While Wall Street financial firms have been lobbying furiously against regulatory reform, other big businesses have been working behind the scenes to water down the bill or insert loopholes that would exempt their industries.

Credit card companies, auto dealers, community banks, investment firms, hedge funds and student loan firms all have a stake in the game. And all have descended on Capitol Hill in an effort to shape what is set to be the most sweeping financial reform since the Great Depression.

“Their basic complaint is that the reform bill would make credit and other financial risks more expensive and harder to get — in other words, the bill is doing exactly what it is supposed to,” The Washington Post’s Steve Pearlstein writes.

The legislation would provide the Treasury Department with the power to wind down failing banks, forcing them into bankruptcy instead of using taxpayer dollars to save them. Banks would also have stronger capital requirement standards and higher deposit insurance premiums.

The bill would establish a consumer protection agency, which would prevent banks from arbitrarily raising interest rates on credit cards, among other things.

The highly controversial derivatives market would also be regulated. Even some Main Street firms, which are end-users of derivatives, such as Caterpillar and Exxon are fighting stronger derivatives regulations.

Overall, the lobbying has been intense. Treasury Secretary Timothy Geithner said that Wall Street has spent $1 million a day lobbying against the bill. Presidential economic advisor Larry Summers said that the those looking to defeat or neuter the bill have four lobbyists for each member of congress.

The U.S. Chamber of Commerce has spent an astounding $30.9 million on lobbying in the first quarter of the year, much of it to defeat financial reform. The business lobby also said that it has sent out nearly 50,000 letters to lawmakers in the past three weeks. Wall Street giant Goldman Sachs spent $1.2 million lobbying in the first quarter of the year, a 70 percent increase from last year.

When flashing around that kind of money, it’s not hard to get an audience. It’s even easier when you have a cozy relationship with those that you are lobbying. According to the Lubbock Avalanche-Journal, 120 former senators, congress members and ex-committee staffers have worked for banks, investment firms and other financial institutions lobbying their former colleagues against the bill.

“Opponents have tried to convince the American people that these reforms will hurt Main Street or help Wall Street,” Geithner said. “Those arguments won’t work because they aren’t true.”

Print PDF