Financial Interests Gave $3.8 Million to Sponsors of Amendments to Weaken Reform Bill

Posted on 11 December 2009

Printer-friendly versionPrinter-friendly versionSend by emailSend by email

By Carmen Balber
Consumer Watchdog
Thirty-four members of the U.S. House of Representatives that offered amendments to weaken consumer protections in the House financial reform package received $3.8 million in campaign contributions from the financial sector in 2009, an average of $111,000 each, according to a Consumer Watchdog analysis of data obtained from the Center for Responsive Politics.

Members of the New Democrat coalition, which delayed consideration of the bill last night until their demands on amendments were met, raised $6.5 million from firms in the financial sector.
The financial sector gave a total of $28 million to all members of the House of Representatives this year.  
The financial industry made a fortune gambling with America’s money, then got their friends in Congress to bail them out at taxpayer expense. Now they’re lobbying to weaken the regulator that will rein in new schemes to steal money from consumers. These proposed amendments were bought and paid for the by financial industry and aimed at sabotaging reform.
Download the Consumer Watchdog analyses here:$.pdf
And here:$.pdf

Weakening or eliminating the proposed Consumer Financial Protection Agency is a top priority for financial industry lobbyists and has been a flashpoint in the financial reform debate this year. U.S. Chamber of Commerce executive David Hirschmann said, “We’ll spend whatever it takes,” upon the launch of a multi-million dollar financial industry campaign against the consumer protection agency in September.
One amendment prompted a backroom fight over whether to prohibit states from enacting strong consumer protection laws against financial abuses when federal rules do not provide consumers with enough protection. According to news reports Wednesday night, the amendment forced unspecified changes to the financial reform bill, presumably allowing some additional preemption of state authority.

The New Democrat coalition held up consideration of the financial reform bill until changes were made.
Sponsors of the original amendment to override state consumer protections received $1.4 million in campaign contributions from companies in the financial sector in 2009, and $11.4 million over the course of their careers. Primary sponsor, Illinois Representative Melissa Bean, has received $393,000 from the financial sector, 50% of all the money she raised in 2009.

The other sponsors were Reps. Adler (D-NJ), Castle (R-DE), Crowley (D-NY), Herseth Sandlin (D-SD), Lance (R-NJ) and Royce (R-CA). Adler, Bean and Crowley are members of the new Democrat coalition.
States play a critical role in ensuring consumers are truly protected against abuses and outrageous treatment by lenders and financial institutions. Preempting state laws would roll back consumer financial protection before reform even gets off the ground.

The list of proposed amendments was reported by the Rules Committee as of Wednesday night. A list of which amendments will be considered on the floor has not yet been released. A list of proposed amendments that would have weakened the Consumer Financial Protection Agency can be found here:

Carmen Balber is a Consumer Advocate with Consumer Watchdog, a nationally recognized consumer group that has been fighting corrupt corporations and crooked politicians since 1985.

Thank you for your essay. I agree that these Democrats are weakening reform.
We will know that they are serious when they re impose Glass Steagal reforms.
Until they do that, they are just covering for finance capital.
The state budget crisis, and the crisis in 36 other states, was caused by the robber barons of Wall Street.
The crisis, caused by finance capital, will continue for years If we don’t find a way to stop Wall Street from controlling our government, the standard of living of working people will continue to decline and we will continue to have periodic economic crises.
These Democrats protecting the banking industry, like Joe Lieberman did in 2001, make it difficult to get at the looters of our economy.

The looters of our economy are a Congress and an administration (two administrations, actually) that used public funds to cover what had been private market losses to bail out their speculator buddies. Both dems and repubs did this.

So BILLIONS of your dollars went into the pockets of the very people who had made unconscionably bad bets and - until they were bailed out - had lost.

By allowing private gain while covering the losses with public monies, our government did the worst thing they could have done. If they'd just let the losers LOSE, that would have put discipline in the market such as no amount of regulation - particularly not regulation by the same people that let it happen the first time - will ever instill.

I find it hard to believe that this kind of actions exist today, actually I am not yet sure on whether I should believe it or not. I know that financial institutions are not exactly our friends but saying that powerful people in the financial industry want to eliminate financial consumer protection is a little too much for me to understand. I doubt that the report you shared is objective, is there anybody here that knows the other side of the story? In my business I collaborate with several finance companies in Chicago, should this analysis give me reasons to worry?