As the battle over Wall Street reform shifts venues — from Capitol Hill to federal agencies — industry lobbyists who oppose some new regulations outnumber consumer advocates 50 to 1, an analysis of lobbying disclosure data shows.
Although Congress passed and President Obama signed the Wall Street Reform and Consumer Protection Act last month, Congress did not iron out many of the law’s details. Lawmakers instead left that task up to regulators such as the Securities and Exchange Commission, FDIC and Federal Reserve.
Over the next two years, the regulators must conduct more than 60 studies and write some 250 rules. This process is well suited to seasoned industry lawyers and lobbyists who are skilled at analyzing the nitty gritty of proposed regulations.
Even before the battle moved to the regulatory agencies, “the corporate onslaught was breathtaking,” said Heather Booth, a top lobbyist for a coalition of consumer groups pushing for new restrictions on Wall Street.
Since 2009, more than 3,000 lobbyists for banks, Wall Street trade groups and financial firms have lobbied Congress and the regulators about financial reform, according to Senate lobbying data assembled by the Center for Public Integrity, a nonpartisan journalism organization.
Consumer advocates are largely limited to Booth’s coalition, Americans for Financial Reform, which tapped about 60 lobbyists from consumer groups such as the Center for Responsible Lending, Consumer Federation of America and major labor unions.
The U.S. Chamber of Commerce alone has 85 lobbyists fighting various aspects of financial reform.
Trade groups and law firms specializing in financial services are still hiring, lobbyists told the Huffington Post Investigative Fund. This year, megabank Goldman Sachs added a member to its team of persuaders, bringing the total to 45, some of whom once worked on Capitol Hill or at the SEC.
At first, lobbyists for Booth’s consumer coalition were less schooled or connected. The “rag-tag band,” as Booth called them, met every Friday for a year to learn about such arcane topics as derivatives. They had a budget of $1.4 million, a tiny fraction of what the industry so far has spent on lobbying.
Yet in the limelight of Capitol Hill, Booth was able to press her case with lawmakers over several months and eventually won key victories in the financial reform law, including the creation of an independent consumer financial protection bureau.
Her team faces greater challenges in the little-noticed labyrinth of the federal bureaucracy.The financial industry’s lopsided advantage is more pronounced there because federal bureaucrats rely on data, research and elaborate reports that typically only well-funded groups produce.
Once regulators propose a new rule lobbyists and lawyers spend weeks crafting response letters, which routinely exceed 30 pages.
Whereas in congressional lobbying, "you have a minute or 30 seconds to make your case, with the regulatory process you have pages and pages,” said Scott Talbott, a senior vice president and top lobbyist for the Financial Services Roundtable, a trade group that represents some of the nation’s largest financial services companies. “The lawyers are enjoying this; it sounds sort of morbid but this is a lot of work for the lawyers.”
Booth isn't slowing down either. Her team is meeting with Obama administration officials this week to discuss the next steps for financial reform.
Still, some policy experts worry that the industry’s competitive advantage drowns out consumers’ viewpoints.
Take, for instance, recent rules that international bank regulators proposed to address a main cause of the financial crisis — a banking industry that didn’t set aside enough for a rainy day. During a four-month comment period, the Basel Committee on Banking Supervision received 273 letters on its proposal to increase capital requirements for banks. Most all comments came from an array of industry groups and banks, while only 27 came from consumers.
“The industry reps are highly organized and well funded,” said Gary J. Edles, a former senior official at regulatory agencies overseeing aviation, the courts and the nuclear industry.
“If my mother-in-law has a serious problem over something, it’s kind of tough for her to marshal all the data to demonstrate that this is a nationwide problem,” said Edles, now a professor of administrative law at American University. “It is far less difficult if the Chamber of Commerce of the United States thinks it is a big problem.”