Two years after Dodd-Frank, Wall Street continues to spend
Last Wednesday, the Consumer Financial Protection Bureau (CFPB) announced its first enforcement action, requiring Capital One to refund $140 million to customers impacted by deceptive marketing practices and pay an additional $25 million penalty to the CFPB.
The CFPB was established as part of the Dodd-Frank financial reform legislation, which was passed two years ago, July 21, 2010. Two years later, Wall Street is still fighting the legislation and the industry is filling the campaign coffers of elected officials doing its bidding.
The Capital One case is a perfect example. In 2011, on the first anniversary of Dodd-Frank’s passage, the U.S. House passed legislation sponsored by Wisconsin Rep. Sean Duffy (R) to significantly weaken the power of the CFPB. House members who supported this legislation have taken four times more campaign money altogether ($144,500) and three times more, on average, from Capital One's PAC in the 2012 cycle than those who voted against it, according to Public Campaign analysis of data from the Center for Responsive Politics.
But Capital One isn’t the only big giver in Washington. On the second anniversary of Dodd-Frank, here are a few facts about who Wall Street’s big spending.
- Between 2008 and 2012, campaign contributions by Wall Street has shifted dramatically from Democrats to Republicans. As congressional Republicans have spent the last two years trying to block or water down Dodd-Frank, their share of Wall Street money has gone from 48 percent in 2008 to 53 percent in 2010 up to 64 percent in 2012—almost a 2-1 edge over Democrats. The finance, insurance, and real estate (FIRE) sector is the biggest giving so far this cycle.
- The top spender this election cycle from the industry is the PAC and employees of Goldman Sachs, which has given nearly $5 million to federal candidates.
- The industry is following up these contributions with help from K Street. From 2011 through the first quarter of 2012, the finance, insurance, and real estate (FIRE) sector has spent $600 million lobbying Congress and federal agencies. In the first quarter of 2012, that included 1,984 lobbyists—more than half of which are considered “revolvers,” or people who have previously served or worked in Congress or for a federal agency.
- Financial interests on Wall Street have soured on Obama since his first campaign in 2008. Whereas Obama outraised McCain $43 million to $31.2 million from industry donors, Romney has been burying Obama in the Wall Street money race. Politico reported in June that “Mitt Romney's presidential campaign and the super PAC supporting it are outraising Obama among financial-sector donors $37.1 million to $4.8 million.
- Nearly one-quarter of Romney’s “bundlers,” those collecting donations for the campaign, are from the financial sector.
- Outside spending funded by financial interests has exploded in the past four years. It has increased almost 20-fold from $3.2 million in 2008 to its current $60 million only part the way through the 2012 cycle. This money heavily favors Republicans, going 86.7 percent to conservatives and 13.3 percent to liberals, according to the Center for Responsive Politics.
Four years after Wall Street brought our economy to its knees and the American people had to bail them out, banking executives still want a Congress pliant to them and they are spending big bucks to make it happen.