An FDL review of lobbying reports for the first quarter of 2009 reveals that banks receiving federal bailout funds spent over $13 million lobbying against consumer interests and for the financial benefit of their executives.
In the first quarter of 2009, banks such as Bank of America, JP Morgan and Wells Fargo that received billions in taxpayer assistance focused their lobbying efforts on defeating attempts to regulate credit card practices, specifically caps on interest rates. They also lobbied extensively to prevent legislation that would have allowed bankruptcy judges to write down mortgage principle ("cramdown"), which FDL examined yesterday. At the same time, they lobbied on behalf of their executives to be paid without limit.
The efforts so far have been successful. Despite the fact that "cramdown" could have stopped 20% of the estimated looming 8 million foreclosures at no cost to the taxpayers, it was defeated in the Senate. When the Credit Card Bill of Rights was voted on in the House last week, Barney Frank and Nancy Pelosi did not permit the Rules Committee to allow any of the amendments on to the floor which would have capped credit card interest rates. And despite being passed by the House last month, the Senate has not taken up either the clawback bill for bonuses paid to TARP recipients or the bill that would have tied executive compensation to a company’s profitability.
| Bailout Recipient | Lobbied | Spent on Lobbying 1Q | Bailout Funds Received |
| American Express (PDF) | Cramdown, Credit Card, Exec Comp | $875,000 | $3.4 billion |
| Bank of America (PDF) | Cramdown, Credit Card, Exec Comp | $750,000 | $52.5 billion 4.5 billion |
| Bank of NY Mellon (PDF)* | Credit Card, no response | $497,000 | $3 billion |
| Barclays PLC & US Affiliates (PDF)* | Cramdown, Credit Card | $1,435,916 | $7.0 billion |
| Capital One Financial Corp (PDF) | Cramdown, Credit Card, Exec Comp | $469,000 | $3.6 billion |
| Citigroup | Credit Card, Exec Comp | $1,680,000 | $50 billion |
| Credit Suisse (PDF)* | Cramdown | $580,000 | $.4 billion |
| Deutsche Bank* | Cramdown | $220,000 | $6.4 billion |
| Discover Financial Services (PDF) | Cramdown, Credit Card | $257,500 | $1.2 billion |
| Fifth Third Bancorp (PDF) | Cramdown, Credit Card | $31,000 | $3.4 billion |
| GMAC (PDF) | Cramdown | $410,000 | $5 billion |
| Goldman Sachs Group, Inc. (PDF) | Cramdown, Credit Card, Exec Comp | $1,105,000 | $10 billion $12.9 billion |
| HSBC GR-Corp (PDF)* | Cramdown, Credit Card | $1,176,573 | $3.3 billion |
| ING North America (PDF)* | Cramdown | $720,000 | $1.5 billion |
| JP Morgan (PDF) | Cramdown, Credit Card, Exec Comp | $1,386,000 | $25 billion |
| Morgan Stanley & Co (PDF) | Cramdown, Exec Comp | $645,000 | $10 billion $1 billion |
| PNC Bank (PDF) | Cramdown, Credit Card | $150,000 | $7.6 billion |
| UBS Americas, Inc (PDF)* | Cramdown | $70,000 | $1.7 bilion |
| U.S. Bancorp (PDF) | Cramdown, Credit Card, Exec Comp | $255,000 | $6.6 billion |
| Wells Fargo & Company (PDF) | Cramdown, Credit Card, Exec Comp | $810,000 | $25 billion |
| TOTAL | $13,522,989 | $220 billion |
Companies that received money as AIG counterparties are designated with an asterisk (*). Since they were not direct TARP recipients and thus not subject to executive compensation limits, tellingly did not lobby on the issue.
A new study by the Center for Public Integrity reveals that Wells Fargo, GMAC, HSBC, JP Morgan Chase, Citigroup, Barclays and Credit Suisse were among the top 25 subprime lenders at the peak of the subprime market.
Although AIG made much of the fact that they did no lobbying in the first quarter, they are members of the American Council of Life Insurers and AIG’s Rodney O Martin sits on the board (PDF). ACLI spent $2,487,075 lobbying in 1Q 2009, and were a part of the successful effort to kill cramdown.
