Wall Street and the financial industry are intensifying their efforts to influence how the Dodd-Frank financial reform act will be implemented, spending more on lobbyists in the first quarter of this year than last year when Congress was the writing the legislation, according to a Wall Street Journal article by Victoria McGrane entitled “Wall Street, Banks Press to Shape Dodd-Frank Rules,” citing the WSJ’s review of recently released lobbying disclosure documents.
The documents confirm that financial-industry lobbyists are cajoling regulators, who are charged with writing hundreds of rules to carry out Dodd-Frank, and pressing legislators to repeal certain provisions, including new limits on debit-card fees.
In addition, the Financial Industry Regulatory Authority (FINRA) has joined the party. FINRA is the securities industry’s “self-regulatory organization” charged with policing its members “sales practice violations.” FINRA spent more than $300,000 in the first quarter of 2011 lobbying Congress, according to an InvestmentNews article by Dan Jamieson entitled “Big rise in Finra lobbying $$$.” FINRA, which wants to become the self-regulator for investment advisors (as well as broker-dealers), paid $50,000 in 1Q2011 to former House Financial Services Committee Chairman Michael Oxley (co-author of Sarbanes-Oxley), who is now registered as a FINRA lobbyist, according to the article.
Meanwhile, FINRA’s Wall Street members are especially interested in shaping rules for the nearly $583 trillion derivatives market, restrictions on the size and activities of the largest banks, and mortgage-finance issues related to foreclosures and revamping Fannie Mae and Freddie Mac, which now are under federal control.
The documents further show that the financial firms and trade associations that spent the most in 2010 collectively spent $27 million in the three months ending March 31, which is a 2.7% increase from the $26.3 million spent in the comparable period in 2010.
The industry’s lobbying expenditures for first-quarter is its second-highest ever, according to the article, citing an analysis of data provided by the Center for Responsive Politics. The 26 biggest spenders spent 27.3 million between April and June last year, when Dodd-Frank activity on Capitol Hill was most intense.
Wells Fargo spent more on lobbying than any other financial firm, surpassing J. P. Morgan Chase, which spent the most in 2010. Wells Fargo’s lobbying expenditures nearly doubled to $1.9 million during the first quarter from $1 million in the same period a year ago. A Wells Fargo spokeswoman declined to say that people should just shut up and get off their back, that this is a participatory democracy, political spending is the equivalent of political speech, and more money means more influence.
Disclosure documents reportedly show the financial industry has had dozens of meetings with officials at the Federal Reserve, the Treasury Department, the Securities and Exchange Commission, the Commodity Futures Trading Commission and others.
“There’s been a tremendous amount of regulatory activity,” Floyd Stoner, chief lobbyist for the American Bankers Association, was quoted as saying, adding that Dodd-Frank would generate at least 5,000 pages of regulations, and the ABA must ensure the new rules work for its members and the economy.
“Implementation, implementation, implementation,” Scott Talbott, top lobbyist for the Financial Services Roundtable, was quoted as saying, explaining the spending. The Roundtable, which spent about $2.5 million in the quarter, represents the largest U.S. financial firms.
The Community Financial Services Association, which represents the payday-lending industry, spent $590,000 during the first quarter, according to the article, trying to strangle the fledgling Consumer Financial Protection Bureau, which, under Dodd-Frank, would have broad powers to regulate large payday lenders. Republicans have introduced several bills to weaken the Consumer Financial Protection Bureau, according to the article.
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