Charts: Here Is How Banks Get What They Want


The Dodd-Frank financial reform act of 2010 turns three years old this month. But because of intense Wall Street lobbying, only about a third of the provisions it requires have actually been made into rules by Wall Street regulators, and many have gaping loopholes designed by industry lobbyists. A new analysis by the Sunlight Foundation, a non-profit that advocates for government transparency, starkly illustrates why regulatory agencies are so swayed by industry: over the past three years, those whose job it is to police Wall Street have met with big banks 14 times more often than pro-reform groups to discuss proposed Dodd-Frank rules. 

The Sunlight Foundation reviewed three years worth of meetings that banks, industry lobbyists, corporations, and financial reform advocacy groups had with the Commodities Futures Trading Commission (CFTC), the Treasury Department and the Federal Reserve, and found that these regulators had met 2,118 times with financial institutions, and only 153 time with pro-reform groups. Here’s what that looks like, via the Sunlight Foundation:

And here is how those meetings break down by agency:

Goldman Sachs, the top meeting-goer, had 222 consultations with regulators over the past three years. JPMorgan Chase met with the agencies 207 times, and Morgan Stanley 175 times. The topics at those meetings were most likely to be derivatives (financial products with values derived from from underlying variables, like crop prices or interest rates), which Dodd-Frank brought under regulation for the first time, and the Volcker rule portion of the law, which would limit risky trading by banks.

From the Foundation’s report: 

Regardless of how we cut the data, the same striking pattern holds: financial institutions, especially the big banks, are dogged and ubiquitous. Pro-reform groups are stretched thin. Lawyers and lobbyists are also active participants, primarily representing the banks. A number of other corporations show up frequently, most commonly in the energy and agro-business sectors, where derivatives and other market hedges are common practice.

Because of the barrage of industry lobbying, “Regulators themselves have become overly concerned about finalizing rules,” CFTC commissioner Bart Chilton told Yahoo News recently. “Over-analysis paralysis, fears of litigation risks, and the lack of people-power have all contributed to the slowdown.”

Strong-arming regulators behind the scenes is just one tactic Wall Street uses to get its way. Litigation, and new legislation to gut the 2010 financial reform law play a part too. As a result, Chilton says, “Much of Dodd-Frank is dying on the vine.”

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You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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