Financial Crisis Keeps K Street Busy
Roll Call Staff
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When it comes to new regulations on banks and financial services institutions, the American Bankers Association’s top Congressional lobbyist, Floyd Stoner, said his group will keep a watchful eye on Capitol Hill.
“We are heavily regulated,” Stoner said. “At the same time, we appreciate the fact that Members of Congress have noted that in the subprime housing situation it wasn’t federally regulated insured depositories that caused the problem.”
Many industry lobbyists say they want changes that would allow for a uniform federal regulator, especially in insurance, which is currently regulated state by state.
“From my perspective, one of the most important issues is an optional federal charter for life, large commercial and property casualty insurance,” said Doug Bennett, vice president of federal and international affairs for Liberty Mutual.
“The products that we now sell tend to be more national in scope,” Bennett explained. “There is no reason if you’re a large commercial developer — with properties in New York, New Jersey and Washington — that they should be approved by three different regulators. ... It’s kind of a nightmare.”
Steve O’Connor, senior vice president of government affairs for the Mortgage Bankers Association, said that next year Congress will likely need to address uniform national standards to prevent abusive lending. “Everybody’s asking, ‘How do we prevent this from occurring again?’” he said. “And that’s going to come back to things like uniform national standards. ... We want one set of rules for the entire marketplace.”
O’Connor said that as part of any reform efforts, Congress would have to strike a balance between consumer protections and allowing consumers access to credit.
“You always have the potential for an overly broad overreaching bill that would unduly restrict credit options,” he said. “So that’s a potential concern.”
He’s not the only one with such a worry on his mind as the 111th Congress approaches.
Jerry Howard, executive vice president and chief executive officer of the National Association of Home Builders, said that he, too, is worried about legislative overreactions.
“Clearly Congress and the regulators are going to be focused on the financial sector as a whole and some of the practices that have been getting a lot of press, such as the subprime arenas,” Howard said. “And I think it’s actually necessary for Congress. What we’re going to have to do is guard against an overreaction.”
While the 111th may be still six months away, Steve Bartlett, president and CEO of the Financial Services Roundtable, said his group has already outlined its 2009 agenda. At the top of the items Bartlett’s group plans to push for is regulation reform, followed by an optional federal insurance charter.
The group also supports maintaining the current tax rate on capital gains and dividends, which some Democratic proposals seek to increase.
“We’ll have challenges,” acknowledged Bartlett, himself a former Republican Congressman from Texas. “Like all legislative sessions, it’ll be like making sausage: You don’t want to see it in process, but it generally comes out well.”
Not all of the financial services groups will focus on the housing and lending crisis.
Tim Ryan, CEO of the Securities Industry and Financial Markets Association, said that SIFMA’s priority over the next two years will be tax and budget issues. The group opposes new tax increases, changes to capital gains rates and the expiration of the Bush tax cuts.
“We expect that to take a lot of our time and energy,” he said.
Schumer Advocates for Many on Panel
Nov. 16, 12 a.m.
As Senate Majority Leader, Lyndon Johnson once said of the Joint Economic Committee, “It’s as useless as tits on a bull.” But as that panel’s chairman during the 110th Congress, Sen. Charles Schumer (D-N.Y.) seized the opportunity to elevate the traditionally low-profile post to the forefront of shaping policy. Read Full Article
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