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Off Wall Street, companies worry about financial Bill

Off Wall Street, companies worry about financial Bill
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First Published: Tue, Apr 27 2010. 11 02 PM IST

Widespread concern: Firms worried about the overhaul of financial regulation bear little resemblance to Goldman Sachs and other Wall Street businesses that have become the main targets of the legislat
Widespread concern: Firms worried about the overhaul of financial regulation bear little resemblance to Goldman Sachs and other Wall Street businesses that have become the main targets of the legislat
Updated: Tue, Apr 27 2010. 11 02 PM IST
Washington: Mars Inc., the maker of M&M's and Snickers, wants to make sure it can continue dabbling in the derivatives market to protect the price of sugar and chocolate for its candies.
Harley-Davidson Inc. is worried that its dealer-financed loans to bikers will fall victim to new federal financing regulations. And eBay Inc. is concerned about possible restrictions on PayPal, a subsidiary, in moving money in the Internet marketplace.
Widespread concern: Firms worried about the overhaul of financial regulation bear little resemblance to Goldman Sachs and other Wall Street businesses that have become the main targets of the legislation.Daniel Acker/Bloomberg
Far afield from Wall Street, the intense debate over the overhaul of financial regulations by Congress is attracting some unlikely, but powerful firms.
At least 130 companies from the manufacturing, retail and service industries have retained high-powered lobbyists to weigh in on, and often oppose, the regulatory system being debated this week in Washington, according to an analysis of lobbying records by The New York Times.
The companies bear little resemblance to Goldman Sachs and the other Wall Street financial businesses that have become the main targets of the legislation, and the lobbying push by other industries shows just how broadly the legislation could affect American businesses.
It also illustrates what some critics say is legislation so loosely drawn that it may inadvertently cover a host of companies that are involved in lending or moving money, even if they operate far from Wall Street and had little to do with the crisis.
Some industries, such as payday lenders, fear that the financial overhaul may be a backdoor way for Congress to regulate them, something they have successfully fought for years.
Indeed, Steve Adamske, communications director of the house financial services committee, acknowledges that some House legislation would regulate payday lenders, who make short-term, high-interest loans to people who promise to pay in full with their next cheque.
Congressional Democrats and administration officials would not comment on the record about the concerns of non-financial companies, partly because they said many elements of the legislative proposals are still under discussion in an effort to garner Republican support in the Senate.
But a senior Democratic aide said that, despite the concerns voiced by non-financial firms, “the Bill doesn't target those companies. It targets the large financial companies, and it changes things for the large financial companies.” The aide said that opponents of the legislation in the private sector have sought to stir concerns about the proposal by citing unfounded or exaggerated complaints about its wider implications.
Legitimate or not, those concerns have taken hold across a wide swath of private companies, interviews show.
From the chamber of commerce on down to retail outlets and small manufacturers, the businesses have adopted a similar rallying cry: we didn't get the country into this mess, and we should not be penalized for it.
Typical was a missive last week from the head of USAA, the military-based insurance company, imploring its customers to contact their senators with their concerns about the legislation.
“Rarely in our 87-year history have we turned to USAA members to weigh in with elected representatives on an issue of great importance,” said Joe Robles Jr, a retired general who is president of USAA. “But we are now.”
He added that the inclusion in the Senate Bill of the so-called Volcker rule, banning financial institutions from engaging in proprietary trading, would unfairly harm the company’s finances. “USAA is not like the banks and other companies that helped bring down our economy,” he said. “We do not engage in the harmful practices this legislation seeks to resolve.”
Besides the Volcker rule, non-financial companies are concerned about the creation of the consumer protection board, which they say could subject numerous businesses to increased federal regulations. Some universities say the broad definition of financial companies would mean, ultimately, greater costs on some student loans.
©2010/THE NEW YORK TIMES
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First Published: Tue, Apr 27 2010. 11 02 PM IST