Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Bank of America Corp (BAC), Morgan Stanley (MS): Why Bank Lobbyists Have Such Success Swaying Congress

Most people are aware that Washington, D.C. is awash in lobbyists, people whose jobs, whether paid or unpaid, entail pressing their particular company’s interests in the hallowed halls of the U.S. Congress. It is still surprising, though, when we hear just how influential they really are, molding and often crafting the laws of the land that touch us all.

And, so it is with financial reform legislation. A new report from the Sunlight Foundation, a non-profit entity that promotes transparency in government, crunched some numbers recently and came out with some sobering results: The banking sector’s heavy lobbying efforts have had a real effect on the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, slowing the pace of reform. For example, the study notes that banks’ focus on the Volker Rule has resulted in a two-year delay in the completion of the law’s wording.

How have they made such great strides? It seems there are two major facets to their battle plan, both of which are working beautifully.

1. Bank representatives overwhelm congresspersons with their presence. Simply put, banks are involved in lobbying activities to a much higher degree than other groups, such as those pushing a pro-reform agenda.

Bank of America Corp (NYSE:BAC)

Particularly when discussions revolving around the derivatives markets were in full swing, banks like Goldman Sachs Group Inc (NYSE:GS) , Morgan Stanley (NYSE:MS)Bank of America Corp (NYSE:BAC) , and Citigroup Inc (NYSE:C) were on task, participating in anywhere from 134 to 222 meetings with the Federal Reserve, the Treasury Department, and the Commodities Futures Trading Commission.

To put this in perspective, Sunlight notes that financial institution representatives attended 90% of the meetings with the Federal Reserve, nearly 83% of those at Treasury, and almost 75% with the CFTC. Comparably, a little over 3% of the advocacy groups met with the Fed, about 14% with Treasury, and only slightly more than 4% attended the CFTC meetings.

2. Financial lobbyists are very helpful, assisting with the crafting of legislation whenever possible. Back in May, there was a brouhaha when The New York Times published a piece describing how Citigroup Inc (NYSE:C) and other banking lobbyists penned the majority of a bill that exempted from federal scrutiny certain derivatives trades that occurred between banks.

Shocking, perhaps, but not really big news. The article noted, much as the Sunlight study does, how financial lobbying had increased over the previous three years, specifically regarding Dodd-Frank. Indeed, this workshop hosted by the American League of Lobbyists promises, for a fee, to teach participants how to use “the legislative drafting process to achieve your advocacy goals,” and the secrets to “securing the right language in a bill or amendment.”

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.