Ed's News

Bank lobby launches dark money group to kill reform and other Friday Follies

By Ed Mierzwinski
Senior Director, Federal Consumer Program

UPDATE (9/10) TO ITEM 2 OF THIS POST: Monday's NY Times story "." Monday's , from the Wall Street reformers at Better Markets: Excerpt: "In the bill, “rule” is defined to include almost everything an agency does both internally and externally.  (The definition is ... available .)  Thus, the Executive Branch will not only be heavily involved in agency rulemakings, but will be deeply involved in almost everything an agency does."

ORIGINAL POST: ITEM 1: The American Bankers Association's latest effort to kill financial reform is to raise millions of dollars through a new dark money group () disguised as a purported social welfare organization to avoid disclosure laws but primarily designed to elect Senators who agree with their narrative that (1) the financial collapse of 2008 was not their fault and (2) financial reform has gone too far. On Thursday, according to its website, board voted to establish "Financial Education and Advocacy Initiative Inc. -- a new nonprofit organization that will help strengthen the banking industry's voice in Washington. "This new organization will give us more firepower in our battle to protect the banking franchise," said ABA President and CEO Frank Keating." (The rest of the story is hidden behind a members' only wall.)

In a story "" this week, Bloomberg's Robert Schmidt and Phil Mattingly had more: 

"The financial industry has so far kept a low profile in the 2012 campaign, in part because banks remain targets for both political parties for their role in the 2008 financial crisis. While Wall Street banks and their employees have given millions to presidential and congressional campaigns, some of the largest banks have stayed away from overt political activities like funding the parties’ conventions."

Our colleagues at Public Citizen have :

"ABA staff defended the organization’s choice of using nonprofit tax status to conduct its planned undisclosed campaign intervention activity by asserting that the group would spend 51 percent of its funds on public issue advocacy and 49 percent on electioneering, thus attempting to justify the group’s primary purpose as a social welfare organization rather than a political organization – despite the fact that such “other” activities are peripheral to the group’s stated primary objective: campaign intervention."

More on this banker effort from the PIRG-backed Our latest Travel Buddy report on dark money groups and SuperPACs (August 2012). More from Travel Buddy Democracy Advocate Blair Bowie on a SuperPAC formed by some bankers earlier this year.

ITEM 2: As reported by colleagues at OMBWatch, industry opponents of financial reform joined by other powerful special interests are trying to sneak controversial legislation, , the Independent Agency Regulatory Analysis Act,  "" and through the Senate Homeland Security and Government Affairs Committee this month. A leading administrative law professor, that one of the bill's lead sponsors, Senator Susan Collins (ME) was against the idea before she was for it. The bill would place all independent agencies -- which are independent for a reason and range from the Fed, SEC, CFPB and other bank regulators to the CPSC and FTC --  under the highly-politicized White House Office of Information and Regulatory Affairs (OIRA). The goal? Paralyze their efforts to enact fair marketplace protections. Watch our home page for a longer entry from my Travel Buddy colleague, Public Health Advocate Nasima Hossain, on this.

ITEM 3: In other news, the California Reinvestment Coalition has a charging that -- despite a return to high profits -- the state's biggest banks are using outrageous bank fee increases to push households out of mainstream banking with the intent of capturing them with even more profitable prepaid card products that are much less advantageous to consumers. A separate new study from The Pew Center on the States explains that ""

And that's Friday's Financial Follies. Remember, in Washington, we don't have to make this stuff up.

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