Kevin Yoder (Kansas’s 3rd CD) helped engineer one of the biggest single rollbacks of financial regulation since the passage of the Dodd-Frank reforms of 2010. In 2014, with his behind-the-scenes assistance, a handful of giant banks got rid of the so-called “swaps pushout rule” and regained the ability to use insured deposits and other taxpayer subsidies and guarantees to bet on risky financial derivatives — a form of betting that played a major role in fueling the 2008 financial crisis and the massive taxpayer bailouts and economic distress that followed.
To spare lawmakers the embarrassment of being seen to vote for such a brazen Wall Street giveaway, Yoder inserted it into a “must pass” $1.1 trillion dollar spending bill. When his role got out, Yoder tried to cover his tracks, explaining his proposal away as an effort to help “the farmer in your district who wants to get a loan.” But “the big push” for this measure came, as a Kansas City Star editorial noted, from the big banks. More specifically, it came from Citigroup, Goldman Sachs, Bank of America, and JPMorgan Chase, which together controlled 90 percent of the swaps market and had all been recent Yoder contributors. His amendment turned out to have been lifted from a 2013 bill written almost word for word by lobbyists for Citigroup.
Yoder has cultivated a similar relationship with payday and car-title lenders, who have donated more than $320,000 to his election campaigns. No other member of Congress has taken that much money from the payday lending industry, and “the investment has paid off time and again,” says the consumer watchdog organization Allied Progress.
In all, Yoder has collected over $3 million in campaign contributions from the financial and real estate industries, more than from any other sector of the economy. His top 20 corporate backers include Citigroup ($50,999), Bank of America ($47,549), the American Bankers Association ($47,000), and Goldman Sachs $44,000). All these companies have made large donations to Yoder in the current election cycle. So have JPMorgan Chase ($10,000), the Investment Company Institute ($10,000), PNC ($9,500), SunTrust ($9,000), and Capital One ($9,000).
- Cash America International, a Fort Worth-based payday lender and pawnshop chain;
- LTS Management, which makes loans at annual interest rates as high as 700 percent and has been sued for violating the usury laws of multiple states;
- Josh Mitchem, whose companies are legally headquartered in the West Indies tax havens of St. Kitts and Nevis, but have been issuing loans at annual interest as high as 644 percent in Arkansas, where the maximum legal rate is 17 percent;
- Mark Curry, whose company runs several Kansas City-based online lending operations and has been the subject of usury-law-related lawsuits in Montana and Indiana; and
- QC Holdings (now known as QCHI), an Overland Park-based company with nearly 400 retail payday, title and installment loan shops across the country (Quik Cash, National Quik Cash, QC Finance, Buckeye Check$mart, 1st Loans Financial, First Choice Loans, First Payday Loans, LendNation, 310-Loan). QC has poured nearly $180,000 (more than any other company) into Yoder’s campaigns.
Yoder was one of 10 House members cited by the Campaign for Accountability in a 2015 ethics complaint for repeatedly accepting payday-lender money while taking actions favorable to the industry. In late 2014, Yoder received $5,100 in such contributions within weeks of writing a letter attacking a Department of Justice crackdown on banks and payment companies that were helping payday lenders collect on illegal loans.
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 banks and financial companies at the expense of consumers, investors, workers, or the stability and safety of the financial system as a whole. Yoder voted for all 38 of those measures, including proposals to:
- Slash the Consumer Financial Protection Bureau’s funding and powers, making it easier for mortgage lenders, payday lenders, and credit card companies to stick people 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 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 riddled 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);
- Let big banks boost profits by reducing the capital reserves they have to set aside as a safeguard against losses (HR 4296, voted for);
- Give Wall Street banks and other large corporations a new way to undo rules they dislike, by requiring the 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 Get out of Jail Free Card for financial fraud, since the damages to any one person are rarely large enough to justify the cost of legal action, and arbitration proceedings usually remain secret. (HJ Resolution 111, voted for).
Yoder 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, he voted for S 2155, 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” – a well-honed Wall Street marketing pitch for bills whose chief beneficiaries, as a rule, are much larger and less sympathetic institutions. The core provision of S 2155 freed a group of 25 banks with assets in the $50-$250 billion range from the heightened oversight regime established after the 2008-09 financial crisis. Far from protecting community banks, it 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. The “Bank Lobbyist Act,” Senator Elizabeth Warren dubbed it.
All these votes occurred during the 115th Congress, which has done next to nothing to address the serious problems facing ordinary Americans. If you’re wondering how this same elected body could somehow manage to act on item after item from Wall Street’s legislative wish list, Kevin Yoder is one big answer – Yoder and the others like him who have built their congressional lives around the pursuit of campaign cash from big banks, securities firms, payday lenders and other giant financial companies.
On the issues that matter to Wall Street, Yoder has consistently ignored not only the interests but the will of the people he is sworn to represent. The great majority of Americans, across party lines, want to see tougher financial regulation and worry that Wall Street has too much influence over our economy and government. Yet in all the actions described here, Rep. Yoder has not once called for stronger rather than weaker regulation of banks, lenders and other Wall Street entities.