Flood of Dollars Looks Like “Wall Street Buying Votes,” says Watchdog; More Massachusetts-Style Backlash Likely If Consumer Protections Are Dropped
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Washington, DC – A report released today by Consumer Watchdog on the financial industry’s efforts to neuter the financial reform bill in Congress, and the Senate Banking committee in particular, finds the sector gave $41 million to committee members since 2005 and spent $336 million lobbying Congress in the first three quarters of 2009.
Download the full report here.
Some senators are interpreting the results of Tuesday’s special election in Massachusetts as a sign they should go slow on financial and other needed reforms.
“Nothing could be further from the truth,” said Carmen Balber, Washington director for Consumer Watchdog. “Senators who have taken millions from the financial industry appear ready to kill proposed consumer protections that would rein in the speculation and greed that cost Americans their homes, jobs and savings. But selling out to Wall Street yet again will do nothing to restore confidence on Main Street. The message for the Senate is to stand up to their financial industry donors or pay the price when the voters lose faith as they did in Massachusetts.”
Sen. Christopher Dodd (D-CT), Chairman of the Senate Banking committee, was the top recipient of industry money, and took $9,000,975 from the financial sector since 2005. Ranking Member Richard Shelby (R-LA) took $2,461,009. Shelby has opposed an independent consumer protection regulator and news reports suggest Chairman Dodd is considering dropping his initial proposal for a strong independent consumer financial agency.
The financial sector sponsored at least 43 fundraisers for members of the Senate Banking committee in 2009, and hired 24 former Senators or Banking committee staff to lobby on behalf of financial firms, the report also finds.
The Consumer Financial Protection Agency (CFPA) has been a central point of attack for commercial banks battling financial reform. Banks want consumer protection authority to remain with the regulators who failed to rein in abuses like predatory mortgage lending that contributed to the economic meltdown. The largest bank contributors to Congress in 2009 include leading opponents of the CFPA: the American Bankers Association, Citigroup, Bank of America and JP Morgan Chase.
“To ordinary voters, this flood of dollars looks like Wall Street buying votes,” said Balber. “The fate of an independent consumer regulator is a test of whether politicians will rise above financial industry influence to enact meaningful regulatory reform that directly aids ordinary Americans. If Senators don’t stand up to the financial industry in the midst of the Great Recession, they never will.”
Data for the report was compiled from sources including: the Center for Responsive Politics, the Sunlight Foundation, and the US Senate Lobbying Disclosure Act Database.
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Consumer Watchdog is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us online at www.ConsumerWatchdog.org