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WASHINGTON, D.C. — Auto dealers and insurance companies sought help from the Senate on Monday to ease the reach of financial regulations, part of a last lobbying thrust as the House and Senate assemble legislation for President Barack Obama’s signature.
Car dealerships were looking for the Senate to instruct House and Senate negotiators to exempt their loan-assembling operations from consumer regulations. Insurance firms were looking for different rules from banks when it came to trading in the markets with their own accounts.
These efforts come even after the Senate passed its version of a broad rewrite of financial regulations last week. The House passed its version in December and the two bill now must be reconciled, providing a closing lobbying opportunity for the financial sectors.
The votes Monday would not be binding on the House and Senate negotiators, but they could influence the talks as lawmakers decide what to keep and what to jettison in each bill.
House Financial Services Chairman Barney Frank, D-Mass., who will chair the House-Senate panel that will reconcile the bills, has expressed hope that the final legislation in general is tougher than the bill that passed the House in December.
The political environment may well lend itself to stricter rules, removing or narrowing the House’s exceptions for certain businesses from consumer oversight and regulation of the complex securities known as derivatives.
While banks in the end will no doubt face greater restrictions, some compromises achieved over the next few weeks could well tilt in their favor simply by hewing closer to existing law or giving regulators more discretion to devise and enforce rules.
At the same time, House-Senate negotiations often are influenced by the White House, and administration officials have made it clear they are not going to be standing on the sidelines.
One area of special interest to the White House has been auto dealers and the loans they assemble for car buyers. The administration wants them to fall under the jurisdiction of a proposed consumer financial protection agency or bureau.
The administration has employed the Pentagon to make its case, arguing that enlisted members of the services are especially prone to auto loan schemes.
The auto dealers, powerful figures in their local communities, have argued that they are simply intermediaries who originate the loans for other lenders to service and administer. The House bill already contains an exception for car dealers. The Senate did not vote on an amendment to exclude the dealers from regulation for Republican tactical reasons aimed at keeping a Democratic amendment on banks from reaching the floor.
Auto dealers may well have more clout than even powerful automakers on Capitol Hill; while automotive factories are scattered here and there around the country, it’s hard to imagine a House member without a car dealership in his or her district.
Car dealers made at least $3 million in campaign donations at the federal level this election cycle, with more than two-thirds going to Republicans. In the 2008 election, they gave at least $11.9 million, steering more than three-quarters to the GOP, according to data compiled by the nonpartisan Center for Responsive Politics. Automakers, by comparison, gave $2.6 million in the 2008 election, split almost evenly between Democrats and Republicans, and at least $340,000 this election cycle, with 58 percent going to Democrats.
Bank lobbyists are still working to remove a sweeping Senate provision that would force large banks to spin off their entire derivatives business into separate subsidiaries. In looking to remove that language, the industry has allies in the administration and among the government’s banking regulators. They say such a strict requirement could drive derivatives into an unregulated sector of the market.
But that measure is complicated by politics. It was inserted by Sen. Blanche Lincoln, D-Ark., the chairwoman of the Senate Agriculture Committee. She is facing a tough re-election and is battling claims that she is too friendly to banks. She is in a runoff against the more liberal Arkansas lieutenant governor, Bill Halter. That contest is June 8.
