With the financial crisis fading, firms renew political engagement for presidential election year
WASHINGTON—Banks plan to be more active in the 2020 elections, with a large industry group promising to boost campaign spending and political advertising after keeping a relatively low profile in the decade after the financial crisis.
The industry’s re-emergence in the political arena comes amid a friendlier tone in Washington during the Trump administration. Congress and financial regulators have sought to ease capital rules, limits on trading and other restrictions placed on banks by the Obama administration after the 2008 crisis, arguing the financial system is more resilient now.
“They’re using the current thaw in what had been a pretty contentious relationship between Wall Street and D.C. to tell their story a little better,” said Ed Mills, managing director at Raymond James Financial.
The American Bankers Association, a trade group that represents banks of all sizes, said it plans to spend more than $10 million in the 2020 election cycle on its political program, including donations and advertisements to back Republicans and Democrats in congressional races. The amount also includes operational costs that aren’t subject to federal filing requirements; the group declined to say how that total compares with its spending in previous election cycles.
“Our goal is to support candidates who understand and appreciate the critical role banks of all sizes play in the economy,” Rob Nichols, the ABA’s chief executive, said in a statement. “We plan to expand our efforts in 2020 on a rigorously bipartisan basis.”
Banking on 2020 The American Bankers Association has increased political donations ahead of the2020 election. Contributions to federal candidates and other political committees Source: Federal Election Commission Note: Donations January through July in the first year of each two-year election cycle.
In the 2018 midterm election cycle, the ABA spent more than $1.5 million on political ads, polling and other research, the group said. In addition, it contributed $3.5 million to candidates and other political committees, according to Federal Election Commission filings.
The group backed four Democratic and eight Republican candidates, including Dean Heller, a former Republican senator from Nevada, and Sen. Jon Tester, a Montana Democrat.
So far this year through the end of July, it contributed $1.31 million to federal candidates and political committees, the fastest its donations have topped $1 million since at least the 2010 cycle, according to Federal Election Commission data.
The group also contributed $10,000 each to the Democratic Congressional Campaign Committee and the Democratic Senatorial Campaign Committee, and $15,000 a piece to the National Republican Congressional Committee and the National Republican Senatorial Committee. The group declined to comment on the difference in the amounts.
The Consumer Bankers Association, which represents big and regional banks, expects to raise upwards of $200,000, on par with previous years, and the Independent Community Bankers of America, representing smaller banks, said it plans to focus more on social-media ads in 2020.
The American Bankers Association ran an ad backing U.S. Rep. Ted Budd (R., N.C.) in his successful 2018 re-election race.PHOTO:WOODY MARSHALL/ASSOCIATED PRESS
The ABA’s advertisements in the 2018 cycle included one supporting Rep. Ted Budd (R., N.C.) that featured Kelly Earnhardt Miller—a North Carolina banker and the daughter of race-car legend Dale Earnhardt. The group also ran Spanish-language video ads and a print ad in Vietnamese in support of Rep. Lou Correa (D., Calif.).
So far this election cycle, the ABA is the biggest political action committee in terms of donations to federal candidates, according to the Center for Responsive Politics.
In an era where politics play out on social media, banks are working to sell their message to a broader public, shifting the focus to their role in the U.S. economy away from business practices such as risky mortgages that fed the financial crisis. They also are attaching their names to newsletters, glossy magazine ads and public-policy events.
The industry’s efforts haven’t always hit their marks. “Is Bank of America really sponsoring this?” Sen. Bernie Sanders (I., Vt.), a 2020 presidential candidate who has advocated for breaking up big banks, said at a July Washington Post event on the presidential election, with the bank’s logo overhead. “Well, let’s just get into the interview,” journalist Robert Costa replied, to audience laughter.
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The industry has pressed for regulatory victories by focusing on what it says are burdens faced by small and midsize banks, arguing that lower costs to comply with rules and regulations could mean more loans are made to small businesses and consumers. Last May, this approach led to bipartisan support for the most comprehensive rollback of the financial rulebook since the crisis.
“We’re far enough away from the financial crisis,” Heidi Heitkamp, a Democrat and then-senator who backed the bill, said in an interview. “We definitely have normalized the discussion, taking it out of a hyper, you-caused-this-and-you-should-be-punished to a discussion about what works for American consumers.”
The power split in Congress—Democrats control the House, Republicans control the Senate—has complicated efforts by banks to lobby for their policy priorities. Some progressive Democrats on the House Financial Services Committee, for instance, are shunning political donations from the industry.
“We’re still in the early-stage process of developing relationships with all of them. Some we haven’t met,” Richard Hunt, the head of the Consumer Bankers Association, said of new lawmakers of all stripes in an interview. “Eighty percent of my so-called lobbying time is with regulators.”