With what little free money banks still have, they’re investing it in lobbyists in Washington.
WSJ: With as few as 72 hours before Congress votes on a federal financial-markets rescue, the financial industry has launched a ferocious effort to shape key provisions, in a fight that could yet stall the bill.
Lobbyists and financial-services executives are working deep connections within the administration to ensure as many institutions as possible benefit from a $700 billion federal mechanism to buy distressed assets, then sell them off in better times. In a particularly controversial move, they also oppose proposals by Democrats in Congress to provide mortgage reductions for homeowners facing bankruptcy. Bankers say such a move would raise rates for mortgage seekers, as banks factor in the possibility that a loan would be restructured in court.
“There’s no time for subtlety,” says Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, chief executives of the nation’s most powerful banks, brokerages and insurers and a leader in the lobbying. “This is the Super Bowl and New Year’s Eve of legislation.”
But even as they press for changes that could determine which businesses survive the crisis, some lobbyists worry that questioning the $700 billion rescue plan sets up the industry for a public — and regulatory — backlash.
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