Banks at a loss how to counter star power of rookie lawmaker
US banks are weighing whether to embrace or avoid progressive firebrand Alexandria OcasioCortez, report Pete Schroeder and Michelle Price, of Reuters.
COURT, avoid or sideline? Barely a month into the new Congress, financial lobbyists in Washington are already strategising how to handle the star power of rookie Democrat lawmaker Alexandria OcasioCortez.
The Democratic Socialist and Wall Street critic joined the 60member House Financial Services Committee in mid-January and more than a dozen lobbyists interviewed by Reuters say the 29yearold activist and former bartender is too high profile to ignore.
Consumer Bankers Association chief executive Richard Hunt said he had not encountered a lawmaker like OcasioCortez in more than 20 years in Washington.
‘‘She has the ability to influence unlike a lot of other freshmen.’’
The youngest woman ever to serve in Congress, OcasioCortez has become a social media phenomenon with her posts and livestreams on everything from climate change to skincare tips attracting millions of followers across Twitter and Instagram.
The New York native has proved adept at using humour to explain complex concepts or rebuke opponents, often while preparing dinner or hanging out in her pyjamas. A video of the lawmaker dancing outside her congressional office last month has been viewed 21 million times.
An economics major and selfconfessed ‘‘science nerd’’, OcasioCortez campaigned on issues that put her at odds with the financial industry, including separating commercial and investment banking, breaking up large banks, and forgiving student debt.
Central to her campaign has been the rejection of corporate campaign dollars, closing off a traditional avenue for industry access and influence on Capitol Hill.
Now lobbyists fear her enlarged platform will help the firstterm junior lawmaker push her ideas into the mainstream and are trying to figure out how best to respond.
Lobbyists representing big banks, such as JPMorgan Chase and Co, Citigroup, Bank of America Corp, Wells Fargo and Morgan Stanley, which have embraced progressive causes such as diversity, inclusion, gun control or aboveminimum wages, want to push these credentials. They also wanted to highlight how they employ thousands of people in OcasioCortez’s district in Queens and the Bronx, they said.
Smaller and midsize firms, meanwhile, want to distance themselves from Wall Street titans and emphasise their critical role as community lenders.
Several financial lobbyists, noting she lacks a financial services background, said they were keen to meet OcasioCortez to explain their business models and issues.
Paul Merski, executive vicepresident at the Independent Community Bankers of America, said the group had contacted the lawmaker’s office and was hoping to schedule a meeting. He said his focus would be to draw the distinction between larger financial firms and ICBA’s members, which as small community lenders have built up ‘‘tremendous goodwill’’ across the aisle.
JPMorgan, Citigroup, Bank of America, Wells Fargo and Morgan Stanley representatives declined to comment.
OcasioCortez said the appointment of progressives like her to the panel ‘‘sends a very powerful message’’ to the financial industry.
She said she wanted to pursue aggressive oversight and expose financial corporations’ role in broader areas of concern, such as the detention of children in privately funded facilities on the Mexico border.
‘‘We can leap back in and say ‘what does a responsible financial sector look like?’.’’
Other lobbyists worry, however, engaging her could backfire, especially if OcasioCortez uses social media to publicise the meeting. For example, she went on Twitter to name and shame corporate lobbyists at a congressional freshman orientation event in December.
‘‘The fear is, it’s like going in to talk to the FBI — anything you do or say can be used against you,’’ one lobbyist for a major bank said.
Lobbyists note how OcasioCortez has already ignited a public debate on climate change and inequality by calling for a Green New Deal and proposing a 70% tax on income exceeding $US10 million, an idea Nobel Laureate Paul Krugman has endorsed.
Waleed Shahid, a former campaign aide and a spokesman for Justice Democrats, the progressive group that recruited OcasioCortez, said her ability to raise public awareness about complex issues had caught the Establishment’s attention.
‘‘She can really explain what is happening with Wall Street in a way the public can understand it, and that’s why Wall Street is terrified.’’
Speaking to Reuters, OcasioCortez did not rule out listening to industry concerns to arrive at responsible regulation, but said ‘‘they have more than enough sympathetic ears’’ on the committee.
‘‘We also saw in 2008 just a lot of advocacy for policies that were at its core totally irresponsible. But they were dressed up as conservative fairminded measures,’’ she said.
Saikat Chakrabarti, her chief of staff, tweeted in response to this story that the congresswoman was ‘‘here to hold Wall Street accountable’’. Her policy adviser Dan Riffle later tweeted: ‘‘Proposal: let’s take bank lobbyist meetings, but only if they agree to having it livestreamed.’’
The financial industry faced a similar challenge in 2012 when newly elected progressive firebrand Elizabeth Warren joined the Senate Banking Committee and her grilling of bank executives and regulators won her a national following.
But while Warren was wellknown as a consumer advocate before joining Congress, she did not have the same social media platform as OcasioCortez. Isaac Boltansky, director of policy research at Washingtonbased boutique investment bank Compass Point Research and Trading, said whichever bank slipped up next would get ‘‘taken to the woodshed in a way that we haven’t seen before’’.
Often caught flatfooted by Warren, the industry hopes to rebuild bipartisan support it enjoyed in Congress before the 200709 financial crisis. And with many incumbent centrist Democrats smarting after OcasioCortez called them out for doing big business’ bidding, some see an opportunity to divide and conquer.
Several lobbyists told Reuters they believed they could isolate OcasioCortez and other progressives on the financial services committee by building coalitions with moderate Democrats, such as fellow New York Representative Gregory Meeks, and centrist Republicans.
They said they would also lean on committee chairwoman Maxine Waters, a Democrat and a liberal who has pledged to work across the aisle, to rein in the progressive wing.
A spokeswoman for Waters declined to comment.
In a statement, Meeks said his priority this Congress would be to promote policies that ‘‘support our financial system, but ensure everyone benefits from its successes’’.
She can really explain what is happening with Wall Street in a way the public can understand it, and that’s why
Wall Street is terrified