Consumer Protection Is a Partisan Issue

When voters go to the polls this November, many will base their decision solely on the state of the economy. Yet their vote may have far more of an impact on their pocketbooks in ways they never even contemplate. That's because when it comes to consumer issues — and all of us are consumers — legislators from the two major parties vote very differently.

You can see this by examining what happens in the Senate when banks and other lenders square off against consumers. My student, Andrew Lipkowitz, and I reviewed 21 Senatorial votes, going back to 2009, in which consumers stood to gain in transactions with financial institutions. The results show remarkable partisanship. Every Democratic senator voted for consumers at least half the time, while six did so 100% of the time; the average Democratic senator scored 86% on our pro-consumer scale.  By contrast, the highest-scoring Republican, Scott Brown of Massachusetts, voted with consumers half the time while a dozen of the Republican senators who cast at least 20 votes voted against consumers 90% or more of the time. The average Republican score was 12%.

Take out the two votes in this period that consumers were most likely to pay attention to – the votes on the Credit Card Accountability Responsibility and Disclosure Act of 2009 and the Dodd-Frank Act ,which created the Consumer Financial Protection Bureau – and the differences become even more stark: Every Democrat scored higher for consumers than every Republican.

Votes likely to fly under the public's radar can be particularly revealing.  For example, consumers probably don't pay attention to procedural votes, like a motion to reconsider cloture, or votes on eye-glazing complex issues, such as an amendment to determine when state law will be inapplicable to credit card interest rates. As such, consumers cannot be expected to vote against senators just because they vote for the banks on such issues, and so senators can take the banks' side in attempts to curry favor with them without fearing that they will suffer at the ballot box. And yet, the average Democratic senator voted for consumers 88% of the time on such under-the-radar votes.  In comparison, of the 33 Republicans who voted on at least 15 such issues, only four voted for consumers five or more times. The average Republican score: 9%.

The financial industry, however, does seem to pay attention to these under-the-radar votes, judging by campaign contributions from commercial banks, savings and loans facilities, credit unions and the like.  According to figures drawn from the Center for Responsive Politics' data for senators who cast votes on issues pitting consumers against financial institution at least sixteen times, on average those with a pro-consumer score of 35% or less had contributions from such sources 58% higher than those with a score of 65% or higher.  Put another way, the banks are getting what they pay for.

What does this mean for voters?  Voters who think, for example, credit card late fees should be required to be reasonable or credit card companies should have to give consumers notice before raising interest rates or should have to give consumers 21 days to pay bills before charging late fees — all things many Democrats voted for and many Republicans opposed —should vote Democratic.  But voters who believe banks should not have to answer to a consumer regulator should vote Republican.

In short, when it comes to consumers versus financial institutions, Democrats are the party of consumer protection; Republicans are the party of banker protection.  And you can take that to the bank.

Jeff Sovern is a professor at St. John's University School of Law and co-coordinator of the Consumer Law and Policy Blog, though the views expressed here are his alone.