Last Updated Feb 8, 2011 8:08 PM EST
The goal? Enlist allies like Issa, who heads the House Oversight and Government Reform Committee, to blunt, forestall or otherwise dismember a range of regs that big businesses contend will stifle job creation and raise compliance costs.
The Business Roundtable, an association of CEOs, said the derivatives rules would "unnecessarily burden" companies that use swaps to manage risks. Specifically, the group objects to Dodd-Frank requiring that swaps be traded on regulated clearinghouses and that nonfinancial firms hold additional capital to guard against large losses. It claims that the margin requirement could result in the loss of 100,000 jobs and force companies that use derivatives to set aside an average of $269 million per year.
Motley crew: Special interests target Dodd-Frank
A range of business groups -- aka "special interests" -- also weighed in with Issa to express opposition to the new financial reform rules, arguing that they're expensive and difficult to implement. These include the American Land Title Association, American Petroleum Institute, Commodity Markets Council, Credit Union National Association, Financial Services Forum, Financial Services Roundtable and Independent Petroleum Association of America.
Among the other parts of Dodd-Frank that these groups are challenging:
- Volcker Rule. Restricts banks from using their own funds to trade short-term securities and bar thems from owning or sponsoring hedge funds or private equity funds.
- Consumer Financial Protection Bureau. Establishes an agency within the Federal Reserve to safeguard users of financial products from abuse and deceptive practices.
- CEO pay. Requires companies to report the ratio of a CEO's compensation to median pay for all their employees.
- Proxy access. SEC rule allowing shareholders to nominate corporate directors at public companies.
- Whistleblowers. SEC rule that would offer employees financial rewards for reporting corporate violations of securities law.
The Dodd-Frank Act was not intended to punish the financial services industry nor to stifle the ability of the industry to provide products and services to meet market demands.Getting the picture? The financial industry is effectively trying to re-legislate several core elements of financial reform. Other corporate interests are playing the same game in moving to dilute regs affecting other industries. Or worse. As my colleague Kirsten Korosec describes, the frankly sinister Koch brothers are hoping to kill the EPA dead, which would remove an inconvenient obstacle to their oil and chemical businesses.
This campaign has been building for months. As Issa's involvement suggests, it is in full force now that sympathetic Republican lawmakers control the House. President Obama, in his eagerness since the midterm elections to court big business, did congressional reformers no favor recently in promising to eliminate unnecessary regulations. We'll soon see how far he's willing to go.
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- Why Wall Street May Yet Win the Derivatives War
- Financial Deform: Republicans Paints a Bulls-Eye on Dodd-Frank Reforms
- Inside Wall Street's Secret Plan to Bore Holes in the Volcker Rule
- Why It's Crazy to Let Wall Street Control Derivative Exchanges