WASHINGTON — As federal regulators begin implementing regulatory reform, at least one agency plans to step up its disclosure of private meetings with industry insiders.
The Federal Deposit Insurance Corp. is planning to disclose the names of individuals and groups that meet with agency officials about the Dodd-Frank Act, which President Obama signed Wednesday. Such a plan goes well beyond current disclosure policies and comes amid the perception that banks will attempt to weaken provisions of the reform law as regulators put them into effect.
"A significant share of the American public thinks the game is rigged in finance's favor," said Robert Litan, a senior fellow at the Brookings Institution and research chief at the Kauffman Foundation. "Now, since everyone knows the bill is essentially just laying a road map for the regulators and all the real work is going to be done at the agencies, I think" FDIC Chairman Sheila Bair "is being very smart. I think you'll see other agencies do what she does."
Currently, the agencies only publish records of meetings dealing with a formal proposed regulation held during the proposal's comment period. Some meetings get disclosed outside of a comment period, but usually a journalist or other member of the public must request details through the Freedom of Information Act to obtain such records. Lawmakers are not required to disclose meeting with lobbyists.
The FDIC, which under the law must implement reforms ranging from changes in how banks are assessed premiums to developing a resolution system for giant nonbanks, appears ready to go further.
In a July 15 statement on the Senate's final passage of the bill, Bair emphasized that the agency would develop rulemakings "in an open, transparent and collaborative fashion."
"In addition to a dedicated webpage where the public can track key steps in the implementation process, we will also release the names and affiliations of outside individuals and groups that meet with FDIC officials about the bill," she said.
A spokesman said the agency was still developing the plan, and would provide no further details.
The plan echoes moves by the Obama administration, which has published records of meetings held with lobbyists in connection with economic stimulus measures and the Troubled Asset Relief Program.
"As hard as [the bill] was, the difficulty and complexity and amount of work yet to come is probably not fully appreciated by even those who think we appreciate it," said Chuck Muckenfuss, a partner at Gibson, Dunn & Crutcher LLP. "If the transparency serves to diminish the cynicism and enhance the legitimacy of the process, then that's a good thing."
Yet Muckenfuss and others said posting such meeting records may have drawbacks. The clearest one, observers said, is there could be fewer meetings — discouraging debate over an implementation issue — if attendees prefer that records not be disclosed. "The trade-off is that it from time to time could impede the flow of information," Muckenfuss said.
Jan Witold Baran, a partner at Wiley Rein, said President Obama's policies to publicize meetings have discouraged administration officials from meetings with lobbyists.
"The net effect … is that administration officials will decline to have any communications with registered lobbyists because it will require the posting of this information, and they either don't want to do that or they're too busy to do it," Baran said. "In the abstract, there shouldn't be any problem with posting records of meetings that have occurred. But what we have experienced is that the requirement in and of itself has discouraged meetings. I don't think that's healthy or beneficial."
It is unclear how far other agencies responsible for implementing the bill will go in disclosing their meetings.
A spokeswoman for the Federal Reserve Board said the central bank has in the past posted some meeting records before issuing formal proposals, including when the agency was involved in the implementation of Basel II capital standards.
Under the reform law, the Fed's implementing duties cover provisions such as new restrictions on interchange fees for debit cards and the oversight of systemically important companies.
The spokeswoman said the Fed was considering its options for posting a record of meetings concerning the reform law, but no decisions have yet been made.
A spokesman for the Office of the Comptroller of the Currency, which under the law will absorb the Office of Thrift Supervision, said the long-standing policy regulators now follow — to post meetings associated with formal comment periods — was sufficient. "As this transparent policy has served the public well for a number of years, we will continue this policy," the spokesman said.
If the public wanted more information, he said, "all of our schedules may be received under FOIA for those who are interested in an hour by hour activity record of any OCC executive."
Industry representatives said they do not oppose increased disclosure, as long as the FDIC logs more than just its meetings with bankers.
"It should include not only what private parties are saying about regs, but it should include government agencies who are trying to influence the regs," said Wayne Abernathy, the executive director for financial institutions policy and regulatory affairs at the American Bankers Association. "If someone from the White House is calling the FDIC and wants to weigh in, that's fine, but it should be included in the records too.
Open-government advocates said the industry's influence makes an initiative for increased transparency a no-brainer.
"You can't question the power a lot of private interests wield as far as banking regulation" goes, said Anne Weissmann, the chief counsel for Citizens for Responsibility and Ethics in Washington. "There's a good reason to believe that they had a great deal of influence on the legislation. So given that, it's all the more important that there be enhanced transparency in how the legislation is actually implemented."