The Los Angeles Times drops some good reporting this morning on regulation and the financial lobby, aggregating publicly available records to give a glimpse at how the sausage is made (with white shoes and cufflinks, apparently).
Nathaniel Popper gets this story by combing the websites of the Federal Reserve, FDIC, SEC, and Commodity Futures Trading Commission, which have for the first time begun publishing records of their meetings. It’s a smart idea, well executed. Here’s the good lede, for instance, which does double duty as a nut graph:
Having failed to block financial reform, Wall Street is now focused on the next best thing: ensuring that the law is loosely interpreted and weakly enforced.
Lobbyists for banks, hedge funds and other firms have logged hundreds of meetings with federal regulators since the reform bill was signed into law July 21. The lobbyists are often pushing for exemptions to the bill’s key provisions, including measures that would limit risky Wall Street trading and shield consumers from excessive bank fees, records and interviews show.
There’s Citigroup lobbying the Fed to come down soft on hedge-fund trading. There’s BlackRock lobbying the CFTC for a firm-specific exemption from derivatives rules because 9t would “be forced to curtail our client-service activities,” which I thought was the whole idea. Ford wants to get an indulgence for risky car loans. And the oil industry doesn’t want to report its foreign bribes—er, payments to governments— because that will be a lot of data.
Perhaps most eye-opening are the numbers: This is regulatory capture quantified (emphasis mine):
At the same time, the logs show that consumer interests are heavily outnumbered by Wall Street.
More than 90% of the groups that appear in the meeting logs are banks, hedge funds and other big companies that rely on the financial industry, according to The Times’ analysis. Some worry that the imbalance could affect the rules regulators are drafting to implement the law.
And you get two guesses to name the two most-frequent lobbyists on the financial-reform law (Goldman Sachs and JPMorgan Chase).
Where are the professors, consumer groups, investor advocates, and unions? How do you fix such a lopsided system?
Popper also gets a good interview with CFTC commissioner Bart Chilton, who carps about having to meet with all these financial lobbyists over and over again.
“I want to be professional and polite and courteous, and I’ll let them say their peace,” said Bart Chilton, a member of the Commodity Futures Trading Commission. “But I don’t think it’s a very valuable use of their time or mine, because that is not the direction we were instructed to go by Congress”…
In one instance he grew frustrated after seeing the same law firm three times in two weeks — representing three different financial companies but making the same case each time.
“I have to say, the third time I had the meeting my attention span was dwindling,” Chilton said. “I want to know how to make this work, and get useful information about how to go forward — not fight battles that they’ve already lost on Capitol Hill.”
What’s unclear from the story is why Chilton is meeting with these guys three times in two weeks if he doesn’t want to. Why can’t he just refuse the meetings? I have a feeling the answer just might be illuminating.
That’s just a quibble, but it would have made a very good story even better.