Banks look to play larger role

Several large financial firms that previously watched Washington from afar are looking for bigger roles in the capital.

As Congress and the Obama administration push a major overhaul of the financial industry, large banks and other companies are beefing up their lobbying arms and taking a more active role in policy debates.

{mosads}The government stepped in with trillions of dollars in direct aid and guarantees for the industry when the financial crisis erupted. As banks return to profit and repay bailout money, the action has shifted to regulatory reform efforts in Congress that could have a big impact on how financial-services companies operate.

The House passed broad legislation in December. The Senate is also at work on major changes on consumer protection, derivatives and bank regulation.

Bank of New York Mellon set up its first Washington office last year and hired Ann Costello, formerly of Goldman Sachs, as its first head.

Rob Getzoff, previously with Citigroup and a former counsel to now-White House Chief of Staff Rahm Emanuel, recently joined the bank’s D.C. office as the senior Democrat.

And the bank’s CEO, Robert Kelly, was recently named head of the Financial Services Forum, a prominent D.C-based association made up of 18 industry chief executives.

After spending roughly $550,000 lobbying in all of 2008, the bank spent more than $775,000 through the first nine months of 2009.

Meanwhile, industry sources say that major banks PNC Financial Services and U.S. Bancorp are testing the waters to establish a larger lobbying presence. Even if they don’t expand or set up official D.C. offices, the two banks are already taking on more prominent roles in Washington.

Richard Davis, CEO of Minneapolis-based U.S. Bancorp, is chairman of the Financial Services Roundtable, the lobbying association representing 100 large financial firms. The bank also joined the Forum late in 2009.

“We’re just considering options given the focus on issues impacting us and Richard’s role as chairman of the Financial Services Roundtable. We’re considering our options,” said Deb Burke, of U.S. Bancorp.

Davis and PNC Financial Services Chairman Jim Rohr both publicly spoke on behalf of the industry after President Barack Obama called a meeting in December with the heads of the big banks. Rohr is also chairman-elect of the Financial Services Roundtable’s board.

Obama and senior administration officials have ramped up their calls on the nation’s biggest banks to boost lending and have criticized the banks for paying lavish bonuses.

{mosads}Bank of New York Mellon, U.S. Bancorp and PNC are all in the top 15 largest bank holding companies in the country, according to government data.

Each has more than $200 billion in total assets, and each received billions of dollars in government bailout money.

Bank of New York Mellon and U.S. Bancorp have both repaid the money from the Troubled Asset Relief Program (TARP), while PNC has $7.6 billion outstanding, according to the Treasury Department.

A PNC spokesman declined to comment on whether the bank is actively looking to hire in Washington.

“PNC would not comment on its employment efforts and its staffing,” said Fred Solomon, a bank spokesman. “That is a rumor and we would not comment on rumor or speculation.”

Meanwhile, Allstate, the major insurance firm, is also looking to expand its Washington office. Apart from the financial overhaul under debate, lawmakers are expected to consider setting up a new federal charter for insurance.

The House Financial Services Committee is expected to debate the issue this year, after deciding to leave it out of the broader financial bill that the House passed in December. Congress may also take up legislation to improve teen driving safety that could affect the insurance industry.

Allstate is considering hiring at least one additional staffer in the D.C. office and is also looking to move its physical office closer to the Capitol.