Wells Fargo, JPMorgan, Goldman Sachs Fight Consumer-Protection Law
The country’s biggest banks spilled record amounts of cash on D.C.-based lobbyists in 2010, and it’s no wonder why. Congress was debating Dodd-Frank, the sprawling 2,319-page consumer-protection act that ended up dictating everything from how much a bank can bet on high-risk ventures to the maximum fee it can charge retailers on debit-card transactions. But new numbers just released by the Center for Responsive Politics show that the big banks spent even more on lobbyists in 2011 in their fight to water down Dodd-Frank.
The country’s commercial banks—think JPMorgan Chase, Bank of America, and Wells Fargo—collectively spent $61.5 million on lobbying efforts in 2011, up from $56.6 million on lobbying efforts in 2010. The country’s biggest investment houses (Goldman Sachs, Morgan Stanley, and private-equity firms like Blackstone Group) spent even more than the banks, writing checks for $98 million in 2011. All told, the commercial banks and investment houses had 1,200 lobbyists in their employ last year.
And these figures don’t include donations to political campaigns, or the many millions of dollars the banks contribute to the U.S. Chamber of Commerce, the Business Roundtable, and other intermediaries that do their bidding on Capitol Hill. Those groups, by law, must report how much they spend on lobbying each year: the U.S. Chamber, for instance, spent more than $66 million in 2011 lobbying on a wide range of business-related issues. But they don’t have to reveal the source of their funding. So much for the banks pleading poverty when they claim they have no choice but to hit customers with dubious new fees on everything from debit cards to checking accounts.
Leading the way among individual banks that increased their spending on lobbyists was Wells Fargo, which shelled out $7.8 million last year—a 44 percent bump over 2010. JPMorgan Chase spent $7.6 million on lobbyists last year—slightly more than its record-setting $7.4 million in 2010.
Other big spenders in 2011: Citigroup ($5 million), Goldman Sachs ($4.4 million), and Blackstone ($5 million). In contrast, Bain Capital, Mitt Romney’s old firm, spent a relatively paltry $560,000 on lobbyists in 2011.
As if that were not enough lobbying firepower for a single industry, there’s also the outlays on lobbyists by various groups representing the country’s big financial firms. The American Bankers Association, for instance, spent $8.6 million on lobbyists last year (15 percent more than in 2010). The Financial Services Roundtable, a trade association representing most of the country’s largest financial firms, spent $7.7 million on lobbyists last year—a slight bump over 2010.
The reason for the increase in spending, says Scott Talbott, the Financial Services Roundtable’s chief lobbyist, is simple: President Obama’s signing of Dodd-Frank into law in July 2010 merely represented “halftime” in the debate over financial reform. These days the banks and groups like his, Talbott says, must fight a two-front war that has them trying to persuade elected officials to rethink decisions they made in 2010, while simultaneously influencing the regulators whose job it is to implement Dodd-Frank.
So far their efforts seem to be paying off. By Talbott’s count, Dodd-Frank spawned nearly 300 individual regulations, and yet, 18 months after its passage, only a fraction of its provisions have actually taken effect—maybe 25 percent, according to the law firm Davis Polk, which publishes a monthly report tracking Dodd-Frank’s slow progress through the rule-making process.