The six senators who introduced legislation Thursday to slow down implementation of the "Volcker rule," designed to prohibit banks from profiting from trading on their own accounts, are the recipients of ample amounts of campaign cash from the financial industry.
Three Democrats and three Republicans are cosponsoring the effort to push back the effective date of a rule that has provoked bitter complaints from the banking industry. The Dodd-Frank law mandated that it go into effect July 21, the second anniversary of the financial regulatory overhaul. More than 17,000 comments have flooded into federal financial agencies. The proposed legislation would delay implementation of the Volcker rule until the agencies have issued their final rules.
A look at the sponsors and their take from the securities and investment and commercial banking sectors:
- Sen. Mike Crapo, R-Idaho, who discussed the proposal at a hearing of the Senate Banking Committee today, has collected more than $940,000, according to the Center for Responsive Politics. His top donors include Citigroup, JPMorgan Chase & Co., Goldman Sachs, and Credit Suisse.
- Sen. Mark Warner, D-Va., who made millions in the cell phone business before entering politics, has gotten $1.8 million. JPMorgan Chase & Company and Citigroup are among his top donors.
- Sen. Pat Toomey, R-Pa., who counts JP Morgan Chase, the American Bankers Association, and Bank of America among his top donors, has received more than $1.4 million.
- Sen. Kay Hagan, D-N.C., has gotten the least among the group of senators from banking and investment industries, with just $395,000 in contributions. But one of her top supporters is Bank of America, headquartered in her state.
- Sen. Tom Carper, D-Del., has taken $2.2 million from these industries over the years. Delaware-based MBNA is his most generous supporter, followed closely by JPMorgan Chase & Co. and Citigroup.
- Sen. Bob Corker, R-Tenn., has benefited from $2.4 million from these industries. JPMorgan Chase & Company and Goldman Sachs count among his top donors.
At the hearing, Federal Reserve governor Daniel Tarullo told Crapo that he didn't think the delaying legislation was necessary because even if the Volcker rule is not ready for implementation by the July deadline — which is likely — the government will provide the financial industry some direction about how to comply with the coming regulatory changes.
"I think it is incumbent on all the regulators to provide some guidance for firms to let them know exactly what the expectations will be and not let this hang out there as unknown, and I think we should be able to do that if needed," Tarullo said.