During the (ultimately failed) effort to pass cram-down legislation through the Senate in April, Republicans were pressuring bailed-out banks to not compromise on the bill. Today, in a disturbingly thorough rehashing of just how much power the banks wielded during that debate, the New York Times provides the identity of one of these senators:
Senator Jon Kyl, the Arizona Republican leading the charge against the bankruptcy change, told bankers there would be consequences if they dealt with the Democrats. According to an April 20 e-mail message between industry officials in touch with Mr. Kyl, he told them “not to make a deal with Durbin and then come looking to Republicans when they need help on something like regulatory restructuring.”
In an interview, Mr. Kyl, the Senate’s No. 2 Republican, did not recall whether he had made the statement, although he remembered telling bankers that he could not defend them if they did not first defend themselves. “I very pointedly said, ‘Don’t make a deal with Durbin on this. You don’t need to. If he has the votes he wouldn’t be dealing,’ ” Mr. Kyl recalled.
As I noted at the time, Kyl was taking a stand against cram-down — a bill aimed at helping troubled homeowners — just as Arizona’s foreclosure rate was spiking. This New York Times report shows that not only was Kyl pushing the banks on cram-down, but he was doubling down and promising to support them on regulatory reform, which is one of the next issues that the Obama administration plans to tackle, much to the banks’ chagrin.
Kyl followed up his performance on cram-down by being one of just five senators to vote against the Credit Cardholders’ Bill of Rights, another bill of which the banks weren’t very fond. In the last five years, Kyl has received more than $1 million from the banking industry and securities firms.
Rep. Colin Peterson (D-MN) said this week, “I will tell you what the problem is — [the banks] give three times more money than the next biggest group. It’s huge the amount of money they put into politics.” And in the first three months of this year, just four of the banking industry’s top trade groups spent nearly as much on lobbying “as they did in all of 2001.”
Noam Scheiber has more.