Wall Street Reform Spurs Hiring Spree on K Street
The nation’s banks seem to have received one powerful message from this year’s financial services reform measure: Get more help on K Street.
Banks and other financial companies and associations are making mega-personnel moves following enactment of the historic financial services reform law this summer. Some smaller and midsized banks are looking to hire in-house lobbyists for the first time, while others that have long been players in the nation’s capitol want to increase their influence with Congress and the executive branch.
“Congress is driving this trend,” one high-level financial services lobbyist said. “Some regional banks realize now that what happens in Washington affects Main Street. The non-Wall Street banks want to tell their own story.”
HSBC Bank, TD Bank and PNC Bank are among the companies looking to expand their voices in Washington, D.C., according to downtown sources. Not to be left out, hedge funds also want to increase their presence.
“A lot of these institutions see [that] big banks have a presence here and say, We better have something, too,'” a Democratic financial services lobbyist said.
In addition, the American Bankers Association is hiring a new top executive because its longtime president and CEO, Ed Yingling, is leaving. Job openings and changes are also happening at the Securities Industry and Financial Markets Association, New York Life Insurance Co., Ameriprise Financial and others.
Liz Varley, managing director of government affairs at SIFMA, is going in-house with New York Life, where she will be vice president of government affairs.
HSBC offers an example of a bank with a long-standing inside-the-Beltway presence that is looking to beef up its operation. Denis O’Toole, executive vice president of government relations, plans to retire in April after 18 years with the bank. He said HSBC is not only looking to fill his slot but is planning to take a broader look at its advocacy operation.
“Clearly, financial regulatory reform has changed the landscape of the business,” O’Toole said. “We may also be thinking about how a global financial services company gets more engaged in Washington.”
It’s unclear how quickly the banks will make hiring decisions. The K Street job market has stalled as the business community awaits the outcome of the November elections.
However, some institutions may not delay in bringing on help as the Obama administration begins implementing the law shepherded through Congress by Senate Banking Chairman Chris Dodd (D-Conn.) and House Financial Services Chairman Barney Frank (D-Mass.).
“I think a lot of it is that most banks realize … there still is a lot more work that needs to get done on the implementation,” the Democratic financial services lobbyist said. “There’s a strong interest in the oversight of Dodd-Frank going forward.”
Banks are particularly focused on the upcoming regulatory environment. President Barack Obama on Friday named Wall Street watchdog Elizabeth Warren as his special adviser tasked with setting up a new agency to keep a close eye on financial institutions.
“There will be a big pivot to the agency level,” said Steve Verdier, executive vice president of Congressional relations at the Independent Community Bankers of America.
But these lobbyists won’t ignore Capitol Hill.
Banking lobbyists are already preparing to work with Members next year on financial services issues. Some lawmakers have indicated a willingness to take on reforming government-sponsored enterprises Fannie Mae and Freddie Mac. And K Streeters said they expect Congress to look at mortgage-practice provisions.
“There may be a number of places in the [mortgage] area that need to be revisited because if you look at the legislation, there was probably as much or more specificity in the mortgage practices area than anywhere else,” Verdier said.