The debate on financial regulatory reform is heating up in Washington. Democrats are hoping to pass sweeping reforms of Wall Street on the heels of successfully passing health care reform. But there is significant opposition to the bill as it stands today. Over the coming months, we will take apart provisions of the bill and break it down. For example, we’ll look at the proposal for a Consumer Financial Protection Agency, new rules for trading derivatives and provisions for companies that are deemed “too big to fail.”
As I was researching the bill, I came across an interesting New York Times article about the pro-business lobby in Washington. It was a fascinating read on the money being funneled into Washington by the financial services industry as it steps up its lobbying efforts on the Hill. The article cited the Center for Responsive Politics, a non-partisan organization that tracks political lobbying and contributions. I went to the website to find out more about the financial industry and how it operates in Washington. Below are a few facts from the Center that shed light on just how powerful the financial industry is and some recent trends about who the industry gives money to:
- In the last decade, the financial services industry, which includes commercial and investment banks, credit unions, the real estate sector and others, has spent more on lobbying Washington than any other industry — a total of more than $4 billion. (The next biggest lobbying group was the health care industry.)
- In 2009, in the midst of a recession and the same year that the Obama administration proposed a financial regulatory reform bill, the financial services industry spent more on lobbying that year than any other year.
- More than 400 individual companies reported lobbying on the House version of the financial regulatory reform bill, including Citigroup, Visa, Southwest Airlines, and Kraft foods.
- Goldman Sachs, recently sued for securities fraud by the SEC, has reported lobbying on the financial regulatory reform bill more than any other company.
- Historically, the financial services industry has contributed more to the Republican party, but in the current election cycle, Democrats have received a higher percentage of contributions than Republicans. Charles Schumer, a Democrat from New York, received the most contributions from the financial services industry in the Senate.