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Shelby: Bank Profits Always Trump ‘Consumer Finance Whatever’

By Pat Garofalo  

"Shelby: Bank Profits Always Trump ‘Consumer Finance Whatever’"

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The American Bankers Association was in Washington this week for a governmental relations summit, giving 900 bankers ample opportunity to run around Capitol Hill trying to talk lawmakers into watering down financial regulatory reform. “We have a lot of work cut out for us,” said David Bochnowski, an Indiana bank executive. “Our job is to have an impact on the Hill.” “We need to shape what’s in and what’s out of any reform legislation,” Michigan banker Art Johnson added.

During the summit, the assembled crowd of bankers has received plenty of support from Republican lawmakers. “You’re all going to be lobbyists today. I know that’s a dirty word, but that’s what you’re doing,” said House Minority Leader John Boehner (R-OH), adding, “don’t let those little punk staffers take advantage of you and stand up for yourselves.”

One of the aspects of financial reform that the banks are most opposed to is the creation of a new entity charged with protecting consumers. And at the summit, Sen. Richard Shelby (R-AL), the Senate Banking Committee’s ranking member, told the assembled bankers exactly what they wanted to hear — that bank profits should always take priority over “consumer finance whatever“:

“Safety and soundness trumps everything,” Shelby said to loud applause. “It trumps the consumer finance whatever.”

This sounds exactly like Comptroller of the Currency John Dugan’s pronouncement this week that it’s “backwards” to put consumer protection above bank profits. These are really blatant examples of where conservatives are regarding regulation: they believe that financial institutions should be able to do literally anything they want, so long as it’s profitable. In fact, Shelby promised the bankers that “if there were 59 Senate Republicans ‘you wouldn’t have to worry‘ about a new consumer agency.”

And Shelby’s line about safety and soundness is precisely what the bankers wanted to hear. In fact, it was the line they were using themselves as they lobbied lawmakers to ditch the consumer protection agency, as this report from CNBC shows. Watch it:

Of course, if the bankers and their Republican allies truly believe that the banking industry can only make money by ripping off consumers, that’s a sorry sign. As Stephen Lubben put it at Credit Slips, “did toaster companies go out of business when the Consumer Product Safety Commission stopped letting them sell exploding toasters? I guess the ones who couldn’t make it selling legitimate toasters did — but the Senator can’t really be saying that America’s banking industry is like a shoddy toaster company, can he?”

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