The Senate takes up the Credit Card Bill of Rights this week. Bernie Sanders wants to strengthen it in the Senate and has introduced legislation to cap credit card interest rates at 15%.
Senator Charles Schumer says he is "optomistic" about the fate of credit card reform:
"Bankruptcy reform, important as it was, was sort of esoteric. If you went into O’Halloran’s Pub, the fellas aren’t saying to you, ‘What’s going on with bankruptcy reform?’" says Schumer in his best guy-on-a-bar-stool voice. "But they might say, ‘What are you doing about my credit cards?’ The average person feels the second much more than the first, even though both are important."
If popular sentiment will be the ultimate arbiter of whether credit card interest rates will be capped, it should be smooth sailing for Sanders’ bill. It remains to be seen, however, if the $13 million spent on lobbying efforts by bailout recipients will have more sway.
Related posts:
- Republicans Move to Permit Credit Card Companies to Jack Up Their Rates for the Next Several Weeks
- Funds Spent This Year by Health Care Lobby Would Have Insured All Who Died from Lack of Insurance
- The Next Big Taxpayer Bailout? IMF Could Get Hundreds of Billions for European Banks
- Bank Bailout: When a Bonus Exceeds Earnings, How is It Not Fraud?
- Pay to Play: $1.4 Million a Day Buys a Lot of Votes
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F”ked and we didn’t even get kissed. . .what else is new?
I’m sorry that foreclosure reform was not passed but I really didn’t see a big push for it.
Take the money and run.
That’s $16,268 and change per $1 spent.
This heres a story about billy joe and bobbie sue
Two young lovers with nothin better to do
Than sit around the house, get high, and watch the tube
And here is what happened when they decided to cut loose
They headed down to, ooh, old el paso
Thats where they ran into a great big hassle
Billy joe shot a man while robbing his castle
Bobbie sue took the money and run
We don’t have to take to the streets. We just have to quit paying our credit card bills. Works for me. I haven’t paid any since August. No blood. Very small turnip. It is unAmerican to pay your credit card bills. The money should go into the real economy. We should also boycott any bank that enhances the loss of American jobs.
What will the peoples’ representatives N. Pelosi and B. Frank do now that they’ve been exposed as beholden corporate tools?
Most people would be embarrassed. I suppose they could lie like Jane Harman (or any Republican) and say that the opposite is true.
If anyone who declines to pay his credit card debt owns any property other than his home, they will sue him and win. Then he would owe interest, penalties, perhaps their legal expenses and court costs.
For a person in these circumstances, it would not be a good idea to stop the merry-go-round.
The Bush administration has proved without a dought that pols are free to do as they please the citizens be damned. There are no rules or laws obeyed by our leaders that refuse them or any ethical behaviour. The precedent set by Bush that our criminal leaders cannot be touched no matter how wrong they are or crimes they commit is now a founded part of our Constitution and only the public can attempt to stop them by force..and no one has the guts to attempt that so we just live with it..forever.
OTOH, if one is “judgement proof”, by virtue of the fact that the only property one owns is his homestead and an old jalopy, then one may stop paying and suffer little consequence.
I have nothing left. I don’t have the ability to pay. When they threaten to take me to court I say fine. Go ahead. Then I tell them my personal situation and they back down. So, it is easy for me to take this stand. But I am not so sure I wouldn’t be doing it anyway. When do we say enough? They have been killing us with neglect and abuse for years. When does the push back start to happen?
It puts the banks in an interesting situation. Would they want to ‘make an example’ of someone to ‘encourage the others’? It’s what the international banking establishment used to do to countries threatening a sovereign default. We know how well that all worked out. On the other hand, it could backfire on them as a PR disaster. I guess making these tough decisions is why you get paid dozens of millions of dollars to be a bank CEO. To screw or not to screw. That is the question.
I make exactly enough to make my car payments, and my living expenses with a bare bit extra. If they want to try and take that single asset, which is the car i actually need to keep my job (as the buses don’t go anywhere near my workplace) they can try. I don’t even own a home, i’ve been in apartment for some years. I don’t need a house yet, especially since my wages are such a pittance anyway.
I’ve got a very dumb question.
Exactly how did they spend $13 million in two months or less? I would love to see the expense report.
And do we have a right to see where our money has been spent?
