UPDATE (9/10) TO ITEM 2 OF THIS POST: Monday’s NY Times story “Lawmakers Push to Increase White House Oversight of Financial Regulators.” Monday’s detailed analysis “One of the Worst Ideas from Congress In Decades” of the proposed bill, S 3468, from the Wall Street reformers at Better Markets: Excerpt: “In the bill, “rule” is defined to include almost everything an agency does both internally and externally. (The definition is … available here.) Thus, the Executive Branch will not only be heavily involved in agency rulemakings, but will be deeply involved in almost everything an agency does.”
ORIGINAL POST: ITEM 1: The American Bankers Association’s latest effort to kill financial reform is to raise millions of dollars through a new dark money group (like a secret SuperPAC) disguised as a purported social welfare organization to avoid disclosure laws but primarily designed to elect Senators who agree with their Bizarro-World narrative that (1) the financial collapse of 2008 was not their fault and (2) financial reform has gone too far. On Thursday, according to its website, the ABA board voted to establish “Financial Education and Advocacy Initiative Inc. — a new nonprofit organization that will help strengthen the banking industry’s voice in Washington. “This new organization will give us more firepower in our battle to protect the banking franchise,” said ABA President and CEO Frank Keating.” (The rest of the story is hidden behind a members’ only wall.)
In a story “Banker Plan Would Fund Super-PACs to Sway Senate Races” this week, Bloomberg’s Robert Schmidt and Phil Mattingly had more:
“The financial industry has so far kept a low profile in the 2012 campaign, in part because banks remain targets for both political parties for their role in the 2008 financial crisis. While Wall Street banks and their employees have given millions to presidential and congressional campaigns, some of the largest banks have stayed away from overt political activities like funding the parties’ conventions.”
Our colleagues at Public Citizen have already challenged the ABA’s proposal to use a dark money “Social Welfare” corporate designation with an IRS complaint:
“ABA staff defended the organization’s choice of using nonprofit tax status to conduct its planned undisclosed campaign intervention activity by asserting that the group would spend 51 percent of its funds on public issue advocacy and 49 percent on electioneering, thus attempting to justify the group’s primary purpose as a social welfare organization rather than a political organization – despite the fact that such “other” activities are peripheral to the group’s stated primary objective: campaign intervention.”
More on this banker effort from the PIRG-backed Americans for Financial Reform. Our latest U.S. PIRG report on dark money groups and SuperPACs (August 2012). More from U.S. PIRG Democracy Advocate Blair Bowie on a SuperPAC formed by some bankers earlier this year.
ITEM 2: As reported by colleagues at OMBWatch, industry opponents of financial reform joined by other powerful special interests are trying to sneak controversial legislation, S 3468, the Independent Agency Regulatory Analysis Act, “under the radar” and through the Senate Homeland Security and Government Affairs Committee this month. A leading administrative law professor, Rena Steinzor, points out that one of the bill’s lead sponsors, Senator Susan Collins (ME) was against the idea before she was for it. The bill would place all independent agencies — which are independent for a reason and range from the Fed, SEC, CFPB and other bank regulators to the CPSC and FTC — under the highly-politicized White House Office of Information and Regulatory Affairs (OIRA). The goal? Paralyze their efforts to enact fair marketplace protections. Watch our home page for a longer entry from my U.S. PIRG colleague, Public Health Advocate Nasima Hossain, on this.
ITEM 3: In other news, the California Reinvestment Coalition has a new report charging that — despite a return to high profits — the state’s biggest banks are using outrageous bank fee increases to push households out of mainstream banking with the intent of capturing them with even more profitable prepaid card products that are much less advantageous to consumers. A separate new study from The Pew Center on the States explains that “Reloadable Prepaid Cards Risky Option for Consumers Compared to Checking Accounts.“
And that’s Friday’s Financial Follies. Remember, in Washington, we don’t have to make this stuff up.
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.