As the nation’s economy continues to lurch along, lobbying firms that represent America’s banks are having a banner year. The Huffington Post writes today about a study by the Charlotte Observer:
The five banks that spend the most on lobbying have boosted their lobbying outlays by 12 percent in the first three quarters of 2011, compared to the same period last year…
The report shows that commercial banks have spent almost $47 million this year on influencing the political process, up from $42 million in 2010. The financial industry as a whole spent more than $100 million lobbying Washington as of August 1, 2011, according to the New York Times.
The increased spending comes as government agencies draft rules mandated by the Dodd-Frank financial reform bill passed in 2010. Banks are already seeing the fruits of their efforts to influence the process:
The bill, which lawmakers passed in response to the 2008 financial crisis, includes provisions regulating a variety of commercial banking fees, such as overdraft and debit card charges, in addition to rules on certain types of trading and other types of financial activities.
Many experts claim that the Volcker rule — a regulation [in the reform bill] aimed at curbing proprietary trading — is so watered down it bears little resemblance to the former Federal Reserve Chairman Paul Volcker’s original proposal. A handful of Occupy Wall Street protesters recently launched “Occupy the SEC” in direct response to what they perceive as the weakening of the Volcker rule.
At the same time, banks are coping with some of the lost revenue caused by Dodd-Frank by raising hidden fees to consumers. Again, the New York Times:
Need to replace a lost debit card? Bank of America now charges $5 — or $20 for rush delivery.
Deposit money with a mobile phone? At U.S. Bancorp, it is now 50 cents a check.
Want cash wired to your account? Starting in December, that will cost $15 for each incoming domestic payment at TD Bank.
Facing a reaction from an angry public and heightened scrutiny from regulators, banks are turning to all sorts of fees that fly under the radar. Everything, it seems, has a price.
Americans are fighting back by taking their business elsewhere. Between the time Bank of America proposed and then retracted a planned $5 monthly charge for the use of a check card, more than 650,000 Americans opened new accounts at credit unions. Only 600,000 new credit union accounts were opened in all of 2010.
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