Lobbyists are shifting into overdrive today as Congress formally begins its attempt to smooth out differences between the House and Senate versions of the Wall Street bill.
Financial services trade associations, big banks and a slew of other companies that provide financial products are blanketing Capitol Hill trying to get a last word in.
Although this will be the first public conference in a long time, the real negotiations aren’t expected to happen in front of the cameras. And the real lobbying will begin once behind-the-scenes negotiations between Senate and House conferees start in earnest.
“Key House and Senate Members began discussions to narrow potential conference issues even before the Senate bill was passed,” said Democratic lobbyist Paul Equale of Equale & Associates. House Financial Services Chairman Barney Frank (D-Mass.) “has said that real negotiations will occur in private, where human beings work.”‘
“This conference will be an inside game under enormous outside political pressure,” Equale added.
With the bill shaping up, several lobbyists said they are pushing for marginal changes on derivatives, proprietary trading, corporate governance and consumer protection provisions rather than wholesale rewrites. Whether K Street can translate its calls for modifications to the bill into meaningful legislative changes is unclear.
“There’s a lot of checking the box,” one Republican financial services lobbyist said of activities so far. “Corporate clients and trade associations are covering their bases.”
While some conferees may be inclined to make changes to the stringent derivatives language put forth by Sen. Blanche Lincoln (D-Ark.), nobody wants to be seen as shilling for the banks.
“It’s a delicate dance right now,” one senior Democratic lobbyist explained. “There aren’t many places to go for cover.”
The lobbyist also said some lawmakers are concerned with the appearance of even meeting with K Street interests or banking industry senior executives during negotiations.
Frank, in fact, postponed a K Street fundraiser scheduled for today. Spokesman Steven Adamske said a lack of time was the reason for the cancellation.
“Our time is rapidly evaporating,” Adamske said. “We are canceling things left and right.”
He also said, “the optics of a fundraiser where there could be members of the financial services industry is not wise to do.”
Lobbyists declined to name specific Members who refused to meet with K Streeters on financial regulatory reform but said they were focused on getting meetings at the staff level and with lawmakers who have the ear of the conferees as well as House and Senate leadership.
On the House side, K Streeters are focusing on nonconferees such as Reps. Scott Murphy (D-N.Y.) and Melissa Bean (D-Ill.), who championed efforts on derivatives and federal pre-emption for banks.
“If you have an issue championed by a Member who is not in the conference, those Members are going to continue to be champions,” said one Democratic lobbyist who represents several clients affected by the bill.
“As long as they can deliver a block of votes, they are relevant,” he added.
Lobbyists are also focusing their attention on Republican Senators such as Susan Collins (Maine) and Scott Brown (Mass.) who voted for the bill and Chuck Grassley (Iowa), who has been in talks with the White House over certain provisions.
Despite the strategy of President Barack Obama and Democrats of vilifying financial services lobbying to help move the bill, K Street isn’t staying on the sidelines.
“It isn’t stopping anybody from getting anything done,” one financial services industry executive said.
While much of the lobbying on the bill is taking place behind the scenes, the interchange, or “swipe,” fee lobbying debate has turned into a public relations battle.
The three top executives of trade associations for the credit unions and community banks held a joint press conference Wednesday for the first time in the groups’ history. Credit Union National Association President Dan Mica, National Association of Federal Credit Union President Fred Becker and Camden Fine of the Independent Community Bankers of America railed against a provision sponsored by Senate Majority Whip Dick Durbin (D-Ill.). It would give the Federal Reserve more power to negotiate the rates that banks require merchants to pay when customers use debit and credit cards.
“We are under attack by mega retailers so that they can pocket more money,” Fine said. “This is about the big getting bigger at the expense of the small.”