naked capitalism

By Tim Duncan, Chairman of American Business Leaders for Financial Reform

The Wall Street Journal tells us tonight that the banking industry has agreed to push for regulation after Monday’s White House meeting:

Chief executives of the largest U.S. banks acknowledged Monday the “disconnect” between their expressed support for re-regulating financial markets and the work of their lobbyists to weaken any new rules.

The executives pledged during a White House meeting with President Barack Obama that they would personally intervene on behalf of the legislation.

This is a novel and creative take on reality. For instance, in July, JP Morgan CEO Jamie Dimon pushed back aggressively against reform. It is preposterous to claim that highly-paid lobbyists went on auto pilot and took more aggressive positions than their clients wanted and endorsed.

Those on the receiving end did not buy it:

Some of the CEOs said their lobbyists had taken stronger stands than they would have wanted, an assertion met with raised eyebrows on Capitol Hill. House Financial Services Committee Chairman Barney Frank (D, Mass.), chief architect of financial-overhaul legislation in that chamber, said in an interview he was “highly skeptical.”

Once again, the banks are talking as if they support reform but doing everything they can behind the scenes to undermine it. Lest anyone buy into their new PR tactic – just take a look at what Jamie Dimon had posted on his bank’s web site Monday evening:
Supporting Financial Regulatory Reform:

As CEO and Chairman Jamie Dimon has written in the Wall Street Journal and the Washington Post, we agree with the need for better financial regulation, including regulatory consolidation, systemic risk regulation, ending too-big-to-fail, better consumer protection, and more transparency in the derivatives markets.

The details matter, and the stakes are simply too high and the consequences too far-reaching to do this hastily and poorly. While we agree with many of the proposals, we share concerns with others that some regulatory proposals could restrict lending by banks, which will hinder economic growth and job creation.

Clarity and consistency build confidence and are critical to companies that are looking to create jobs, invest and expand their businesses.

These are pretty much the talking points and message of the bank lobbyists – that the Consumer Financial Protection Agency will cause credit to be restricted and interest rates to rise. And then the same old “We’re all for reform; just not now and not any reform that is being proposed.” The others that Jamie Dimon “shares his concerns” with at this point are the American Bankers Association, Chamber of Commerce and the Republicans given that it is exactly the same talking points and message we hear from these folks.

This press release so quickly after the meeting at the White House today would seem to have no apparent purpose other than to make it clear to the other bankers and lobbyists that nothing has changed with regard to the industry’s passive-aggressive battle against the CFPA. It also appears to be a rather harsh metaphoric middle-finger to the White House given that it is posted less than 24 hours after the President personally asked for Mr. Dimon’s support.

The industry’s strategy so far is to say they are supportive of the CFPA in private (when speaking to the admin or people supporting the CFPA), avoid saying anything publicly or on the record and then have the ABA, Chamber and individual lobbyists oppose the legislation in every way possible behind the scenes. If today’s meeting at the White House was to get the industry to publicly support regulation – it would appear that just the opposite has taken place.