Banks make a financial statement

By: Robin Bravender April 14, 2012 07:04 AM EDT         A group of banks launched a super PAC to focus on key congressional races. | AP Photos

Big banks might have kept their heads down in 2010, but those days are over.   A group of banks launched a super PAC to zero in on key congressional races recently. Earlier this year, financial services groups held a high-profile fundraiser for a candidate challenging a senior Senate Republican. And the industry is remembering its friends on Capitol Hill — shelling out cash to lawmakers who have consistently voted their way. It’s a PR shift for banks, who lowered their profile after the widely unpopular bank bailout, which served as a rallying cry for the tea party. But after President Barack Obama signed the Dodd-Frank financial reform bill into law and the Occupy Wall Street movement amplified anti-bank rhetoric that even some Democrats in Congress picked up, it appears the industry has had enough. They’re taking a more vocal stand this cycle, and they’ve shown they’re willing to back up their talk with serious money — a scenario that should make both Democrats and some Republicans nervous heading into the summer campaign season. “No one likes being kicked around, and there’s definitely that sentiment,” said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, which represents the banking industry in addition to other financial interests. The banking industry has always been a major player in political spending, but its increasingly aggressive tactics are a sign that some in the industry want to pack more of a punch on Capitol Hill, particularly with the sweeping overhaul to the financial system still under way and with big legislative reforms on the horizon. (Also on POLITICO: Bernanke: Still trying to fix system) “They just feel pretty picked on by everyone,” said one financial services lobbyist. “And there’s two ways of dealing with that, hiding and waiting for it to go away — and judging from the rhetoric of the campaign it’s probably going to get worse. It sounds like some guys have gotten fed up, and they’re going to put their money where their mouth is and try to fight back as best they can.” Their latest strike: state banking associations launched a super PAC late last month dubbed the Friends of Traditional Banking. Its stated purpose is to support members of Congress “who show a consistent understanding of the vital importance of traditional banking in our communities and our local economies,” and to oust those who don’t. “Together we can become a force that Congress will listen to and respect,” their website says. Howard Headlee, president of the Utah Bankers Association and treasurer for the new super PAC, said traditional banks have taken a beating, and they’re tired of the vitriol they’ve confronted. “We had a crisis, there was an attempt to address certain weaknesses associated with that crisis and then it just went totally overboard for no reason,” Headlee said. “We went to Washington repeatedly and told congressmen the same thing over and over again: ‘Don’t do this, there’s these unintended consequences, you’re going to impact traditional banking. It’s going to make the recovery slower; it’s going to make it more difficult.’ They didn’t listen at all and they seemed propelled by these extreme interests.” The super PAC won’t function like other well known outside spending groups like American Crossroads, by bringing in big checks to run pricey advertisements. Instead, they are planning to convene their advisory council to pick a few key races to play in. Their supporters would then pledge to donate between $300 and $1,000 directly to the targeted campaigns. It’s still unclear how much of a force the super PAC will be, but it could have a big impact in a few races this fall if the group is able to get bankers across the country to pony up. Other groups have already made waves this election season by backing the primary opponent of Sen. Dick Lugar (R-Ind.) after he spurned them on a key vote. Several veteran financial services lobbyists held a fundraiser in January for Richard Mourdock, the tea party favorite challenging Lugar in Indiana. The event was hosted by Talbott of the Financial Services Roundtable, Lisa Nelson of Visa, Peter Blocklin of the American Bankers Association and Vincent Randazzo of PNC. The fundraiser was seen as a shot across the bow after Lugar and a dozen other Republicans voted against banks on an amendment that would have blocked caps on swipe fees last year. That amendment, which failed in the Senate, pitted two of the nation’s most influential business groups — banks and retailers — against each other. The ABA also cut a $5,000 check for Mourdock last June, soon after the Senate vote on the swipe fee amendment. These tactics may have been considered brazen for the industry not long ago, but banks are feeling less timid lately, now that the bailout is a few years behind them and the anti-bank rhetoric has calmed. “Time heals all wounds,” said the financial services lobbyist. “Obviously when they’ve got their hands out to the federal government, sheepishly looking for billions of dollars, it’s hard to ask for anything other than the billions that you need to just kind of open the doors the next day. But they paid it back. The nation went through a crisis and it weathered the storm; most of these banks are pretty healthy or healthy enough right now.” They’re also nervous about what might happen with the implementation of sweeping new financial rules if they don’t have plenty of friends in Congress next year. Talbott said the banking industry has always been politically involved, but now,”there’s a little more urgency here because of Dodd-Frank.” “We just went through a very challenging economic and political environment,” Talbott said. “I think that they’re just starting to support officials or candidates who understand our industry to build a more receptive audience.” Meanwhile, banks are keeping up their traditional tactics of helping their friends, even after political donations took a dive in 2010. Among the top congressional recipients of cash from commercial banks this cycle: Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.) who co-authored legislation favored by banks to delay limits on debit card swipe fees, and House Financial Services Committee Chairman Spencer Bachus (R-Ala.), according to the Center for Responsive Politics. The commercial banking industry donated just $21.7 million in 2010, down about $16 million from its spending on federal candidates in the 2008 cycle, according to CRP data. Employees and PACs associated with commercial banks have donated more than $13.6 million to federal candidates so far this cycle, the data shows. And the industry is the 18th biggest sector in terms of political contributions, up slightly from 19th place in the 2010 cycle.