What a difference a day makes.
On the heels of President Obama's private confab with Wall Street executives, the Wall Street Journal reports that the meeting's attendees admitted to the "disconnect" between their words to the President and the work of their lobbyists.
Here's the WSJ:
Chief executives of the largest U.S. banks acknowledged Monday the "disconnect" between their expressed support for re-regulating financial markets and the work of their lobbyists to weaken any new rules.The executives pledged during a White House meeting with President Barack Obama that they would personally intervene on behalf of the legislation.
Some of the CEOs said their lobbyists had taken stronger stands than they would have wanted, an assertion met with raised eyebrows on Capitol Hill. House Financial Services Committee Chairman Barney Frank (D, Mass.), chief architect of financial-overhaul legislation in that chamber, said in an interview he was "highly skeptical."
Are you a little skeptical? You're probably not alone. It's still unclear that this public admission by bank CEOs that they have lobbied against necessary reform is anything more than a publicity stunt. But, ostensibly at least, it's a stunning reversal by industry execs who have led a lavishly-funded lobbying effort to shut down reform.
The bank's influence on Capitol Hill, as Bloomberg notes today, may be diminished as populist anger rises over the industry's quick return to profitability. But not by much.
As we reported earlier this month, Wall Street has spent more than $300 million this year trying to water-down financial reform. And we also noted that, Wall Street's campaign contributions have flooded into the coffers of key lawmakers in the House: "Members of the House Financial Services Committee have received, on average, $138,422 in campaign contributions from the financial services industry so far this year -- more than twice what non-committee members have taken in."
What will the banks have to give up the financial reform package that actually does pass? There are a few concessions, but many more dodged bullets for the industry.
Bloomberg notes this morning that Wall Street will likely have to agree to a some form of Consumer Protection Agency, banks may have to boost the fees they pay to the Federal Deposit Insurance Corporation, and contribute to a $150 billion emergency rescue fund. Here's Bloomberg: "...the firms that helped precipitate the worst financial crisis in 70 years have so far sidestepped proposals that would have split investment and commercial banking, capped pay or seriously hurt their ability to make money." (Emphasis ours)
So, if you're counting on a newly restrained and fair-minded financial services lobby, consider their record. If President Obama described highly-paid bank execs as being like 'overpaid pitchers' who haven't won the World Series, keep in mind that in the financial regulation game they're nearly unbeaten. Here's how Bloomberg described the financial services lobby last month:
Following the 1999 decision to overturn the Glass-Steagall Act that separated commercial banks from securities firms, bank lobbyists have been able to shoot down virtually any proposed rule they perceived as unfavorable to their industry, lobbyists and politicians say.