A Fighting Chance

Another analysis by the Huffington Post showed that the House Financial Services Committee has an active revolving door: Of the 243 staff members who worked on the Committee between 2000 and 2010, about half of those who left had registered as lobbyists. Most of those registered as lobbyists for the financial industry. Ryan Grim and Arthur Delaney, “The Cash Committee: How Wall Street Wins on the Hill,” Huffington Post, March 18, 2010.

they could to stand up for consumers: Many consumer groups turned to the Center for Responsible Lending for research. Under the leadership of Martin Eakes, CRL had developed some of the best research anywhere on the impact of various financial scams on American families. CRL also provided critical data early on about the mortgage foreclosure crisis. Without its careful and detailed studies, much of the work to get the consumer agency passed into law would have been harder.

gazillion other issues to boot: For example, Jim Guest, the longtime president and CEO of Consumers Union, got into the battle. CU had a huge number of issues on its plate, from assessing the reliability of cars to evaluating the effectiveness of stain removers. But Jim jumped in, inviting me to discuss the consumer agency with thousands of e-activists by telephone conference call. Those e-activists then wrote e-mails and letters, called members of Congress, and otherwise advocated for reforms. They were smart and tough as they pressed for adoption of the CFPB, and they gave new energy to our efforts.

Similarly, Public Citizen was working on trade policy, minimum wage issues, and money in politics, and still helped to get the consumer agency passed. All their work was critically important, and they covered such a wide range of topics only by working long hours on a tight budget.

drive to kill any meaningful financial reform: According to the Center for Responsive Politics, the banking and finance industry spent, in the aggregate, more than $523 million on campaign contributions and lobbying, or $1.4 million a day, during the fight against financial reform. “As Senate Begins Financial Reform Debate, Industry Spends Tens of Millions to Influence Debate,” Center for Responsive Politics Press Release, March 22, 2010. The number was found by aggregating the campaign contributions and lobbying expenditures made by accounting firms, commercial banks, credit unions, finance and credit companies, insurance companies, real estate firms, savings and loans, and securities and investment firms. One member of the House Financial Services Committee, Maxine Waters, lamented how powerful the lobbying had been: “I understand they have almost hired a lobbyist for each one of us.… I’m more concerned that there are members of Congress who are beginning to take on the arguments of the financial services industry about why a consumer financial protection agency is not necessary.” Ryan Grim and Arthur Delaney, “The Cash Committee.”

reelection campaigns of influential members of Congress: In 2009, of the ten Representatives most well funded by the finance and banking industry, five were members of the House Financial Services Committee. http://www.opensecrets.org/news/2009/11/finance-and-credit-companies-l.html. Because of the high campaign contributions to its members, the Financial Services Committee is known as a valuable committee assignment for vulnerable members of either party who need to raise lots of money for reelection. It’s a quality that has helped earn the bottom two rows of the committee hearing room—where all the most junior members sit—the reputation of being “the place where reform goes to die.” Between 2009 and 2010, the eleven freshmen on the committee raised an average $1.09 million for their 2010 reelection campaigns. The House-wide average was less than half of that number. Ryan Grim and Arthur Delaney, “The Cash Committee.”

“Our goal will be to kill it”: Scott Talbott, then a top lobbyist for the Financial Services Roundtable, was quoted as saying: “Our goal will be to kill [the Consumer Financial Protection Agency], or make it the least-worst way to do the wrong thing.” Cheyenne Hopkins, “Banking Industry Is Underdog in Fight over New Agency,” American Banker, July 1, 2009.