In Minnesota, Erik Paulsen (3rd CD) portrays himself as a pragmatist who gets things done for regular people. In Washington, he has a long record of support for measures that benefit the rich and powerful, including a stream of legislation making it easier for Wall Street megabanks, payday lenders and private equity firms etc. to enrich themselves at the expense of the rest of us.
Financial companies and their executives have in turn been massive funders of Paulsen’s political career. In all, he has taken well over $4 million in campaign contributions from individuals and PACs associated with banks and financial and real estate interests, more than from any other sector of the economy.
Rep. Paulsen’s top corporate benefactors since 2007 include the scandal-ridden Wells Fargo bank ($134,650), Thrivent Financial ($98,400), US Bancorp ($91,350), Deloitte ($89,860), and TCF Financial ($65,400). During the current election cycle, he has taken contributions of $10,000 or more from US Bancorp ($30,200), Thrivent ($25,050), Capital One ($19,000), Northwestern Mutual ($18,500), the National Association of Real Estate Investment Trusts ($17,500), the National Venture Capital Association ($15,000), Massachusetts Mutual ($15,000), Wells Fargo ($14,300), Western National Group ($13,500), MetLife ($13,500), Deloitte LLP ($13,000), PricewaterhouseCoopers ($12,850), the Investment Company Institute ($12,500), Bank of America ($12,400), the American Council of Life Insurers ($12,000), Charles Schwab ($11,933), Parman Capital Group ($10,800), Blackstone Group ($10,800), Nationwide ($10,500), Ameriprise Financial ($10,250), Ernst & Young ($10,000), KPMG LLP ($10,000), Morgan Stanley ($10,000), Prudential Financial ($10,000), New York Life Insurance ($10,000), and Waddell & Reed ($10,000).
Over the course of Erik Paulsen’s five terms in Congress, Wall Street has learned to count on his support for its endless efforts to undermine the regulations enacted in response to the 2008 financial crisis, and the agencies charged with enforcing them. In 2017, Americans for Financial Reform, a coalition of more than 200 consumer, civil rights, labor, investor, community and faith-based organizations, tracked 38 House floor votes on measures that would benefit Wall Street banks and other financial companies at the expense of consumers, retirement savers, workers, taxpayers, or the safety and stability of the financial system as a whole.
Erik Paulsen voted for all 38 of those measures, including proposals to:
- Let big banks boost profits by reducing the capital reserves they have to set aside as a safeguard against losses (HR 4296, voted for);
- Make it easier for mortgage lenders, payday lenders, and credit card companies to stick people with hidden fees and unexpected charges by sharply reducing the Consumer Financial Protection Bureau’s funding and powers (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 ride with such abuses (HR 1699, voted for);
- Weaken oversight of the Big 3 credit ratings agencies, Moody’s, Standard & Poors, and Fitch, which had 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 26, co-sponsored); and
- Strip consumers of the right to band together and take banks and other financial companies to court over systematic wrongdoing, leaving them 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 arbitration firms are typically chosen by (and dependent on future business from) the company being complained against, and the damage suffered by any one victim is rarely large enough to justify the cost of legal action. (HJ Resolution 111, voted for).
Paulsen also voted for the Republican tax-cut plan, 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) defended it as an effort to provide regulatory relief for small “community banks” – a well-honed Wall Street marketing pitch for bills whose chief beneficiaries, typically, 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 Erik Paulsen and others like him who have built their congressional careers 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 matter to Wall Street, Paulsen has consistently ignored not only the interests but the clearly expressed 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 made tougher. Yet in all the actions described here, Rep. Paulsen has not once called for stronger rather than weaker regulation of banks, lenders, and other financial entities.