How Much Money Does Wall Street Spend on Lobbying and Campaign Contributions?

occupy-wall-street-political-cartoon-lobbyists

Political cartoon by Mike Luckovich, Atlanta Journal Constitution

A new report from Americans for Financial Reform provides a troubling window into the amount of cash pouring into Congress from Wall Street since the 2008 crisis -it’s over $2.7 million a day, and more than $3.7 million per member of Congress!

Wall Street Money in Washington,” is a 62-page examination of political spending, draws on a special data set compiled by the Center for Responsive Politics for AFR in order to provide a more precise look at financial industry spending than is otherwise possible.

Campaign Contributions: $1.2 billion. Individuals and entities associated with financial reported making $1,201,417,199 in contributions to federal candidates for office during this election cycle. The financial sector’s contributions were almost twice that of any other specific business sector identified in the data. Of the $688,150,613 in party-coded contributions by PACs and individuals associated with finance, 55% went to Republicans and 45% went to Democrats.

Five U.S. Senators and two House members were among the biggest Congressional recipients of financial sector contributions. Sen. Marco Rubio (R-FL) topped this list with $8,687,969. The other senators were Ted Cruz (R-TX), with $5,482,011; Charles Schumer (D-NY), with $5,345,563; Rob Portman (R-OH), with $4,158,259; Pat Toomey (R-PA). Members of the House of Representatives were led by House Speaker Paul Ryan (R-WI), with $5,727,069; and House Majority Leader Kevin McCarthy (R-CA), with $3,397,980.

Lobbying: $898 million. The financial industry reported spending a total of $897,949,264 on lobbying in 2015 and 2016. This puts the sector in – close – third place, behind the Health sector, which spent $1,022,907,176, and a category of “Miscellaneous Business,” a sector that that itself probably includes some Wall Street lobbying by business groups with a broader focus than only finance.

Since 2008, the financial services industry has spent more money on contributions and lobbying than it did before the crisis, and the total in this cycle is the highest yet. 

“The entire apparatus of government operates in an environment flooded with millions of dollars in Wall Street cash on a daily basis,” said Lisa Donner, executive director of Americans for Financial Reform. “If you want to understand why finance too often hurts consumers, investors and businesses far from Wall Street, take a look at these numbers.”

You can read the whole report on the Americans for Financial Reform website. 

 

New Presentation Explains Why Organizations and People Across the US Oppose the OneWest and CIT Group Merger

If you’re wondering why people are opposed the the merger of CIT Group and OneWest Bank, watch this short Prezi!

It outlines the many problems with this proposed merger.  If, after viewing it, you’d like to weigh in with regulators, please visit CRC’s Resource page to get the two email addresses for the regulators who are reviewing this proposed merger.

CIT Merger Presentation

View the presentation by clicking on the picture above, or by clicking here: CIT Group and OneWest Proposed Merger: What You Need To Know.

 

Is Congress Really Set to Pass Legislation Written By A Citigroup Lobbyist?

Citibank Legislation

Does Wall Street have no shame?

Americans for Financial Reform, the Leadership Conference on Civil and Human Rights, The Other 98%, and other bank watchdogs are blasting Congress for potentially destroying a key protection that was included in the Dodd-Frank financial reform legislation.  Dodd Frank financial reform was passed in response to the Wall-Street induced financial meltdown, and aimed to curb the riskiest behavior that ultimately resulted in hundreds of thousands of jobs lost, retirement savings lost, and millions of people losing their homes to foreclosure.

If this “gift” is allowed to go through, banks will be allowed to use insured deposits and other taxpayer subsidies and guarantees to gamble in the derivatives market.  This practice helped create the 2008 financial crisis.

Under Dodd-Frank, bank holding companies are required to segregate, and independently fund their riskiest and most exotic derivatives trading.  This requirement means taxpayers won’t be on the hook if the banks engage in risky behavior again.

Until now.

Apparently a measure, written by Citigroup lobbyists, has worked its way into the stop-gap government funding measure.

What can you do about it?

Call your senators and let them know.  We don’t want the banks to be allowed to gamble with American citizens picking up the tab at the end.  The “Citigroup measure” included in the omnibus spending bill must be removed!