Hah!
And what was the first headline on Yahoo! when I booted up this morning?
B of A says it needs $35 BILLION in NEW CAPITAL.
Thanks for this post, Jane. And for your tireless work in following the money.
FunnyDiva
As (or if) we work out of this mess I would like to see tax reform to the effect that any ammounts paid to these money gluttons in excess of what the president makes would not be a tax deduction. At the present time if an employee of a bank makes $1 million the corporation expenses it all and at the tax rate of 39% is therefore only costing them %610K.
Well done Jane, this is some seriously good reporting.
Nice work, Jane. Can you give some background on the context and methodology of this research? For example, where do lobbying reports come from?
(Proofertorial note: Fix the subject-verb agreement in the first sentence.)
DCblogger, you took the words right outta my keyboard.
Jane, this is why I read FDL. When others blather about if the press is more deferential to Obama than Bush, I ask, Where’s the beef? Right here at FDL.
Money well spent by the banksters. Playing the American public for chumps by their bought and sold representatives, Congress.
I like Barney Frank, but he’s either out of his depth or in the banks’ clutches. He needs to get off the teevee & go to work for the bank consumer & taxpayer. As for Chris Dodd, it’s time for him to retire & let’s hope the voters of Connecticut agree (tho I’m afraid to ask who’s up next to chair the Senate banking committee — Ben Nelson or Evan Bayh???).
The Constant Weader at http://www.RealityChex.com
Better yet ~ don’t even HAVE credit cards. I know it is unpopular to say this but the truth is that it is a person’s own fault if they allow these crediters to get them to think they have to live beyond their means.
I have never had a credit card and I am in my 50’s. Guess what? Even working McJobs all my life, my kids ate, they got clothes and they lived through the horror of not wearing the most expensive items (unless I could find them at a thrift store. SCORE!).
Here is how I did it: I S-A-V-E-D if I had to have something. Ever heard of that word? I walked when I could not afford to fix my car or I took the bus or got rides to work with co-workers (giving them gas/travel/parking money of course). I learned how to fix things when they were broken instead of throwing them away and buying new. I can darn a sock, repair a torn seam by hand, change the oil on my car, fix a delicious and nutritious dinner for 5 in a fireplace, find something I REALLY may need and cannot afford (like canning jars for food I get on sale or for free or a dehydrator which I use to dry fruits and meats in case we have no electricity, etc). I know how to glean in the fall, and to buy the nice warm coats in the heat of July or nice summer clothes in the dead of winter when they go fo pennies on the dollar.
I used to wish I were like my friends with their new cars, their expensive clothes, and their kids’ new toys, because I thought at least they had creditm which I would never have. Now they are crying the blues because not only don’t they have credit, they are losing that nice home they had and they are now in the same place I have been for all my adult life. They have *no* idea how to live without those cursed cards, because well, they never had to. It isn’t as if nobody knew that these credit cards cost to use them. why is this such a shock that, now that people think they have to have them, these people are going to use that ignorance all they can to line their pockets and take other’s hard earned money?
If they had the money I wish I could at least reap a small living teaching these people how to live without credit or any way to have things they can’t afford and how to find the necessities for free or for little if they need them . But they could not afford to pay me even a modest fee now, I would be an extravagance. So I tell them how I do it for free. I do not laugh in their face, but still a little voice is saying to me as I try to sympathize, “Uhhhh, didn’t you ever listen to your grandparents who lived through the Depression and what they had to do? Didn’t you know you were paying more money for things you didn’t even need and for things you did need too? Didn’t you know you were going into debt for the rest of your life living the high life when you could not afford it? After all the stuff the past couple generations went through to get all those useless “things,” now they are no better off than I am. What does that say???? ”
My 2 cents
Cat In Seattle
Credit card companies
capriciouslymaliciously change payment dates and the amount of time you have to get the payment in.They change the rate of interest without telling you in a way that means anything. They employ a rip-off-the-customer business model. They are villains.
There are certainly many people who have lived beyond their means. But wages have been stagnant for decades and many use those cards for health care, shelter, food. When faced with buying medication on credit or going without there is one obvious choice. You need to do some research about how the poorer people live in this country. And the population of the poor is growing rapidly.
