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David Kustoff (Tennessee 08)

David Kustoff (Tennessee 08)

Since his election to Congress in 2016, Rep. David Kustoff (TN-08) has rarely missed a chance to do Wall Street’s bidding. Kustoff sits on the House Financial Services Committee as one of a bloc of Republican lawmakers known for raking in huge sums of money from big banks and financial companies – and for churning out legislation to make it easier for those companies to gamble with taxpayer-backed funds, stick customers with hidden fees and “gotcha” clauses, and enrich themselves at the expense of the rest of us.

Campaign contributions

Financial companies and their executives have been massive funders of Rep. Kustoff’s political career. In the current election cycle, he has taken over $500,000[1] from individuals and PACs associated with banks, payday lenders, and other financial and real estate interests – more than from any other sector of the economy.

During the current election cycle, Rep. Kustoff’s financial backers include Brown Brothers Harriman and Company ($17,700), Boyle Investment Company ($13,800), RBM Venture Company ($10,800), American Bankers Association ($10,500), Ernst and Young ($10,000), the Council of Insurance Agents and Brokers ($10,000), Massachusetts Mutual Life Insurance ($10,000), New York Life Insurance ($10,000), First Tennessee Bank ($9,400), First Horizon National ($9,100), Prudential PLC ($8,500), the American Institute of CPAs ($8,500), Home Surety Title and Escrow ($8,400), the Independent Insurance Agents and Brokers of America ($8,000), the American Financial Services Association ($8,000), Regions Financial ($8,000), the American Resort Development Association ($7,500), Bank of America ($7,000), Belz Enterprises ($6,950), Bank of New York Mellon ($6,500), the Investment Company Institute ($6,500), the Independent Community Bankers of America ($6,500), the National Association of Real Estate Investment Trusts ($6,000), the American Land Title Association ($6,000), Deloitte LLP ($6,000), KPMG LLP ($5,500), Marston Group ($5,400), Advance Financial ($5,400), Harpeth Financial Services ($5,400), Prudential Collins-Maury ($5,400), Gill Properties ($5,400), Woodyard Realty ($5,400), Barnett Insurance Agency ($5,400), SunTrust Banks ($5,000), Kirk Property LLC ($5,000), the Mortgage Bankers Association ($5,000), the Online Lenders Alliance ($5,000), the National Association of Insurance and Financial Advisors ($5,000), the National Association of Mutual Insurance Companies ($5,000), LPL Investment Holdings ($5,000), and many others.

Voting record

In 2017 and 2018, Americans for Financial Reform (a coalition of more than 200 consumer and other public-interest groups) tracked 38 House floor votes and 36 Financial Services Committee votes – 74 votes altogether – on measures making it easier for Wall Street banks and other financial companies to make reckless bets or take unfair advantage of consumers, investors, or workers, or endanger the safety and stability of the overall financial system and the economy. Rep. David Kustoff voted for all 74, including proposals to:

●  Sharply reduce the funding, powers, and political independence of the Consumer Financial Protection Bureau, making it easier for mortgage lenders, payday lenders, and credit card companies, etc. to stick customers with hidden fees and unexpected charges (HR 10, voted for);

●  Repeal the “Volcker Rule,” which bars the big Wall Street banks from playing reckless games with insured deposits and other taxpayer-subsidized funds (HR 10, voted for);

●  Roll back consumer credit safeguards for mobile (or manufactured) homes, making it easier to steer borrowers into high-cost loans with excessive fees and interest – in an industry that has long been rife with such abuses (HR 1699, voted for);

●  Weaken oversight of the Big 3 credit ratings agencies, Moody’s, Standard & Poors, and Fitch, which made huge sums of money by slapping triple-A ratings on toxic mortgage-backed securities in the run-up to the financial crisis (HR 3911, voted for);

●  Give Wall Street banks and other large financial companies a new way to undo rules they dislike, by requiring the explicit approval of both houses of Congress before any major regulation takes effect (HR 26voted for); and

●  Strip consumers of the right to band together and take banks and other financial companies to court over systematic wrongdoing, leaving people with no recourse except to submit an individual complaint to a corporate-friendly private arbitration firm. This is a system that effectively operates as a corporate Get out of Jail Free Card, since the damage to any one victim of financial industry fraud and trickery is rarely large enough to justify the cost of legal action, and arbitration proceedings are usually kept under wraps. (HJ Resolution 111, voted for)

David Kustoff also voted for the Republican tax-cut plan (HR 1), from which big banks and financial companies – and their executives – stand to gain hundreds of billions of dollars, with the scandal-ridden Wells Fargo poised to be the leading corporate beneficiary.

And in May 2018, his support helped win passage of the biggest rollback of banking regulations since the financial crisis. Backers of this legislation (S 2155) described it as an effort to provide regulatory relief for small “community banks”; but that’s a well-honed Wall Street marketing pitch for bills whose chief beneficiaries, as a rule, are much larger and less sympathetic institutions. In fact, the core provision of S 2155 freed a group of 25 banks with $50-$250 billion in assets from the heightened oversight put in place after the 2008-09 financial crisis. Far from protecting community banks, S 2155 will spur increased bank consolidation by letting a $50 billion institution grow up to five times bigger without attracting any extra regulatory scrutiny – a point acknowledged by industry insiders as soon as the bill passed. Its other unadvertised features included a significant weakening of safeguards against predatory or racially discriminatory lending, especially in rural areas of the country. Senator Elizabeth Warren dubbed it The “Bank Lobbyist Act.”

All these votes occurred during the 115th Congress, which has done next to nothing about the serious problems facing ordinary Americans (health care, housing, etc.). If you’re wondering how the same elected body could somehow manage to act on item after item from Wall Street’s legislative wish list, the answer lies with David Kustoff and the far too many other lawmakers like him who have built their congressional lives around the pursuit of campaign donations from big banks, securities firms, payday lenders, and other giant financial companies.

When it comes to the issues that Wall Street banks and other financial firms care about, Kustoff has ignored not only the interests but the will of the people he is sworn to represent. Ten years after the financial crisis, the great majority of voters – across lines of geography and political party – voice their support for existing regulations and say they would like to see the rules governing Wall Street and the financial world made tougher. Yet in all the actions described here, Rep. Kustoff has not once taken a stand for stronger rather than weaker regulation of banks, lenders, and other financial entities.


[1] On 9/26/18, OpenSecrets.org showed Rep. Kustoff with a total of $501,138 in FIRE sector contributions, based on data reported to the Federal Elections Commission and compiled by the Center for Responsive Politics. Like other dollar amounts cited here, this number can be updated by clicking the link to CRP’s website.

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