Over at The Stash, Noam Scheiber reported that the financial services industry is trying to kill the Obama administration’s proposed consumer protection agency in the same way that the Clinton health care plan was defeated in the 90′s — by raising the spectre of government intrusion into family decisions:
A knowledgeable industry source confirmed yesterday that, as part of their efforts to roll back the Obama proposal for a consumer financial products regulator, several lobbying organizations representing banks are developing a “Harry and Louise”-style ad campaign, after the commercials that targeted the Clinton healthcare plan in the early ’90s. The ads will emphasize the intrusiveness of the proposal–of the government “telling you what you can and can’t buy,” according to the source.
The Economist’s Free Exchange properly reminded everyone that the banks are being kept afloat “with trillions of dollars in direct aid and loan guarantees, all because the industry nearly destroyed itself trading poorly understood new financial products.” But that didn’t stop them from lobbying to defeat cram-down legislation in the Senate, and it has evidently not dimmed their enthusiasm for lobbying against this new agency either.
Of course, the notion that a consumer protection agency will tell families what they can or can’t buy is nonsense, but that’s the message that the banking industry feels will resonate, and Republicans have wholeheartedly accepted that framing. And the ads are only part of a wider, multi-million dollar lobbying effort. As the Washington Post reported today, in addition to working the grass-roots angle, financial services lobbyists will be “beating a path to Capitol Hill this week” to make their case directly to lawmakers:
A coalition of business representatives, who are skeptical about a proposed Consumer Financial Protection Agency, has met repeatedly in recent weeks to hone their argument that a new regulator could cause more harm than good and to strategize about which members of Congress might be sympathetic to their cause. These opponents of a new agency have begun visiting members of the House Financial Services Committee, which plans to take up the proposal in the coming weeks, and are putting a top priority on centrist Democrats.
“You want to engage in the education process early on. It’s important to be part of the discussion,” said Steve O’Connor, senior vice president of government affairs at the Mortgage Bankers Association. Evidently the banking industry feels that education and being “part of the discussion” entails fearmongering about big government choosing your mortgage or your credit card for you.
Tim Fernholz has more.