It’s not easy to talk to the Fed because lobbying is expensive
Simon Johnson blames the Fed for listening too much to Wall Street titans and not enough to public-interest groups: He points out the central bank has held hundreds of meetings with industry lobbyists over Dodd-Frank and only a handful of meetings with reformers. But financial reformers themselves say that it’s not just the Fed’s fault that their access has been constrained: Public-interest groups simply lack the resources — in terms of time, money and personnel — to lobby regulators as intensively as many industry stakeholders.
“They can afford to play man-to-man. We have to play zone,” says Marcus Stanley, policy director of Americans for Financial Reform, which supports a strong version of Dodd-Frank. “They can send three to four lobbyists on every decision. In terms of the sheer number of lobbyists, we’re probably outnumbered 100 to 1.” Industry groups also have the resources to analyze some of the extremely complex, technical rules that Dodd-Frank is putting in place.
Johnson notes that Anat Admati, a Stanford finance professor, has failed to get a meeting with the Fed. But it’s unclear whether that experience is emblematic of other pro-reform groups. According to Stanley, the Fed has been responsive when AFR, at least, has asked the central bank for meetings or made other queries. “When we have e-mailed or called the Fed, we get a response, we eventually get a meeting,” he says. “They have been polite.” (Johnson does mention AFR’s meetings in his story but says he believes the Fed is still reluctant to talk to financial reformers.)
That said, Stanley maintains that the Fed and other agencies involved in the regulatory process could be more proactive about getting input from pro-reform and consumer groups, particularly given the disparity in funding and resources. “It’s a little incumbent on them to reach outside,” he concludes.