The House passed the badly needed Credit Card Holders Bill of Rights yesterday, but they passed cramdown, too. We successfully fought off the efforts of the Mortgage Bankers Association, the American Bankers Association and other lobbyists to work through Ellen Tauscher and the New Democrats to tank it, but that just means the banks shifted their focus to the Senate, where they were wholly successful. And they plan to do the same thing for the Credit Card Holders Bill of Rights.
Next up, after mortgages, credit cards. Next week, the same bankers get to come in and see how much might and power they have in the Senate when it comes to credit card reform. And the question we’re going to face, is whether or not this Senate is going to listen to the families facing foreclosure, the families facing job loss and bills they can’t pay, or whether they’re going to listen to the American Bankers Association, which has folded its arms and walked out of the room. Well, I hope that we have the courage to stand up to them.
Well, I’d be pleased as punch if the Senate Democrats did stand up to the banks, but I seriously doubt that’s gonna happen. One out of eight people in America is going to lose their homes. They could have moved to stop that, but they didn’t. That’s the lobbying power of the FIRE industry.
According to Center for Responsive Politics Executive Director Sheila Krumholz:
"Even though some financial, insurance and real estate interests pulled back last year, they still managed to spend more than $450 million as a sector to lobby policymakers. That can buy a lot of influence, and it’s a fraction of what the financial sector is reaping in return through the government’s bailout program," Krumholz said.
Other financial institutions were pushing hard for money from the government while putting less money into lobbying itself. Citigroup decreased spending by 10 percent between 2007 and 2008, from $8.5 million to $7.7 million; Wells Fargo spent 37 percent less, from $1.9 million to $1.2 million, and mortgage lender Countrywide Financial put in 47 percent less, from $1.3 million to $706,000. Instead of hiring lobbyists, many financial institutions seem to have been relying on their industry representatives to sway Congress for them.
Business and real estate associations and coalitions were among the organizations that ramped up their lobbying expenditures the most last year. The National Association of Realtors increased spending by 25 percent, from $13.9 million to $17.3 million. The American Bankers Association spent $9.1 million in 2008, a 47 percent increase from 2007. Other industry groups to spend more in 2008 include the Private Equity Council, the Mortgage Bankers Association of America and the Financial Services Roundtable. The U.S. Chamber of Commerce remained the #1 spender on lobbying in 2008, spending nearly $92 million–more than $350,000 every weekday, and a 73 percent increase over 2007–to advocate for its members’ interests. Pro-business associations as a whole increased their lobbying 47 percent between ’07 and ’08.
"Entire industries are sinking right now," Krumholz said, "so companies seem to be leaning on the associations that represent them in Washington to push for rising-tide policies that will lift all their boats. In times like these, the companies whose dues support these industry groups are expecting results."
Let’s just be clear on this: money that went to banks through TARP was used to lobby these Senators. TARP recipients simply hid behind lobbying organizations like the MBA and the ABA who did the dirty work of screwing mortgage holders out of badly needed relief to the benefit of the banks, once again.