Bank Lobbyists Hired by Congress to Oversee Banking Regulations

Influence peddlers have taken key congressional jobs.

A banking customer withdraws money from a ATM machine in Santa Fe, New Mexico.
A banking customer withdraws money from a ATM in Santa Fe, N.M. Photo: Robert Alexander/Getty Images

During the State of the Union last week, President Joe Biden asked Congress to pass legislation cracking down on hidden and often predatory fees charged by banks in the form of overdraft and late penalties, adding heft to regulatory action launched by his administration last year.

But the legislation may not stand much of a chance with a Republican House, where the Financial Services Committee, which oversees banking policy, is now chaired by Rep. Patrick McHenry, R-N.C., and staffed by former lobbyists.

Over the last few weeks, McHenry’s hires to run the committee are mostly former lobbyists who served the very banks, lenders, and brokerages seeking to combat Biden regulations. Staffers often play a pivotal role in determining the strategy and policy behind any change in the law.

Larry Seyfried, just months ago, worked as a registered lobbyist and vice president of congressional relations at the American Bankers Association, the bank trade group that is leading the charge against Biden’s crackdown on junk fees. Seyfried was hired by McHenry as the director of member services and coalitions for the House Financial Services Committee.

The American Bankers Association, earlier this week threatened to file a lawsuit to stop the Biden administration from capping certain bank fees at $8 each, claiming such regulations would increase borrowing costs and force banks to cut services to certain types of customers. McHenry, in turn, has threatened to use his new perch on the committee to investigate the primary regulatory agencies charged with enforcing the fee mandate, such as the Consumer Financial Protection Bureau. Several GOP lawmakers on the committee have proposed legislation to rein in the CFPB’s authority.

The committee also recently hired Will Anderson, a former lobbyist for the Business Roundtable, a trade group that represents Wells Fargo & Co., Goldman Sachs Group Inc., Bank of America Corp., and other large financial corporations. Anderson will serve as the staff director for the subcommittee on capital markets, which oversees the Securities and Exchange Commission and other regulatory agencies.

Last year, disclosures show Anderson lobbied Congress and the SEC on behalf of the Business Roundtable on a variety of financial regulations. Now he will work from the inside.

Other committee staffers have similar potential conflicts of interest. Kathleen Palmer, a GOP congressional staffer for the Subcommittee on Financial Institutions and Monetary Policy, is a former lobbyist for JPMorgan Chase & Co. Matt Hoffmann, the staff director of the committee for McHenry, previously worked as a lobbyist for the BGR Group, a large firm with many clients with interests directly impacted by the committee, including Credit Suisse Group and MetLife.

The so-called reverse revolving door, in which lobbyists for highly regulated interest groups temporarily take jobs in government with influence or oversight over policy impacting their former employers, is a vexing issue.


As the Revolving Door Spins, Lobbyists Hired for Top Jobs in Congress Yet Again

Policymakers need expertise to devise thoughtful policy, and former lobbyists are often well equipped to understand highly technical issues for specialized industries. David Hanke, the recently hired director of the new select committee to probe competition between the U.S. and China, for instance, previously worked as an attorney advising on semiconductor issues, a key concern shaping U.S.-China tensions. He was also registered to lobby.

But the burrowing of corporate lobbyists deep inside powerful roles in the congressional and federal bureaucracy also presents the potential for entrenched corruption.

The advantages for burrowing are so high that many corporations with a stake in government policy write the incentives into employment contracts. Banks and defense contractors extend special bonuses as a reward for executives to leave and enter government. In public service, they are well positioned to reward their former corporate employers. After a stint in government, most return to the private sector.

For example, Northrop Grumman, the defense giant, paid out bonuses to executives who went on to work as congressional staff. One former Northrop Grumman lobbyist received up to $450,000 in bonus and incentive pay as he left the firm to work on the committee that oversees Pentagon policy. Former Northrop Grumman executives worked to advocate for higher military spending and for lawmakers who specifically encouraged spending on Northrop Grumman-built weapons systems, including the RQ-4 Global Hawk drone.

Newly hired congressional staff across the aisle present other potential conflicts of interest. Sen. Tom Carper, D-Del., the chair of the Senate Committee on Environment and Public Works, recently announced the lead staffer on the committee will be Courtney Taylor, who previously worked as senior vice president at the lobbying firm ML Strategies. Disclosures show Taylor has previously lobbied for a range of clients, including the Environmental Defense Fund, Shell, and the American Wood Council, a trade group for the wood products industry.

In Congress, the most important staffer for each member is the chief of staff, who oversees each lawmaker’s operations. Tucker Knott, the new chief of staff to Sen. Ted Budd, R-N.C., previously worked as a lobbyist for Pfizer. Hank Dixon, the chief of staff to newly elected Rep. Sydney Kamlager, D-Calif., comes to the job after working as vice president of corporate affairs at oil firm Talisman Energy and before that, as a D.C. lawyer for Shell. Rep. Dan Meuser, R-Pa., recently hired Tim Costa as his chief of staff. Costa previously worked as a lobbyist at the firm Buchanan Ingersoll & Rooney PC for several health care clients, including Walgreens.

As Truthout reported, several former fossil fuel lobbyists have been hired for key committees overseeing energy and land use policy. Rep. Bruce Westerman, R-Ark., who controls the gavel of the Natural Resources Committee, hired a former lobbyist for Taylor Energy, the Louisiana firm responsible for an oil spill in the Gulf of Mexico. Rep. Pete Stauber, R-Minn., also a member of the same committee, hired Shawn Rusterholz, a former lobbyist for the American Petroleum Institute, a trade group for the oil majors such as Exxon Mobil Corp. and Chevron Corp.

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