The big banks may have kept their heads down in 2010, but those days are over.
A group of banks recently launched a super PAC to focus on major congressional races. Earlier this year, financial services groups hosted a large-scale fundraiser for a candidate challenging a senior Senate Republican. And the industry remembers its friends on Capitol Hill – paying money to lawmakers who have always voted their own way.
It’s a PR shift for the banks, which lowered their profile after the largely unpopular bank bailout, which served as the rallying cry for the tea party.
But after President Barack Obama enacted the Dodd-Frank Financial Reform Bill and the Occupy Wall Street movement amplified anti-banking rhetoric that even some Congressional Democrats picked up on, it appears the industry in have enough. They are taking a stronger stance this cycle, and they have shown they are ready to back their speech with some serious cash – a scenario that should make Democrats and some Republicans nervous as the summer campaign season approaches. .
“No one likes to get fired, and there is definitely that feeling,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, which represents the banking industry in addition to other financial interests.
The banking industry has always been a major player in political spending, but its increasingly aggressive tactics are a sign that some industry players want to give Capitol Hill more leverage, especially with the deep overhaul of the financial system still underway. ongoing and with major legislative reforms on the horizon.
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“They just feel hassled by everyone,” said a financial services lobbyist. âAnd there are two ways to handle this, hide and wait for it to go away – and judging by the campaign rhetoric, it’s likely to get worse. Looks like some guys are fed up, and they’re going to put their money where they say they are and try to defend themselves the best they can.
Their latest strike: State banking associations launched a super PAC called Friends of Traditional Banking at the end of last month.
Its stated purpose is to support members of Congress “who demonstrate a continuing understanding of the vital importance of traditional banking services to our communities and local economies,” and to oust those who do not. âTogether, we can become a force that Congress will listen to and respect,â their website says.
Howard Headlee, president of the Utah Bankers Association and treasurer of the new super PAC, said traditional banks had been beaten and they were fed up with the vitriolic they faced.
âWe had a crisis, there was an attempt to address some of the weaknesses associated with this crisis, and then it went totally overboard for no reason,â Headlee said.
âWe’ve been to Washington a number of times and told members of Congress the same thing over and over again, ‘Don’t do that, there are these unintended consequences, you’re going to impact traditional banks. This will slow down recovery; it will make things more difficult. They weren’t listening at all and seemed propelled by these extreme interests.
The super PAC won’t work like other well-known outside spending groups like American Crossroads, bringing in big checks to run expensive ads. Instead, they plan to convene their advisory board to choose a few key races to play in. Their supporters would then pledge to donate between $ 300 and $ 1,000 directly to targeted campaigns.
It’s still unclear how strong the super PAC will be, but it could have a big impact on a few races this fall if the group manages to convince bankers across the country to stand up.
Other groups have already made waves this election season backing the main opponent of Sen. Dick Lugar (R-Ind.) After pushing them back in a key vote.
Several senior financial services lobbyists organized a fundraiser in January for Richard Mourdock, the favorite of the Lugar-defying tea party in Indiana. The event was hosted by Talbott from the Financial Services Roundtable, Lisa Nelson from Visa, Peter Blocklin from the American Bankers Association and Vincent Randazzo from PNC.
The fundraiser was seen as a wake-up call after Lugar and a dozen other Republicans voted against the banks on an amendment that would have blocked the caps on sweeping fees last year. This amendment, which failed in the Senate, pitted two of the country’s most influential business groups – banks and retailers – against each other.
The ABA also wrote a check for $ 5,000 to Mourdock last June, shortly after the Senate vote on the sweep fee change.
These tactics may have been seen as cheeky for the industry not so long ago, but banks have been feeling less timid lately, now that the bailout is behind them and anti-bank rhetoric. calmed down.
“Time heals all wounds,” said the financial services lobbyist. âObviously, when they reach out to the federal government, timidly seeking billions of dollars, it’s hard to ask for anything other than the billions you need to open the doors the next day. But they paid him back. The nation has gone through a crisis and it has weathered the storm; most of these banks are fairly healthy or fairly healthy right now. ”
They are also worried about what could happen with the implementation of sweeping new financial rules if they don’t have many friends in Congress next year.
Talbott said the banking industry has always been politically involved, but now “there’s a little more urgency here because of Dodd-Frank.”
âWe have just gone through a very difficult economic and political environment,â said Talbott. “I think they are just starting to support officials or candidates who understand our industry to build a more receptive audience.”
Meanwhile, banks are maintaining their traditional tactics of helping their friends, even after political donations plunged in 2010.
Among the main recipients of the Commercial Bank Species Congress this cycle: Sens. Jon Tester (D-Mont.) And Bob Corker (R-Tenn.) Chairman of the House Financial Services Committee, Spencer Bachus (R-Ala.), According to the Center for Responsive Politics.
The commercial banking industry donated just $ 21.7 million in 2010, down about $ 16 million from its spending on federal applicants in the 2008 cycle, according to CRP data.
Employees and PACs associated with commercial banks have donated more than $ 13.6 million to federal applicants so far this cycle, the data shows. And industry is the 18th sector in terms of political contributions, up slightly from 19th place in the 2010 cycle.