The Billion-Dollar Bank Heist-Newsweek

[Ichingcarpenter]

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The pomp and ceremony may have been premature. Ever since the law’s passage, those same “powerful interest groups” who opposed Dodd-Frank have been trying to prevent it from taking effect. As written, the law delayed implementation of most of its new rules for at least 12 months so regulators would have time to hammer out the finer points of the 2,319-page bill. But that delay has also provided an opening to banks and other financial institutions seeking to defang the law. “Just because we lost that round,” says Cam Fine, president of the Independent Community Bankers of America, which spent $1 million in the first three months of this year to lobby against implementation, “doesn’t mean we just give up. Congress changes its mind all the time.”

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The story of this evisceration is largely one of money—the tens of billions of dollars in profits that banks and other financial institutions stand to lose if Dodd-Frank is implemented, and the astonishing sums they’re spending to squash it. The industry paid lobbyists $1.3 billion in 2009 and through the first three months of 2010, according to the Center for Public Integrity, which added up the spending by the 850 businesses and trade groups fighting financial reform. Many of these same businesses are now spending as much money, if not more, to lobby for curbs on the new law.
The Financial Services Roundtable, for instance, is on pace to spend $10 million on lobbying in 2011, based on its spending the first few months of this year. That’s well above the $7.5 million that the trade association, which represents most of the country’s largest financial firms, spent in 2010. The American Bankers Association is expected to beat its $7.5 million spent last year, based on first-quarter-2011 numbers. JPMorgan Chase and Citigroup are on track to match last year’s lobbying spending: $7 million and $5 million, respectively. Wells Fargo, which spent $5 million last year, spent $1.9 million in just the first quarter of this year.


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Roughly 3,000 lobbyists were engaged in the fight over Dodd-Frank, according to the Center for Public Integrity—more than five lobbyists for every member of Congress. But as popular anger at the banks raged, Dodd-Frank only grew stronger. The consumer-protection agency, for instance, was initially conceived as a five-person commission with limited rule-making authority. In the end, Congress created a strong, independent agency to be run by a director with broad powers.

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“Everyone is hiring,” says Talbott. One such firm is Clark Lytle & Geduldig, whose client list has included Talbott’s group and also Goldman Sachs, MasterCard, and the American Banking Association. Clark Lytle is relatively Lilliputian, but it brought in $1.9 million in lobbying fees last year. This year it’s set to book more than $3.3 million.

http://www.newsweek.com/content/newsweek/2011/07/10/the-billion-dollar-bank-heist.html

Not bad for a Newspeak article for the ignorant masses, but a good place for them to start.

[Ruby the Liberal]

1. Thanks! I will have to buy a copy for my mom

as I have been telling her about Elizabeth Warren for years now. This is a good summary.

I didn't realize that they were opening the CFPB next week! Wish me luck - I just finished applying for a position there. I was considering this as a long term goal for 2012 but jumped on it this morning.

In case anyone else is interested: http://www.consumerfinance.gov/jobs

:hi: