Banks are sending more lobbyists to Washington, D.C., than any time since the 2007 global financial crisis, as the Biden administration aims to introduce new regulations for the banking industry, Reuters reports.
Banks with more than $50 billion in assets and seven industry groups sent a total of 486 federal lobbyists to Capitol Hill in 2023, 3.4% more than in 2022, when the number also swelled. according to OpenSecrets data analyzed by Reuters. The sector has recently been challenged by regulators, including proposals to crack down on fair lending abuses, transaction fees, increased capital requirements and crisis-related changes that could impact total returns that rocked the sector in early 2023. facing pressure from (Related: Biden says the economy is booming. So why are all these companies laying off workers?)
According to Reuters, the eight largest U.S. banks had 191 lobbyists at the end of 2023, which was not significantly different from the previous year, with smaller banks accounting for most of the increase. Banks outside the top eight with more than $100 billion in assets employed 255 lobbyists in 2023, an 11% increase from 2022 and a new record.
The increase from small banks is consistent with the divergence in profits of U.S. financial institutions, with three of the four largest U.S. banks posting huge profits in 2023, while many small and medium-sized banks are facing high interest rates, etc. suffering from the following factors.
U.S. banks face approximately $685 billion in unrealized losses (updated as of third quarter). This problem won't go away anytime soon until the Fed starts cutting rates.new york community bancorp $NYCB You could be the next victim. pic.twitter.com/Hi3CQj4dYu
— Barchart (@Barchart) January 31, 2024
According to Reuters, banks launched a major lobbying campaign in the second half of 2023 to block capital increases proposed in the final stage of Basel III proposals. The final Basel III regulations stem from international reforms brought forward after the global financial crisis, and the Senate Banking Oversight Committee considered the regulations in December.
After Trump-era policies were reversed, regulators under the Biden administration were given more power to more closely monitor what the administration considers abusive lending practices by financial services. according to To the Associated Press. The Biden administration also target The White House argues that “junk fees,” or surcharges, hide the real price and can be predatory.
Bank lobbying for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which introduced a number of restrictions to reduce risks in the financial system after the 2007-2009 global financial crisis. has increased rapidly. according to Go to Investopedia. The law also created the Consumer Financial Protection Bureau (CFPB), which was designed to protect consumers from predatory banking practices.
Critics of the banks' lobbying efforts regarding Dodd-Frank point to watershed issues such as excluding auto loans from CFPB jurisdiction, lack of action against government-backed companies Fannie Mae and Freddie Mac, and the absence of financial institutions. It points out the regulations. Effective measures to prevent banks from being too big to fail. according to To Atlantic.
Due to a series of bank failures that hit the industry in 2023, small and medium-sized banks are particularly vulnerable in the current system, with depositors shunning smaller banks in exchange for megabanks where they believe their funds are safer. There is a tendency to The crisis began with a run on Silicon Valley Bank and spread to First Republic and Signature, all of which collapsed and had to be bailed out by the Federal Deposit Insurance Corporation (FDIC).
The Committee on Banking, Housing, and Urban Affairs and the White House did not respond to requests for comment.
All content produced by the Daily Caller News Foundation, an independent, nonpartisan news distribution service, is available free of charge to legitimate news publishers with large audiences. All republished articles must include our logo, reporter byline, and DCNF affiliation. If you have any questions about our guidelines or partnering with us, please contact us at licensing@dailycallernewsfoundation.org.
