The same Washington lobbyist who led the sub-prime mortgage industry’s successful bid to shoot down government efforts to curtail risky lending is now helping pay-day lenders to water down the financial-regulatory reform bill currently before Congress.
Wright Andrews has developed a niche representing some of the least sympathetic and most predatory players in the financial industry. A veteran lawyer-lobbyist and one-time aide to Democratic senator Sam Nunn, Andrews has lobbied extensively of late for a trade association for pay-day lenders — which offer short-term, high-interest loans to the working poor, often triggering a cycle of debt for their customers. During the last decade, Andrews ran three different trade groups for the sub-prime mortgage industry, whose home loans defaulted in massive numbers to set off the financial crisis.
In addition, Andrews’s wife, Washington PR maven Lisa Andrews, was a top executive for a major sub-prime firm, and now works as a lawyer for a trade group of major Wall Street banks. And for good measure, Wright Andrews — who in 2002 broke with many in the lobbying world by supporting campaign-finance reform — also did a stint as president of a trade association that represents Washington lobbyists.
Andrews, a South Carolina native, told TPMmuckraker: “I do not comment on client representations.” But according to federal disclosure filings examined by TPMmuckraker, his lobbying firm, Buttera & Andrews, has taken in almost half a million dollars over the last two years from the Community Financial Services Association (CFSA), a trade group of pay-day lenders. That was for Andrews’s lobbying work on the financial regulatory reform bill, and other legislation affecting regulation of the pay-day lending industry. Andrews has lobbied for CFSA since 2002, the records show.
The trade group appears to be getting a hefty bang for its buck. Sen. Chris Dodd, who chairs the Senate Banking committee, recently agreed to weaken the provision in the regulatory reform bill that deals with the pay-day lenders, after an intervention from Sen. Bob Corker (R-TN). The new consumer agency that the bill will create now will have to get permission from a body of regulators in order to enforce rules against payday lenders and other non-bank financial companies — a step that consumer groups say will significantly hamstring the agency’s ability to crack down on predatory lending practices.
Pay-day lenders offer short-term loans designed to tide customers over until their next paycheck. But the interest rates can be as much as 400 percent on an annualized basis, meaning that many borrowers end up digging themselves deeper into debt.
CFSA was created in 1999, in part by high-living pay-day lending CEO Allan Jones, a Tennessean and long-time Corker friend and backer, in order to put a more respectable gloss on the fast-growing and much-maligned pay-day lending industry. The trade group argues that the pay-day lenders didn’t cause the financial crisis, and therefore don’t deserve to be punished. But consumer groups and their allies in Congress and the administration counter that the competitive pressure on the banks from less regulated sectors like the pay-day lenders prompted the banks to lower their lending standards, helping to create the mortgage crisis. And they add that the predatory practices of the pay-day lenders merit greater regulation in their own right.
Rep. Barney Frank (D-MA), who chairs the House Financial Services committee, yesterday said on MSNBC that it would be a “great mistake” not to regulate payday lenders. And in a press release sent today, Sen. Chuck Schumer (D-NY) called them “some of the shadiest actors on the scene today,” and condemned the recent softening of the legislation.
But the pay-day lending industry is far from the first unpopular client that Andrews has taken on. During the last decade, Andrews lobbied for and led three different trade groups set up by the sub-prime mortgage industry as it fought to stymie state efforts to crack down on predatory mortgage lending. Defaults on home loans made by sub-prime lenders, of course — loans which often came with far more hidden fees and penalties than do conventional bank loans — were the primary trigger for the financial crisis whose effects are still being felt.
Buttera & Andrews was paid over $1.2 million by the Coalition for Fair and Affordable Lending (CFAL), disclosure records show. CFAL went defunct in 2007 after spending $6.3 million lobbying against state laws, according to the Wall Street Journal. Buttera & Andrews also took in $480,000 from the National Home Equity Mortgage Association (NHEMA), and another $240,000 from the Responsible Mortgage Lending Coalition. All three of those groups were essentially lobbying associations for the sub-prime industry, and Andrews reportedly ran all off them.
In 2003, Andrews’s wife, Lisa Andrews, who ran a Washington PR firm, was made a senior vice president for government affairs at Ameriquest, which at the time was a top sub-prime mortgage lender and a member of NHEMA. Ameriquest’s moment of glory came when it sponsored the 2005 Super Bowl halftime show. But later that year, it came to a $325 million settlement with a task force of 30 state attorneys general over allegations of deceptive sales practices. It later disintegrated amid the mortgage meltdown and no longer exists. Lisa Andrews is now a lawyer for the Financial Services Roundtable, which itself has been fighting financial-regulatory reform, and boasts JPMorgan Chase, Citigroup, and other behemoths among its members.
From 1994 to ‘95, Wright Andrews served as president of the American League of Lobbyists, a trade association for professional federal lobbyists. He has been named one of Washington’s 50 top lobbyists by Washingtonian magazine.
But his work for the sub-prime and pay-day lender industries doesn’t necessarily tell the whole story. In 2002, the New Republic described Andrews as “the Washington lobbying community’s leading moralist,” and that year he published an op-ed in the Washington Post explaining why he was supporting the McCain-Feingold campaign-finance reform bill.
Andrews has been a prodigious political giver, to candidates from both parties, over the years. Among many others, he has contributed to President Bush, the DSCC, and several lawmakers on the banking and financial services committees, including Dodd, Sen. Tim Johnson (D-SD) and Rep. Gregory Meeks (D-NY), according to online records. And in 2008 Andrews gave $500 to CFSA, on whose behalf he has been lobbying.