After meeting with bank executives, President Barack Obama noted "a big gap" between the CEOs and their lobbyists on his campaign to rewrite the rules governing the financial industry. The CEOs "support reform," Obama said, but their lobbyists have been sending a different message.
Appearing separately after the meeting, the bankers seemed to agree. "We're going to do a better job ... to work with the lobbyists" to address that disconnect, US Bancorp CEO Richard Davis said.
But the "gap" Obama said he discovered is an illusion. The bankers not only are well aware of their lobbyists' efforts, they direct them. They have supported parts of Obama's financial agenda since long before the financial crisis, when they proposed the same measures.
In striking the appearance of agreement, both sides glossed over a dispute on one key proposal: the creation of a new agency to protect consumers from bank abuses. The proposed agency would have rule-writing authority and onsite examiners.
That proposal is the core of Obama's proposed changes, and U.S. banks and their representatives oppose it unanimously. Monday's meeting didn't change that.
"The bankers (in the meeting) said they support consumer protection, but there's no reason as far as I can tell to believe they support" the new consumer protection agency, said Ed Yingling, president of the American Bankers Association.
That bankers support many other items on Obama's agenda should come as no surprise. Many of the president's key provisions track closely with a 2007 report overseen by the CEO of JPMorgan Chase & Co. and the chairman of Wells Fargo & Co., and released by the Financial Services Roundtable, which represents the 100 largest financial firms.
Roundtable lobbyist Scott Talbott said his group supported much of Obama's plan before it was announced. But he said his group and other industry groups have been consistent in opposing the proposed consumer agency.
By suggesting the opposition comes from lobbyists rather than bankers, Obama could be giving his White House guests room to soften their position. It's also a populist tactic that takes aim at a group he has often vilified -- those who play Washington's lucrative influence game.
He also may be attempting to neutralize the U.S. Chamber of Commerce, which has spent millions of dollars on a high-profile campaign to defeat the proposed consumer agency. The Chamber already won key concessions in the version of the bill that passed the House this month.
Obama's own poll numbers have been sagging, and he has little to lose from tapping the vast reservoir of public anger at banks. On Sunday night, the day before meeting with them, he was on TV calling bankers "fat cats" who "don't get it."
Monday's meeting let Obama sharpen his get-tough message, then claim to have discovered common ground.
He criticized the banks' lavish executive pay practices -- even though they have made progress in tying compensation to long-term performance. He pressed them to lend more money to consumers and businesses -- then acknowledged banks are hamstrung by the rough economy and regulators are cracking down on risky lending.
Asked about the supposed gap between bank CEOs and their lobbyists, White House spokeswoman Jennifer Psaki said, "We expect the CEOs to say the same thing in public and in private to members of Congress that they said to the president in person yesterday."
And that gap Obama discovered between the bankers' support for the rules rewrite and their lobbyists' rhetoric? Davis, the bank CEO who promised to close the gap between CEOs and lobbyists, is the incoming chairman of the Financial Services Roundtable. The Roundtable has been among the proposed consumer agency's most strident opponents, saying it "would actually harm consumers."
Davis spent the hours after Monday's White House meeting at the Roundtable's offices. The lines of communication between bank executives and their lobbyists remain open.
Aside from the rhetoric, there's no evidence they ever were closed.
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