation does is wind down fannie mae and freddie mac, create a strong system of underwriting so we dont have the kind of risk of toxic mortgages that created the last crisis. And then put together a government backed Reinsurance Program that will put private capital back into the marketplace and put private capital in a first loss position as we move forward in our system protecting the taxpayer. Senator, i was read about your bill and from what i understand there would be a backstop as you say of money from the companies themselves, the money, companies that actually make the loans. Of 10 cents for every dollar of mortgage debt. So if youre repackaging mortgages out there, this could be a lot of money. What is to say that banks stay in the business of mortgage lending if theyre facing what is essentially a huge tax on the business . Well, it is not necessarily a huge tax. It is just means that they have to have skin in the game. It means that the taxpayer can not be looked to be the first loss position if we get into a crisis. But remember, as i said, were putting together an underwriting system that will assure that we avoid the toxic mortgages that caused this crisis. We are putting together a requirement that there be an ability to repay by borrowers. That there be adequate down payments. That there would be adequate mortgage insurance in the front position that would even protect this first loss position. But we frankly are requiring that those who want to get into the business of marketing mortgages in the United States can be, must be a part of the risk. That there must be some risk on the part of the private sector rather than putting it all on the government. Gerri one of the big concerns from consumer advocates frankly we might lose the 30year fixed mortgage. Were one of the few western societies who frankly have one anymore. Dick bove, wellknown financial analyst on wall street today said, if you get rid of fannie and freddie, if you downsize them, if you do away with them, you essentially get rid of 30year fixed mortgages. Does he have that right . No, he has that wrong. The fact is that our plan, and our proposal will protect the 30year mortgage. That is the government backed reinsurance system that we are establishing. We are requiring that the private sector have a first loss position of 10 as you indicated but there is a governmentbacked Reinsurance Program, similar to the fdic for deposit insurance protection. And that will preserve the 30year mortgage in the United States markets. Gerri what are going to be the new requirements for homebuyers and what do i say to critics who say there is not enough protection of programs that would help lower income folks get houses . We do have programs in place in our legislation that would help to protect for lowincome and underserved markets. And as a result of that, i think that those critics are just not correct. There are some who would like to go back to the days of the past when we had the kind of housing goals and mandates put on the private sector that literally drove fannie and freddie to help push this market into the toxic assets that generated the crisis and its correct that we are avoiding that. Were going back to system of strong underwriting, solid mortgages and protect put into place but we are providing a support base for underserved markets and for low income. Gerri you know, people who watch this network were unhappy to see fannie and freddie bailed out to the tune of 102 billion im sorry, 187 billion, they paid that back and then some. Essentially all the profits are going to the federal government. Thats correct. Gerri professional investors are starting to beef about that. It is not right. It shouldnt happen that way. What do you think, senator . That issue what should happen with the profitability much fannie mae and freddie mac today is one that will be decided in court, not by our legislation. The question that is being raised i think it is a legitimate question. Right now all of the profits of fannie mae and freddie mac are going to the u. S. Treasury. Remember though, there was a time when the taxpayer put 180 billion out and the question is simply whether the taxpayers should get repaid for that on a dollar for dollar basis or whether the taxpayers is entitled to have some of that profit at least interest as we get into a profitability posture. Like i say that issue will be resolved by the courts. It is not an issue our legislation resolves. Gerri profitability posture is always a good place to be i guess. Do you think this bill is going to pass, and do you think you can get real momentum behind it . Because i think there is lot invested in having fannie mae and freddie mac stay. There are at love critics who say these two entities must go, have to go to have a safe and secure Housing Market but do you think you can fight back against that . Yes i think we can. I think the majority of the momentum is against sticking with the Current System because as i said, it puts the taxpayer in a first loss position. Frankly it stifles private sector Capital Formation. I think we have a strong bipartisan coalition. I believe there will be very strong support from the private sector and from those who are taxpayer advocates and i believe that we have a good chance of passing this legislation. Gerri senator crapo, thanks for coming on the show tonight. Great to see you and i hope you come back as you work on the legislation. Well do it. Gerri thanks so much. Thank you. Gerri weve got more and to come this hour including why lady gagas charity is under fire today and how you can avoid donating to the wrong cause. Target also feeling the heat. Again this time for photoshopping adings of young girls. This as fewer people shop at the retail giant. The latest coming after the break. Can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx tins move forward, so does the rest of the economy. Csx. How tomorrow moves. Are you still sleeping . Just wanted to check and make sure that we were on schedule. The First Technology of its kind. Mom and dad, i have great news. Is now providing answers families need. Siemens. Answers. Gerri target data breach is causing wary customers to keep their distance. Customer traffic