Customers Move from Lobby of Bank to Lobby for Goals in Halls of Congress: Consumer Advocates Awakened to Potential for Influence Could Have Much to Say about 1985 Banking Legislation
Customers Move from Lobby of Bank To Lobby for Goals in Halls of Congress
Consumer Advocates Awakened to Potential for Influence Could Have Much to Say About 1985 Banking Legislation
In case you've forgotten the potential of consumers in influencing banking laws, just think back to 1983 when it was the banking industry, ironically enough, which helped introduce its patrons to their power.
Urged on by bankers and other financial industry officials, consumers flooded Congress with an estimated 22 million cards and letters opposing a law requiring institutions to withhold taxes on interest and dividend income. The response set a record surpassing previous deluges on the Panama Canal treaty and Watergate.
Bankers won. The withholding law was repealed over the objections of President Reagan and leaders in both the House and Senate.
But now, as bankers face a tough year in Congress on issues like expanded powers, they could find a strong, and a more sophisticated, consumer coalition on the opposite side of the fight.
Most Americans' interest in banking is limited. It probably ends with the bottom line in their checkbooks.
But with deregulated interest rates and financial services, consumers are awakening to their stake in Congress' banking debates. So, too, are the leaders of the consumer movement, active for two decades on Capitol Hill but--until recently --rather unfamiliar faces within the clubby banking committees.
"Consumers have not been involved enough,' says Gene Kimmelman, legislative director for the Consumer Federation of America. "Our track record is not too good when it comes to involvement.'
For years, consumer groups got involved in banking issues only sporadically: opposing attempts to preempt state usury laws or to gut federal truth-in-lending laws; combatting lending discrimination through the Home Mortgage Disclosure Act of 1975 and its extension in 1980; seeking a greater return on savings accounts and protections against computer fraud involving electronic banking.
In those years, most observers say, only two consumer lobbyists here took fulltime interest in banking questions--Ellen Broadman of Consumers Union, now an attorney with the Comptroller of the Currency, and Jonathan Brown, a lawyer with Ralph Nader's organization.
Today, consumer groups still are far outnumbered by industry lobbyists--those for financial institutions, and for the insurance, securities, and real estate businesses with an interest in financial regulation. But recent additions to the consumer ranks offer evidence of a heightened interest in banking.
In November, the Consumer Federation hired Alan Fox, a former aide to Rep. Bob Carr, D-Mich., to lobby on banking issues. Congress Watch, another group under Mr. Nader's umbrella, this month added Franci Livingston to do the same.
And the national office of Nader's Public Interest Research Group also is expected to hire someone to represent a consumer viewpoint on banking, along with Mr. Brown.
At Consumers Union, Michelle Meier joined the organization in April to continue the focus on banking that Ms. Broadman pioneered in 1977.
"When I came to Consumers Union,' Ms. Broadman recalled, "the banking industry was in the infancy of major changes involving electronics, and we realized that could have enormous impact for consumers. At that point, none of the other consumer groups had gotten that involved.
"I really didn't know much about banking, so I took a money-and-banking course at George Washington University and read as much as I could,' she said.
Such lack of familiarity with the subject, Ms. Broadman added, is "one reason consumer groups probably haven't been involved much until now. It's an extremely complex area. …