Texas PACs 2000 Election Cycle: Finance: $2,439,442

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Texas PACs 2000 Election Cycle

Finance: $2,439,442

Forty Finance PACs spent almost $2.4 million, down 24 percent from what this sector spent in 1998. PAC spending by all four Finance PAC subcategories (Banks, Non-Bank Lenders, Securities and Accountants) declined during this period.
The largest category—Banking PACs—spent $1.6 million in 2000, down 14 percent from the previous cycle. The biggest Bank PACs were Compass Bancshares, Bank of America and Bank One. Bank of America’s apparent huge increase in spending is misleading due to this bank’s merger with NationsBank. Bank of America’s 2000 PAC spending actually falls short of the $223,355 that the NationsBank’s PAC spent in 1998.

Non-Bank Lenders spent $386,940, down 14 percent from 1998. This decrease was due to the Associates First Capital Corp., a notorious home-equity lender that slashed its PAC spending after Citigroup bought the company and pledged to stop its worst lending practices.⁹ Other predatory lenders, however, accelerated PAC spending. These lenders became alarmed early in 2001, when Senator Royce West introduced a tough bill to rein in industry abuses.¹⁰ While the resulting law contained useful provisions, industry lobbyists had knocked out most of its teeth. At the same time, Senator John Carona introduced seven bills to aid predatory lenders. Governor Perry signed four of these bills, which will cost Texans up to $703 million a year.¹¹ Large PACs with an interest in predatory lending include: the Texas Mortgage Bankers, the Texas Consumer Finance Association (representing “signature-lenders”), Cash America (a pay-day and pawn lender), and the Texas Financial Services Association, which is funded by Associates First Capital and Household International.
The final Finance subcategories were Accounting ($382,958), dominated by the Texas Society of CPAs, and Securities ($46,750), led by AIM Management mutual funds ($26,000).

9 For more on these abuses, see the 1998 edition of this report. This PAC spent $255,080 in 1998.
10 As introduced, SB 1581 would have barred: loans to people who had no hope of repayment; “credit life insurance” (to repay mortgages in the event of injury); and binding arbitration on mortgage disputes.
11 See “Sale Leaseback Lenders Defy Regulation,” Consumers Union, February 2001; “Unlucky 7: Bills Increase Cost of Borrowing by Hundreds of Millions,” Consumers Union, March 2001.