in january online and on stores tumbling to the lowest point in three years. According to the Consulting Group kantar retailers, 33 of people shopped at target in january, compared to 43 earlier. Again x, shoppers ages 3to 49 are or were one of targets core customers groups. These customers declining to 38 from 53 last year. Many customers are leery shopping at discount retailer, target is not doing much to win them back of the company tonight under heavy fire because of its heavyhanded photoshopping ads aimed at younger girls. Theyre blasting online ads of bikini models with thigh gaps. You can see this. Very thin arms. Hear to weigh in, kristin benz, pmc venture here on set. Thank you. Gerri what do you make of the ads . What do you not make of it . It is horrible and photoshopping gone wrong and bad he had iting. Gerri this something they would do all the time putting on this advertising. Any mom looking at that would be appalled. Forget the girls. I know there is lot of conversation about the impact onioning womens psyches, et cetera, but moms will be particularly perturbed. Absolutely. We all like a little note shopping here and there but that is taking it to the extreme. Gerri it seems unseemly. Gerri yeah, it is kind of gross. Im going to talk to you a little bit what is going on with targets traffic. Weve seen the foot traffic decline. I get tweets all the time from viewers, im not going there anymore because of what happened in december. Does this problem linger for them . Is this something, an image they cant get rid of, that they cant keep your Information Safe . Definitely another nail in the coffin for them. They cant get out of their own way. When they had the data breach they violated number one rule, apologize early and apologize often. They waited and gave people free credit reports. Who wants another one of those. They cant get out of their own way. Gerri 40 million accounts were breached and 70 million had personal information taken. Unbelievable what happened. Well give you some credit protection. People rightly said that is not really all i need here. Clearly this is something that all of retail is struggling with but target really got the black eye here. It impacted earnings. What kind of outlook do you have for this company . Target is severing just like a lot of other middle class retailers like walmart f you look at transfer payments. Lack of food stamps and people receiving that is affecting them. Shoppers are trading down to shop elsewhere. There is so much choice. Gxers have forever 21 and amazon. They dont need target. Gerri i wonder degree some folks are making decision to be less consumerism they used to be. Do you see that trend. Im writing a book on that. As consumers were becoming less consumers of apparel and consumers of things. More consumers of technology. That is what is hitting most of these companies. Gerri frankly i think what is going on with technology is hurting car sales and long term even home sales. I agree. Gerri because the prices are so high. You upgrade every 20 minutes. Exactly. I was there yesterday, in fact. Youre right. Gerri im glad youre putting money back into the economy. My civic duty. Gerri thanks so much for being on the show. Thanks for being here on set. Thank you. Gerri time for a look at stories youre clicking on foxbusiness. Com. Herbalife is facing an investigation from the federal trade commission. The supplementmaker plans to cooperate fully and believes it necessary compliance with the law. Hedge fund manager William Ackman repeatedly attacked company calling it a pyramid scheme. The Company Behind candy crush believes it wan raise 640 million in ipo. King entertainment said in regulatory filing plans to sell 15 million shares at 24 each. Candy crush was the most downloaded app in 2013, beating facebook and google maps and youtube. Stock today with little to show for it. Investors are focused on chinas economy aptensions in the ukraine. President obama telling the Labor Department to increase overtime pay protections for millions of workers. Missing out salaried workers expected to work more than 40 hours per week with no over time pay. Current liver workers make 455 a week are exempt from overtime rules. To are some of the hot stories on foxbusiness. Com. Coming up later in the show, day three, day three of our users guide to taxes with a look at deductions you wont want to miss. Next we answer the question, how do you do that . Celebrities like lady gaga run charities that can sometimes get in the way of good health. How do you avoid that . Announcer where can an investor be a name and not a number . Scotade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer rankehighest in Investor Satisfaction with selfdirected services j. D. Power and associates. Gerri lady gagas charity is donating more to the lawyers than to sending to people actually in need. How to spot the red flags in 60 seconds. What is this place . Where are we . This is where we bring together the Fastest Internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. Tv and internet together like never before. Gerri celebrities and charities, not a great mix. Lady gagas fans are bringing in monster donations for the singers born this Way Foundation. Too bad most of the money went to the charity lawyers and their consultants. According to the charitys 2012 filing. Here how to spot red flags before giving money to celebrity charity, david kaplan, entertainment reporter. David, thanks for coming on the show. I was blown away by the numbers. Not even embraers a little bit how the people they want to help are not getting helped here. What do you make of this . This is a trend with celebritybacked charities. Another popular charity, the one charity by bono, that is huge. Everyone knows about it. In 2010 it came to light that they also had 15 million in revenue and only 1 of bono, he is perceived as great guy, were going to people in need. So this is actually, it doesnt surprise me. Gerri it happens all the time. Happens all the time. Gerri jane fonda, go on and on. Yeah, it is multiple. Especially with personality and celebrities who are vocal about the cause. Lady gaga, her foundation was empowerment. Getting youth involved gerri wait, wait