Meet, Comment, Meet Again: The Gains from Lobbying Financial Regulators During Rulemaking Article Swipe
Administrative procedures create two legitimate avenues for interest groups to channel their views about agency-made regulation: ex parte meetings and public comments. Meetings happen in the rule development stage, after a regulation is proposed but not yet finalized, or after the regulation is published in its final, legally enforceable form. Comments generally are only received after proposal but before finalization. While there is abundant evidence that comments appear to influence regulation, there remain many questions about how influential comments “truly” are, and whether these associations mask the more pivotal, if harder to observe, role of ex parte meetings as means of outside group influence. Using meeting logs made publicly available by the Federal Reserve and original data collection about public comments, I apply event study methods to evaluate how the gains from meetings and comments relate to one another. My findings suggest that comments and meetings, particularly early meetings, are economic complements. Each avenue of influence seems to bring consistent benefit, at least in the market’s view, and the benefits appear stronger in combination than separately. In particular, firms that have access to early meetings receive intra-day returns as much as 37 percentiles higher as compared with firms that do not obtain early access but engage both forms of post-proposal advocacy. These abnormal returns have an economic value in the tens of billions of dollars, reflecting important distributive consequences to who obtains access pre-proposal.
