A coalition of state and student loan professionals announced a campaign this week to protect choice and services in federal student loans. The initiative is a reaction to a bill passed by the House last month to convert the federally subsidized private student-lending industry into a direct loan program run by the Education Department.
According the campaign, up to 35,000 jobs will be lost if the House bill becomes law. The supporters of the initiative are also concerned about loss of choice, competition and value-added services such as financial literacy education.
As an alternative to the House bill, which would save up to $87 billion according to the Congressional Budget Office, ProtectStudentChoice.org supports the Community Proposal. Developed by the student loan industry, the Community Proposal would preserve private banks' ability to originate federally-guaranteed loans and generate similar savings, albeit less than the House version.
Continue reading Student Loan Industry Advocates For Choice.
The U.S. Chamber of Commerce, which seems poised to join the lobbying fight against the Obama administration proposal for a new Consumer Financial Protection Agency, hosted a meeting on Tuesday with about two-dozen large financial services groups to discuss a possible coalition effort.
The chamber meeting included lobbyists from such powerhouses as the American Bankers Association, the American Land Title Association, the Financial Services Roundtable and the American Financial Services Association. The AFSA presented new polling data on the proposed agency that suggested the kinds of messages that could be used against it. In the last few weeks, the AFSA has hosted a few meetings with some of the same trade group lobbyists to lay the groundwork for a lobbying blitz aimed at thwarting the proposed agency, which industry fears would have a very broad regulatory reach.
"Everybody's working towards the shared goal to slow this down," said one lobbyist familiar with the meeting. Right now, he added, everyone would "vote to kill it." Earlier on Tuesday, about a dozen financial services lobbyists from some of the same groups went to Capitol Hill for a meeting with key staff of Rep. Spencer Bachus, R-Ala., the ranking member on the House Financial Services Committee, to talk about strategies.
A draft letter opposing the new agency is circulating among the different trade groups, says one lobbyist, who adds that it should be sent up to the Hill next week as a joint letter. Financial Services Committee Chairman Barney Frank, D-Mass, who has championed the proposed new agency, has indicated he'd like to mark up a bill by the end of July.
At a committee hearing on Thursday the proposed legislation was endorsed by a number of consumer groups, including the Consumer Federation of America and U.S. PIRG. A new alliance, dubbed Americans for Financial Reform, has been cobbled together by almost 200 backers of the new agency and has been trying to build grassroots backing for the idea.
-- Peter H. Stone
Richard Hunt has landed on his feet, as the new president of the Consumer Bankers Association.
The one-time aide to former Rep. Jim McCrery, R-La, is filling a vacancy left by the death of Joe Belew in January. Hunt was let go by the Securities Industry and Financial Markets Association late last year, amidst downsizing and some questions about the future for Republicans on K Street.
Hunt arrives as the Association gears up to oppose the Obama Administration's proposal to end private lender's involvement in the federal student loan programs. See the association press release here.
Hunt release.pdf
Former Sen. John Sununu, R-N.H., one of five members of a congressionally appointed panel meant to oversee the government's financial sector bailout, has joined the board of a company affiliated with Bank of New York Mellon Corp, according to the Associated Press.
That bank is one of nine designated by the Treasury Department to get cash infusions from the $700 billion Troubled Asset Relief Program, and is also Treasury's custodian of the bailout funds. Sununu was named last week to the board of ConvergEx Holdings, the holding company for BNY ConvergEx Group, in which The Bank of New York Mellon Corp. has a 33.8 percent stake. Sununu told the AP in an e-mail that the bank held a minority position in ConvergeEx, which he called an "independent company" and ineligible for help from the bailout fund.
-- Julie Kosterlitz
As Congress begins to tackle an overhaul of the nation's financial regulatory system, a new coalition has formed to protect some of the smaller players in the financial services field, Congress Daily's Bill Swindell reports.
Three lobbying groups -- the National Association of Mutual Insurance Companies, the Credit Union National Association and the Independent Insurance Agents & Brokers of America -- have formed the Main Street America Coalition to advocate for small players in the financial-services industry. Click here to read story. (Subscription required)
In unveiling the plan for fixing the financial system, Treasury Secretary Timothy Geithner today made a point of mentioning that his agency will continue to keep lobbyists at arm's length, National Journal's Alexis Simendinger reports.
The government's actions will "build on what we've done," he said -- meaning they'll build on the framework created under the Bush administration. He also said the new steps and new commitments by Treasury will be "independent of lobbyists and politics." In a nod to the Obama administration's promise of transparency, Geithner directed the public to the administration's new website, financialstability.gov.
He went on to say how closely they are consulting with the banks and financial institutions. We assume that doesn't include their lobbyists.
On January 27, Treasury announced new rules on the lobbyists working for organizations receiving or interested in receiving money from the Troubled Assets Relief Program. The rules restrict contacts between officials and lobbyists in connection with applications for funds from the bailout program. The new restrictions are modeled on the limits imposed on political lobbying of Treasury Department officials on tax matters.
Here's Treasury's press release on the rules.
--Bara Vaida
President-elect Barack Obama is wasting no time trying to tackle the economic mess. He and Vice President-elect Joe Biden are convening what they call a "Transition Economic Advisory Board" on Friday in Chicago.
Some pretty big names will be at the table. Take a look:
David Bonior (Member House of Representatives 1977-2003)
Warren Buffett (Chairman and CEO, Berkshire Hathaway)
Roel Campos (Former SEC Commissioner)
William Daley (Chairman of the Midwest, JP Morgan Chase; Former Secretary, U.S. Dept of Commerce, 1997-2000)
William Donaldson (Former Chairman of the SEC 2003-2005)
Roger Ferguson (President and CEO, TIAA-CREF and former Vice Chairman of the Board of Governors of the Federal Reserve)
Jennifer Granholm (Governor, State of Michigan)
Anne Mulcahy (Chairman and CEO, Xerox)
Richard Parsons (Chairman of the Board, Time Warner)
Penny Pritzker (CEO, Classic Residence by Hyatt)
Robert Reich (University of California, Berkeley; Former Secretary, U.S. Dept of Labor, 1993-1997)
Robert Rubin (Chairman and Director of the Executive Committee, Citigroup; Former Secretary, U.S. Dept of Treasury, 1995-1999)
Eric Schmidt (Chairman and CEO, Google)
Lawrence Summers (Harvard University; Managing Director, D.E. Shaw; Former Secretary, U.S. Dept of Treasury, 1999-2001)
Laura Tyson (Haas School of Business, University of California, Berkeley; Former Chairman, National Economic Council, 1995-1996; Former Chairman, President's Council of Economic Advisors, 1993-1995)
Antonio Villaraigosa (Mayor, City of Los Angeles)
Paul Volcker (Former Chairman, U.S. Federal Reserve 1979-1987)
