Wall Street Attack: Big Banks Shower Congress With Money to Water Down Reform
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“Less than two weeks after the Credit Suisse visit, 26 New Democrats signed a letter to regulators noting that ‘millions of public school teachers, police officers and private employees depend on liquid markets and low transaction costs’ to retire with ‘dignity and ease.’”
In other words, fellow members and regulators, lighten up on the Volcker Rule! A thick wallet helps, of course — lobbyists for the financial sector spent nearly half a billion dollars last year. And the congressional newspaper The Hill reports, “Members of Congress pressuring regulators to go easy on the ‘Volcker Rule’ received roughly four times as much on average in contributions from the financial industry than lawmakers pushing for a stronger rule since the 2010 election cycle, according to Public Citizen, a left-leaning group advocating for strict implementation.
“When it is all added up, opponents of a tough Volcker Rule received over 35 times as much from the financial industry — $66.7 million — than advocates for a strong stance, who received $1.9 million.”
All of which makes it darkly amusing to read in the April 4 edition of the financial newspaper The American Banker that, in the words of Roger Beverage, president and CEO of the Oklahoma Bankers Association, “Congress isn’t afraid of bankers. They don’t think we’ll do anything to kick them out of office. We are trying to change that perception.”
Which is why Beverage and his colleague are creating the industry’s first super PAC. They’re calling it – we’re not making this up – “ Friends of Traditional Banking,” a smokescreen of a sobriquet if we ever heard one, vaguely reminiscent of the Chicago mobsters in Billy Wilder’s Some Like It Hot who dub themselves “Friends of Italian Opera.”
Matt Packard, the super PAC’s chairman, told The American Banker, “If someone says I am going to give your opponent $5,000 or $10,000, you might say, ‘Yea, okay.’ But if you say the bankers are going to put in $100,000 or $500,000 or $1 million into your opponent’s campaign, that starts to draw some attention.” Don Childears, president and CEO of the Colorado Bankers Association chimed in, “It would be nice to sit on the sidelines or sit on our hands and say, ‘Oh we don’t get involved in that stuff,’ but that just means you get run over. We need to get more deeply involved as an industry in supporting friends and trying to replace enemies.”
All of which demonstrates, as per Bloomberg News, “that four years after Wall Street helped cause the worst economic downturn since the Great Depression and prompted a $700 billion taxpayer bailout, its lobby is regaining its power to blunt or deflect efforts to rein in the banks.”
Nonetheless, just last week, The Wall Street Journal reported on how a movement to challenge big banks at the local level has gained momentum around the country. Activists want to restructure Wall Street from the bottom up. As a result, the Los Angeles City Council is considering an ordinance that would gather foreclosure and other data on banks that do business with the city. Officials in Kansas City, Mo., passed a resolution directing the city manager to do business only with banks that are responsive to the community. And here in New York City, legislation is pending to require banks to reinvest in local neighborhoods if they want to hold city deposits. Similar actions are underway in other cities.
They’re turning up the heat. You can, too.