Financial Services Roundtable

The Financial Services Roundtable (FSR) is an American organization, located in Washington, D.C., formerly called the Bankers Roundtable, was formed in 2000. The FSR "represents 100 of the largest integrated financial services companies which provide banking, insurance and investment products and services to American consumers."^[1] The members of FSR are the CEOs of the 100 largest financial services companies and six additional members representing each company. The Roundtable also has an official blog called Financing America's Economy.^[2] The current CEO is Tim Pawlenty, who is the former governor of Minnesota.^[3]

History

In 1993, the Bankers Roundtable was formed because the 81-year-old Association of Reserve City Bankers and the 35-year-old Association of Registered Bank Holding Companies merged. In 2000, after a decision by the Board of Directors the previous year to "broaden the mission to represent integrated financial service providers...the Roundtable's impact as a major player on Capitol Hill and with the regulators",^[4] the name was changed to The Financial Services Roundtable.^[5]

Parts

Since that time, the Roundtable has expanded. BITS, created in 1996 under the former Bankers Roundtable, allowed collaboration on the technological issues faced by the financial services industry. Since the Roundtable's creation in 2000, this organization addresses "emerging threats and opportunities" especially threats to cybersecurity, fraud reduction and critical infrastructure protection.^[6] Another part of the Roundtable, the Bankruptcy Coalition, lobbied aggressively for changes to the bankruptcy code in 2005.^[7] There are numerous other parts of the Roundtable.^[8] One part, Agents for Change is described as helping move forward the "modernization" of insurance regulation. Another part tries to officially improve working communities of the financial services industry and creating partnerships with non-profits and politicians. The Housing Policy Council and 14 member companies, another part of the Roundtable officially are engaged in an "effort to prevent foreclosures and preserve homeownership." In addition to these sections of the Roundtable, there are three initiatives pushed: InFact (provide Americans with "information...important to the financial services industry), ITAC (non-profit that fights identity theft) and www.MyMoneyManagement.net (providing consumers with "financial education").

Official mission, policy issues and connections

Official mission

Officially, the Roundtable, pledges "to protect and promote the economic vitality and integrity of its members and the United States financial system."^[9] Such members include the nation's Big Four (banks)^[10] and other major corporations in the financial services industry.

Positions from Inside Job

In Charles Ferguson's movie Inside Job, the chief lobbyist of the Roundtable at the time, Scott Talbot, is quoted numerous times.^[11]

• He said that he accepts the high level of compensation in the financial services industry if people have "earned it" and he thinks that high-paying financial executives earned it
• He said that criminal activity shouldn't be accepted, but alluded to the fact that they may be comfortable with "large-scale criminal activity" by business partners of the Roundtable
• He thinks that with large financial institutions, "mistakes happen" and that no wrongdoing needs to be admitted
• He is undecided if "high, very high compensation levels [is]... justified"
• He says that "the board of directors and the compensation committees are the two bodies best situated to determine the pay packages...for executives" and gives them a B for giving pay in the last ten years
• He says that the board of directors decision to let Stan O'Neal, the CEO of Merrill Lynch resign in 2007 and collect "161 million dollars in severance" might not get a B.
• He says that every person is represented in Washington equally with no excessive influence of the financial services industry

Policy issues, positions

According to their official website, the group focuses on financial services legislation, the regulatory issues and reduction of the federal deficit. More specifically, all of these issues "will be considered through the lens of uniform national standards and other core Roundtable principles."^[12] Such issues include:

• Dodd-Frank Improvement Acts
• Debit Card
• Cybersecurity
• Fiduciary Duty/Retirement Security
• Financial Literacy
• GSE Reform
• Insurance Reform
• Corporate Tax Reform
• Dodd-Frank Act Implementation
• Accounting Standards/FASB
• Capital and Liquidity Standards
• "reduction of federal deficits over time" (a priority for the Roundtable)

