Monday, November 15, 2010

Financial Lobbyists Have Met at Least 510 Times with Regulators over the New Financial Regulation Act

So how many times has your special representative met with regulators over the new Dodd-Frank Financial Regulations Act? Thought so.

If you really want to know why you are going to get screwed when the ink dries on the rulings that regulators will make as part of the mandates in Dodd-Frank, here's the number to keep in mind: 510.

Since July, according to a study by LaTi, that's how many times financial lobbyists have met with regulators over Dodd-Frank.

Here's LaTi on what goes on at these meetings:

The lobbyists are often pushing for exemptions to the bill's key provisions, including measures that would limit risky Wall Street trading and shield consumers from excessive bank fees, records and interviews show...

[The] glimpse frequently shows companies arguing that their operations shouldn't be covered by the new regulations, or that the regulations should be narrowly written, according to summaries posted by the federal agencies on their websites...

Four executives of Ford's consumer finance division met with Fed officials Aug. 14, asking that its vehicle loans "be exempt" from rules that are designed to rein in risky lending, according to documents released by the agency...

...the logs show that consumer interests are heavily outnumbered by Wall Street...

Sheila Krumholz, the executive director of the Center for Responsive Politics, is concerned that Wall Street's voice will be especially powerful in discussions on implementing these measures.

"As you get into the nitty-gritty details there aren't a lot of people who can give a countervailing argument," she said.
Look, the Frank-Dodd Act is likely more contorted than anything else Frank has ever done, so it's no surprise that financial institutions want to have influence over the final outcome.

LaTi explains: Despite taking up 2,319 pages, the Wall Street Reform and Consumer Protection Act left key details to regulatory agencies.

Thus, Frank-Dodd has created huge power-centers at these agencies. And it is real expensive to get access. Try calling up Sheila Bair and see if you can get a meeting with her the way Jamie Dimon did.
According to Lati, "Jamie Dimon, chairman and chief executive of JPMorgan, was among those in attendance when a bank contingent met Oct. 8 with Federal Deposit Insurance Corp. Chairwoman Sheila Bair."

That's only one of 23 meetings JPMorgan had with regulators. Goldman Sachs, not surprisingly, during the same period met 21 times with regulators.

Bottom line: The nightmare that is the Dodd-Frank Act is continuing to evolve and the financial institutions and their smooth lobbyists, who know how to capture agencies, without the agencies even knowing it, are all over D.C.

Here's what will come out of it: Edges for the big banks, like Goldman and JPMorgan, against consumers and onerous regulations for anyone else trying to enter the sectors where the big banks roam.

1 comment:

  1. Yes, for the Cartel Capitalist (Pig Men, Da Boyz, The Banksters, The Insiders, The Wall Street Crowd, The Bonesmen, The Eastern Establishment, The A-Team, The Oligarchs, etc.) bureaucrats and politicians are merely a cost of doing business.

    This began many years ago in the era of Reform when Da Boyz realized that it was cheaper to co-opt the Reformers than to oppose them.

    They then discovered that such purchasing led to another virtue ... Barrier to Entry!

    If the law is made so complicated (in the name of 'Reform' of course) and the bureaucracy to enforce the Reform so all encompassing and obscure then others, seeking to enter that market, could not afford to comply with the bureaucratic rules and rise up to compete with them.

    Further by understaffing the bureaucracy the enforcement of the bureaucratic policies would be episodic and thus political.  Certain players would NEVER be investigated for violations or else would, at this point, be so large that the fines to be levied would be miniscule compared to their capital base.  Not so for new entrants ...

    This insight explained to me a mystery of my Conservative youth.  Why is it, I asked myself, that 'Big Capitalists' were in favor of 'Big Socialism'.  Why is it that the Big Businessman/Entrepreneur does not, all Atlas Shrugged-like, oppose the rise of Big Government?

    I was young then and stupid.

    But now I am neither.

    Along these lines I recall a colloquy I had with my father - a big follower of the horses.

    How, he asked me one day, does the Mob fix a Horse Race?

    Why, says I, by juicing a horse.

    No.  They do not wish to be so blatant.

    They dope down two or more horses in a race and parlay the rest.

    Brilliant!  Even an extended statistical analysis of the odds and the flow of betting money would not detect that.

    So the masses of men have been gulled ...

    But in the present crisis the Big Boys have moved from 'doping down' (the maze of laws) to 'juicing' (The Bailout).

    The crisis, to them ... Their Crisis ... must in their eyes be truly terrible for them to become so obvious.

    I would like then - here and now - to formally apologize to all the John Birchers that I tormented in argumentation earlier in my life ...

    Of course now I believe that the John Birch Society itself was created by Da Boyz ...

    They might be uncomfortable with that also ...