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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
4.5 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
$12.9 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
$1 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.

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Jane Hamsher

Jane Hamsher

Jane is the founder of Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.
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