The Predictable Lobbyist Playbook Against Consumer Protections
FIRST INSTANCE: The Usury Law Repeal (1980s) The campaign against credit card rate caps evokes the successful efforts by banks, particularly Citibank, to dismantle state-level usury laws in the late 1970s and early 1980s. Faced with interest rate ceilings, a handful of banks aggressively lobbied South Dakota and later Delaware to eliminate their caps, leveraging the 1978 Supreme Court decision in
Marquette v. First of Omaha Service Corp. (439 U.S. 299) which allowed banks to export their home state's interest rates nationwide. They argued that these caps stifled competition and access to credit. What they neglected to mention was the skyrocketing consumer debt and predatory lending practices that would inevitably follow. REPETITIONS: Deregulation of the 1990s and 2000s This playbook was
refined throughout the 1990s and 2000s. Arguments against virtually any consumer financial protection – from mortgage lending oversight to payday loan regulations – consistently invoked fears of credit scarcity, harm to 'small lenders,' and overall economic disruption. The rhetoric was particularly prevalent during the lead-up to the 2008 financial crisis, where warnings about regulating complex
financial instruments were dismissed as impeding 'innovation' and 'market efficiency.' The financial industry spent an estimated $1.7 billion on lobbying from 1998-2008 (Center for Responsive Politics, 2010), successfully fending off meaningful regulation that might have prevented the ensuing collapse. OUTCOMES: Increased Risk and Inequality Each instance of deregulation, framed as a boon to small