Connections

The Roundtable has many different direct and other relationships with people, organizations and financial entities. Since, according to Charles Ferguson of Inside Job (film), since the Roundtable is "one of the most powerful groups in Washington, which represents nearly all of the world's largest financial companies," ^[13] it has a lot of influence. Muckety pegs the connections numbering at "2,964 people, organizations or other entities in our database of the most influential people in America...higher than 99% of all entries."^[14] Steve Bartlett, former Congressman and member of the House Banking Committee for seven years is the chairman of the Roundtable. Barnett Sivon and Natter PC, Clark Lytle Geduldig & Cranford LLC and Smith-Free Group are all high-powered lobbying firms working for the Roundtable. Numerous large corporations are part of the Roundtable. Such member companies include:^[15]

• Allstate Corporation
• Bank of America Corporation
• American Honda Finance Corporation (part of Honda)
• Barclays Capital, Inc.
• BB&T Corporation
• BlackRock, Inc.
• Charles Schwab Corporation
• Citigroup Inc.
• E*TRADE Financial Corporation
• Fidelity Investments
• Ford Motor Credit Company (part of Ford Motor Company)
• General Electric Company
• HSBC USA, Inc.
• John Deere Financial Services, Inc. (part of John Deere)
• JPMorgan Chase & Co.
• Liberty Mutual Holding Company, Inc.
• M&T Bank Corporation
• MasterCard Worldwide
• Sallie Mae, Inc.
• Toyota Motor Credit Corporation
• Visa, Inc.
• Wells Fargo & Company

Assets, lobbying and contributions

Assets

The assets of the Roundtable are estimated to be between $10 and $49 million as of 2006.^[16] Of those assets, 42% was non-interest-bearing cash, 25% was savings and temporary cash investments, 11% was land, buildings, and equipment, 15% was other assets and 7% was investments in publicly traded securities. Most of the revenue (65%) coming into the Roundtable was from membership dues of participating organizations.

Lobbying

Lobbying has always been a focus of the Roundtable. From 1998 to 2000, less than a million dollars was spent on lobbying.^[17][18][19] But, by 2001 after the creation of the Roundtable, more than $1.1 million was spent.^[20] For the next five years, the amount of money spent on lobbying increased. In 2006, less than $6.2 million was spent on lobbying.^[21] The next two years, more money was spent on lobbying than in 2006: $6,380,000 was spent in 2007,^[22] and $7,760,000 was spent in 2008.^[23] The next year, according to SourceWatch,^[24] the Roundtable spent about $6.9 million on lobbying in Washington, DC with more than $900,000 going to outside lobbying firms. The Center of Responsive Politics showed a continuation of this trend. From 2008 to 2011, an average of about $7.5 million was spent on lobbying each year.^[25]

A good number of lobbyists representing the Roundtable have been involved in the revolving door between industry and government. Nine of them are part of the revolving door and one is a former congressman.^[26]

Political contributions

Even before its founding, the money contributed toward federal candidates has been spent. The Center for Responsive Politics notes^[27] that in the election cycles of 1990, 1992, 1994, 1996, and 1998, less than $90,000 was spent each year, with the highest amount in 1992 with about $85,200 spent. However, in the 2000s, the amount spent went up exponentially. An upward tick in the amount spent reached a high of $615,808 in the 2010 election cycle. Even with this increase, the money spent in the 2012 election cycle dropped almost by half.

The money spent from the 1990s to the present has not been given to just one party, but to both parties in Washington, Democrats and Republicans. In the three election cycles from 1990 to 1994, Democrats were given more money than Republicans. In the late 1990s, that changed with more money being given to Republicans than Democrats (1996 and 1998 election cycles). This only increased in the 2000s, with more contributions being given than ever before, with a height of more than $266,200 given to Republican Party candidates in the 2008 election cycle. Still, Democrats were the runner-up, and were given the highest amount of money in the same election cycle: more than $214,400. In the 2012 election cycle, $46,000 has gone to House Democrats, $122,000 to House Republicans and $36,500 to Senate Democrats and $38,000 to Senate Republicans.^[28] Such recipients include Speaker of the House John Boehner, House Majority Leader Eric Cantor, Maryland Congressman Steny Hoyer, Congressional Progressive Caucus member Xavier Becerra, senior Republican Senator Orrin Hatch, Senate Majority Leader Harry Reid, Senate Majority Whip Jon Kyl and many others.^[28]

See also

• Financial market
• Financial services
• Inside Job (film)
• European Financial Services Roundtable
• Business Roundtable

References

Other sources

• Financial Services Roundtable
• Location of FSR
• Membership Criteria