Here is how I did it: I S-A-V-E-D if I had to have something. Ever heard of that word?
hey, thanks for stopping by and [edited]
take a hike, [ModNote: Just a friendly reminder, personal insults and/or attacking fellow commenters is not allowed here at the Lake, thank you.]
maybe we should start a “campaign contributions web site” where the public could make a donation to their preferred causes.
If our congress critters have to be bought off, lets do some buying (in public) ourselves.
And maybe we should claw back the congress critters benefits & salaries with every donation.
Have you ever heard of the “homestead” exemption which exists in most if not all states? It exempts a certain amount of the equity in the home from attachment. It is unlikely any credit card company is going to sue on a unsecured credit card bill, unless the balance is it is very large. I would not worry too much about getting sued by a credit card company. They routinely write those debts off.
Mntleo never had any health problems. Never any need for emergency funding. Never had to rent a car or a chainsaw.
Amazing. An awesome bootstraps rugged individual in this modern world.
Yes slide, I have heard of the homestead exemption. I mentioned it in my comment. Any property other than one’s homestead is at risk to creditors. You are correct.
I have a no-interest loan I got recently from BofA. They have been pretty good, and I needed to borrow the money. However, I noticed on my last bill there is something about the interest being 44.81%. . .so I called to find out what that is about. I am not being charged anything, the person I talked to said the 44.81% is the AVERAGE amount of various possible things I could be charged. . .made No Sense to me. But I can’t help but wonder if I am paying zero percent and 44.81 is the average of some things unknown, what can they be using to get that average? Wow. These guys are some kind of operators.
Yes.
BofA just got taken to court for trying to foreclose on a mortgage, they couldn’t prove they had. They couldn’t find the documents.
Don’t trust BofA as far as your great grandmother could throw them.
Jane, GREAT SCOOP!
Thank you.
No interest charges. What about transaction fees? A transaction fee, say 3 percent or so, could reflect a 44 percent APR.
Again — FDL doing real analysis that you won’t see on the traditional news.
Dear I AM poor. As I said, I raised three children on low paying McJobs ~ meaning at or below minimum wage. As for having to pay for things you cannot afford, well, that is my point ~ I am actually the “lucky ducky” because well, I had to scramble my head off trying to feed these kids. Now I am raising my 3 year old grand-niece with on-the-jpb injury pain I will have the rest of my life, I am a diabetic, and I have nothing to show for it. No home of my own. No bank acvcount. Nothing. Nada. Plus I suffered the ridicule of people in those nice jobs that they no longer have or are now working at the place I have worked for over 30 years getting treated like dirt and getting paid even less than dirt.
I KNOW how “the po’ ” live cause I AM the po’! Have been for over 30 years and when I was trying to raise conscience in the Clinton years about how the poor were being maligned and how Welfare DeFormed was just a racist, sexist reason to use low income moms as a punching bag for the the rich and corporations that were the REAL welfare queens (who paid no taxes and literally got millions of times more from the government’ coffers than the entire nation of welfare moms), well, lots of those “card holders” refused to see what was going on right under their upturned noses. When I spoke in union halls, at the work place, and even in some of those high and mighty CHURCHES about this and tried to share what I knew, these good people, they openly hated people like me and well, now they ARE me.
Like Dylan said, “How does it feel???” Though I do have sympathy because I know these banks have been greedy and they WILL rip off whomever they can with whatever “legal” means they can in order to pay those CEO’s golden parachutes. But I am just glad that I did not fall under that. For all the suffering I did all those years, I am sad to see others have to suffer like I did ~ and perhaps see my generation learn what I learned young while they were living high on the hog. I just have to think, “You knew better, Your grandparents TOLD you, every school taught it, we saw the scenes of people jumping from windows in the 1820s because they had lost it all. We were warned by about every neighbor, relative or whomever that lived through the Great Depression: The unions saved our asses, and *never* trust a Republican or a loan shark …”
As an activist for the poor for almost 15 years now, who has LIVED it, I’m just sayin’ …
Cat In Seattle
Maybe we need a constitutional amendment limiting interest charges to x% of inflation, since the congress will not listen to anyone but banks. This can be done if three-quarters of the states ratify such a bill. In California, Washington, Oregon, and some other states, this can be done by referendum.