Sporting his signature flat-top and Dickies work jacket, Montana Democratic Sen. Jon Tester likes to remind voters that he’s cut from a different cloth than most other politicians. “I still get a $12 flattop haircut, and I'm still the only working dirt farmer fighting for rural America in the Senate,” Tester wrote recently on X. While it’s certainly true that Tester is unique among his colleagues in many ways—for one, he is the only member of Congress who voluntarily discloses his meetings with lobbyists—there’s one big thing he shares with many other politicians in D.C.: campaign support from Wall Street.
Yesterday, the American Bankers Association (ABA), a lobbying group for the biggest banks on Wall Street, began airing ads on Montana media that praise the senator for opposing banking regulations and urge him to continue doing so. In one of the ads, titled “Basel,” the bank industry group says, “Tester opposed Washington's attempts to make it harder for Montana's banks to support local businesses,” a reference to the senator’s reservations about the Basel III Endgame proposal that would revise capital requirements for large banks.
Tester’s campaign did not respond to a request for comment on the bank group’s ads.
The Basel III Endgame proposal, which was published by the Biden administration last July and is in the process of being finalized, would require banks with more than $100 billion in assets to use a new standardized approach for measuring their risk levels and to include unrealized capital gains and losses in their calculations. Unrealized capital losses were one of the primary catalysts for the collapse of Silicon Valley Bank, which faced a bank run in March 2023 after it announced it had sold nearly $2 billion worth of securities at a loss. Regulators say the proposal is meant to “improve the strength and resilience of the banking system,” while the banking industry argues that it was poorly designed and will limit bank lending throughout the economy.
The other ad, “1071,” praises Tester for opposing a Consumer Financial Protection Bureau proposal that would require banks to collect and report more data from small business loan applications.
Because the ads do not explicitly advocate for Tester’s re-election and they are not being aired within 30 days of Montana’s primaries, the ABA does not have to disclose how much it is spending to run the ads. The ABA is funded by contributions from banks including Bank of America, Wells Fargo, and Citigroup, as well as from credit card companies American Express and Mastercard.
As Sludge reported in December, Tester became one of the first Democrats in Congress to express concern about the proposal shortly after meeting with bank lobbyists.
On the morning of November 14, Tester met with Goldman Sachs’ Vice President of Government Affairs Jill McCarthy and Managing Director of Government Affairs Amy Hunt, along with several owners of Montana businesses, according to his public calendar. Hours later, at a Senate Committee on Banking, Housing, and Urban Affairs hearing, Tester said he had “some concerns about the proposed changes, and what its impact will be on workers and households, small businesses, access to credit, and the overall vibrancy of our capital markets.”
“These rules don’t affect any banks in Montana, but they do affect the big guys that affect Montana,” said Tester. “From a small business standpoint, if this rule doesn’t work, it’s going to raise hell with the economy of my state.”
Goldman Sachs’ 10,000 Small Business Voices, of which McCarthy is a member, is running a massive campaign against the Basel proposal that calls on policymakers to “stop the squeeze on small businesses.” The Wall Street investment bank, one of the largest bank holding companies in the United States, has been the biggest corporate backer of Tester’s campaigns, according to OpenSecrets. The company’s executives and employees have donated at least $259,205 to Tester and its PAC has donated $30,000. In the fourth quarter of 2023, Goldman Sachs executives and employees donated $55,500 to Tester’s campaign, according to Federal Election Commission data.
“We appreciate Sen. Tester’s strong opposition to new rules that would raise costs for consumers and make it harder for banks to lend to Montana’s small businesses, farmers and ranchers,” ABA President and CEO Rob Nichols said in announcing the ads. “His work helps ensure that local businesses can continue to create jobs and drive economic growth.”
Financial regulation advocacy group Americans for Financial Reform said in a letter to Tester and other members of the Banking, Housing, and Urban Affairs Committee that arguments that raising capital requirements will decrease lending do not hold up. The group points to data published in a textbook by economists Stephen Cecchetti and Kermit Schoenholtz that show that “between 2013 and 2019, when bank capital levels were going up, the rate of overall credit availability remained robust—and that the portion of credit provided by banks, as opposed to nonbanks not subject to the new rules, actually went up.”
