Bailout Recipients Spent $13 Million Lobbying Against Consumers, For Their Own Bonuses in 1Q 2009
An FDL review of lobbying reports for the first quarter of 2009 reveals that banks receiving federal bailout funds spent over $13 million lobbying against consumer interests and for the financial benefit of their executives.
In the first quarter of 2009, banks such as Bank of America, JP Morgan and Wells Fargo that received billions in taxpayer assistance focused their lobbying efforts on defeating attempts to regulate credit card practices, specifically caps on interest rates. They also lobbied extensively to prevent legislation that would have allowed bankruptcy judges to write down mortgage principle ("cramdown"), which FDL examined yesterday. At the same time, they lobbied on behalf of their executives to be paid without limit.
The efforts so far have been successful. Despite the fact that "cramdown" could have stopped 20% of the estimated looming 8 million foreclosures at no cost to the taxpayers, it was defeated in the Senate. When the Credit Card Bill of Rights was voted on in the House last week, Barney Frank and Nancy Pelosi did not permit the Rules Committee to allow any of the amendments on to the floor which would have capped credit card interest rates. And despite being passed by the House last month, the Senate has not taken up either the clawback bill for bonuses paid to TARP recipients or the bill that would have tied executive compensation to a company’s profitability.
|Bailout Recipient||Lobbied||Spent on Lobbying 1Q||Bailout Funds Received|
|American Express (PDF)||Cramdown, Credit Card, Exec Comp||$875,000||$3.4 billion|
|Bank of America (PDF)||Cramdown, Credit Card, Exec Comp||$750,000||$52.5 billion
|Bank of NY Mellon (PDF)*||Credit Card, no response||$497,000||$3 billion|
|Barclays PLC & US Affiliates (PDF)*||Cramdown, Credit Card||$1,435,916||$7.0 billion|
|Capital One Financial Corp (PDF)||Cramdown, Credit Card, Exec Comp||$469,000||$3.6 billion|
|Citigroup||Credit Card, Exec Comp||$1,680,000||$50 billion|
|Credit Suisse (PDF)*||Cramdown||$580,000||$.4 billion|
|Deutsche Bank*||Cramdown||$220,000||$6.4 billion|
|Discover Financial Services (PDF)||Cramdown, Credit Card||$257,500||$1.2 billion|
|Fifth Third Bancorp (PDF)||Cramdown, Credit Card||$31,000||$3.4 billion|
|GMAC (PDF)||Cramdown||$410,000||$5 billion|
|Goldman Sachs Group, Inc. (PDF)||Cramdown, Credit Card, Exec Comp||$1,105,000||??? $10 billion
|HSBC GR-Corp (PDF)*||Cramdown, Credit Card||$1,176,573||$3.3 billion|
|ING North America (PDF)*||Cramdown||$720,000||$1.5 billion|
|JP Morgan (PDF)||Cramdown, Credit Card, Exec Comp||$1,386,000||$25 billion|
|Morgan Stanley & Co (PDF)||Cramdown, Exec Comp||$645,000|| $10 billion
|PNC Bank (PDF)||Cramdown, Credit Card||$150,000||$7.6 billion|
|UBS Americas, Inc (PDF)*||Cramdown||$70,000||$1.7 bilion|
|U.S. Bancorp (PDF)||Cramdown, Credit Card, Exec Comp||$255,000||$6.6 billion|
|Wells Fargo & Company (PDF)||Cramdown, Credit Card, Exec Comp||$810,000||$25 billion|
|TOTAL||$13,522,989|| $220 billion
Companies that received money as AIG counterparties are designated with an asterisk (*). Since they were not direct TARP recipients and thus not subject to executive compensation limits, tellingly did not lobby on the issue.
A new study by the Center for Public Integrity reveals that Wells Fargo, GMAC, HSBC, JP Morgan Chase, Citigroup, Barclays and Credit Suisse were among the top 25 subprime lenders at the peak of the subprime market.
Although AIG made much of the fact that they did no lobbying in the first quarter, they are members of the American Council of Life Insurers and AIG’s Rodney O Martin sits on the board (PDF). ACLI spent $2,487,075 lobbying in 1Q 2009, and were a part of the successful effort to kill cramdown.
The Senate takes up the Credit Card Bill of Rights this week. Bernie Sanders wants to strengthen it in the Senate and has introduced legislation to cap credit card interest rates at 15%.
Senator Charles Schumer says he is "optomistic" about the fate of credit card reform:
"Bankruptcy reform, important as it was, was sort of esoteric. If you went into O’Halloran’s Pub, the fellas aren’t saying to you, ‘What’s going on with bankruptcy reform?’" says Schumer in his best guy-on-a-bar-stool voice. "But they might say, ‘What are you doing about my credit cards?’ The average person feels the second much more than the first, even though both are important."
If popular sentiment will be the ultimate arbiter of whether credit card interest rates will be capped, it should be smooth sailing for Sanders’ bill. It remains to be seen, however, if the $13 million spent on lobbying efforts by bailout recipients will have more sway.