PS: As a reminder, Wall Street is counting on you to have a short memory.  Consider CIT Group, which received $2.3 billion under the TARP program.  At the time, taxpayers were told this “investment” was important because of CIT’s role as a small business lender.  A year later, CIT had made only 142 small business loans (that’s 1,053 fewer than the year before), and CIT also declared bankruptcy, wiping out its obligation to repay taxpayers.  Fast forward to 2014, and CIT Group is now trying to buy OneWest bank and create another Too Big To Fail Bank.  In addition to the $2.3 billion “gift” to CIT Group, there’s ongoing corporate subsidy tucked into this deal as well- take a look at the lucrative shared-loss deal that OneWest’s billionaire owners were able to secure from the FDIC: Is the FDIC Subsidizing a ‘Too Big to Fail’ Merger?

Community Bank Advocates Give Input on EGRPRA (Economic Growth and Regulatory Paperwork Reduction Act)

EGRPRA Hearing

Kevin Stein quips that the system, like his wrist, is broken.

You can watch the community panel here.  (discussion begins at 17:40 into the video)

Yesterday, community advocates attended a meeting in Los Angeles, hosted by the three main bank regulators, the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.  As part of the Economic Growth and Regulatory Paperwork Reduction Act of 1996, the meeting focused on identifying regulations that are outdated, unnecessary, or unduly burdensome while also balancing the regulator’s jobs to ensure the safety and soundness of the financial system.

After three panels with representatives from banks, a fourth panel consisted of community representatives.

Kevin Stein, associate director at the California Reinvestment Coalition, was one of the panelists.

A few takeaways from the meeting with community panelists include:

  1. The current rules need to be updated to reflect new bank practices.  Using CIT Bank as an example, some Internet banks are evading the requirements to reinvest in the communities where they accept deposits.  For example, while CIT Bank accepts $14 billion from around the US, it only reinvests those deposits near its Salt Lake City headquarters. See more here: Coalition Asks Bank Regulators: “Is There Community Benefit In OneWest And CIT Group Bank Merger?
  2. Dialogue is important between regulators, communities, and banks.  One good way to do this is through public community benefit and reinvestment plans.  To see an example of a recent one, look at Banc of California’s Community Benefit and Reinvestment plan.
  3. Bank regulators could provide negative credit to banks during their CRA exams for engaging in practices that are harmful to their communities- for example through financing payday lenders and other abusive lenders, or financing practices such as REO to Rental, which is hurting first-time homebuyers, displacing long-term tenants, and changing communities.  More about that here: 80 Organizations Ask Federal Gvt. to Address Investor Cash Flooding Into Neighborhoods   Another harmful practice can be seen in the example of OneWest bank foreclosing on widowed homeowners who have reverse mortgages serviced by Financial Freedom- a OneWest subsidiary. More examples of that here: HECM Non-Borrowing Spouses Renew Class Certification Attempts  and here: 103-Year-Old North Texas Woman Fights To Keep Her House  You can hear Sandy Jolley discuss Financial Freedom at the meeting here (move cursor to 1:10:18).
  4. Following their playbook BEFORE the our foreclosure crisis, banks are continuing to try and use preemption as a means to evade state consumer protection laws– for example, the California Homeowner Bill of Rights.  More on that here: Saving the Homeowner Bill of Rights 
  5. Some of the people most impacted by banks also may be the least likely to hear about bank mergers.  As an example, the California Reinvestment Coalition has begun hearing from consumers harmed by OneWest Bank and its subsidiary Financial Freedom because they have seen stories in the media about this proposed Too Big To Fail merger.  However, they are being told by the Federal Reserve that their comments “aren’t timely.”
  6. When banks leave communities, harmful financial service companies move in– like payday lenders, check cashers, and car title lenders. See CRC’s report about the high percentage of payday lenders in San Joaquin Valley as compared to banks: New Report Documents Lack of Banking and Financial Services in the San Joaquin Valley)

Interested in seeing more?  Read this press release: Community Advocates Urge Bank Regulators to Update Regulations (EGRPRA)

 

Regulation of Banks