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Lobbying Battle Begins Over Creating Consumer Financial Protection Agency
Few lobbyists predict they can actually prevent the creation of a new agency given the severity of the financial crisis and the momentum in Congress for overhauling regulation.
"Politically, it would be difficult to kill it outright," said Scott E. Talbott, senior vice president of government affairs at the Financial Services Roundtable, which represents the nation's largest financial firms. "Our goal is to change the agency, change the proposal, to where the benefits outweigh the costs. Right now, we believe it's the other way around."
In addition, opponents, like many lawmakers, are wary of being perceived as anti-consumer.
"We're not for the status quo," Talbott said. "We're for protecting consumers. The question is, what's the best way to do it?"
Administration officials and others who support a new agency say they hold the upper hand in the current debate.
"I don't think it's a surprise that big banks and institutions that benefited from the status quo want to keep it that way," Michael Barr, the assistant Treasury secretary for financial institutions, said last week. "I think it's a horrible position for them to be in. I don't envy them."
The wave of lobbying efforts this week is the opening round in what promises to be a long fight. Even if a bill emerges from the House committee in the coming weeks, the full House would only take up the legislation after it reconvenes in September. Later in the year, the debate is expected to move to the Senate, where financial lobbyists predict that they have a better chance of finding allies and winning concessions.
But just because a bigger battle is yet to come, it doesn't mean business lobbyists are writing off this one.
"A lot of intellectual markers will be laid down in the next 30 days," said Steve O'Connor, senior vice president of government affairs at the Mortgage Bankers Association. "Momentum will start to form behind different ideas. You want to engage in the education process early on. It's important to be part of the discussion."