After the financial-reform bill passed last week, banks spent the week checking their parts to see if they had been inappropriately violated, and if so, where. Predictably, they found some scratches and bruises, but the biggest injury they found, the worst assault to their dignity, was the $19 billion tax that they found they would have to pay to enforce the bill. Cheeky Barney Frank slipped it in at the last minute! Now: Nineteen billion dollars is a lot of money indeed, but we're talking about a check that will be split by the entire of the banking system.
But the banks did not really think about that. They thought: The nerve! $19 billion! For legislation we didn't want in the first place! And so they sent financial-industry lobbyists out to tell Congress, particularly the few Republicans who supported the bill, that they should fight against it. Why? Because, Goldman Sachs, for one, said:
"Ultimately, we believe that some of the increased regulatory and legal burdens will be passed on to customers either in the form of annual fees or higher spreads on lending."
And by "believe that," of course they mean they will make sure of it. Anyway, this argument worked on Scott Brown, the junior senator from Massachusetts who rode a wave of fury at (in part) Wall Street to victory last year. Yesterday, he gave a statement decrying the levy to reporters.
"My fear is that these costs would be passed on to consumers in the form of higher bank, ATM and credit-card fees and put a strain on lending at the worst possible time for our economy," he said.
Nicely said, Scott. Where'd you pick that one up? Anyway now, according to Bloomberg:
Lawmakers said they plan to reconvene the House-Senate financial-overhaul conference at 5 p.m. today to eliminate a $19 billion bank fee in the bill that drew objections from Republicans.
So, yeah, lobbying really works. If only the American people had people to lobby for them! Wait ...
Democrats May Cut $19 Billion Bank Fee From Bill [Bloomberg]