Citibank and the Gray Panthers: How the Consumer Movement Allied with Wall Street for Financial Deregulation

Conrad Jacober, Johns Hopkins University

In 1980, Jimmy Carter signed into law the Depository Institutions Deregulation and Monetary Control Act (DIDMCA), phasing out Regulation Q interest-rate caps on bank deposits. Commercial banks faced the harshest restrictions under Regulation Q and had lobbied unsuccessfully for deregulation since the 1960s, failing largely due to opposition from more powerful lobbying groups representing Savings and Loan Associations (S&Ls) and the real estate industry. How, then, did commercial banks ultimately win deregulation? I argue that the key to their success was winning over another interest group to their cause: consumer advocates and the small savers movement. Drawing on the Gray Panthers Records (Temple University) and the Walter B. Wriston Papers (Tufts University), I show how Citibank worked with the Gray Panthers and Public Advocates to garner support for ending Regulation Q. Citibank organized an aggressive public relations campaign to build pressure for deregulation, plastering their branches with anti-Regulation Q posters and taking out full-page newspaper ads warning savers that they were losing money on their deposits due to regulation. Following meetings with Citibank executives, representatives for Public Advocates and the Gray Panthers testified in congress against Regulation Q, making the same arguments as Citibank for deregulation. Thereafter, the Gray Panthers organized a congressional pressure campaign, whereby, according to economist George Kaufman, “Panthers flooded the halls of Congress, attended hearings on any subject, and buttonholed representatives and staff at every opportunity.” By organizing a dual-front lobbying campaign from above and from below, Citibank successfully lobbied for the first act of financial deregulation of the postwar era, setting in motion the S&L Crisis and future deregulations. I argue that this curious alliance between Wall Street and far-left consumer advocates was key to building support for financial deregulation within the Democratic Party, which paradoxically began the unravelling of the New Deal financial order.

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 Presented in Session 142. Class, Colonialism, and Empire in US History