Business

Poll Reveals Tepid Support for Controversial Parts of Financial Reform

While Americans broadly favor the idea of broader regulation, the details get tricky.

By Daniel Indiviglio

Financial reform advocates are touting a new poll they believe shows Americans overwhelming support their cause. A Washington Post-ABC News poll (.pdf) conducted over the weekend found that between 63% and 65% of respondents support stricter federal regulation on banks and Wall Street. That clashes with earlier polls that indicated much weaker support for reform. This new poll also shows something else: tepid support for some of reform's most controversial provisions.

First, the poll determined that somewhere between 63% and 65% of respondents somewhat or strong support broader federal regulation of Wall Street and the banks. But then the pollster asked about three contentious options currently under consideration. Here are those results:

  • 43% (16% strongly, 26% somewhat) support "having the federal government regulate the complex financial instruments known as derivatives."
  • 53% (27% strongly, 26% somewhat) support "requiring large banks and other financial companies to put money into a fund that would cover the cost of taking over and breaking up any large financial company that fails and threatens the broader economy."
  • 59% (36% strongly, 23% somewhat) support "increasing federal oversight of the way banks and other financial companies make consumer loans, such as mortgages and auto loans, and issue credit cards."

All of these provisions scored lower than the 63% to 65% who said they wanted reform. They also account for the most controversial portions of the financial reform bill -- those Republicans are most concerned with. This appears to indicate that Americans strongly support the idea of financial reform, but show weaker support for some of the more contentous provisions floating around Congress.

Why did financial reform score so much better in this poll than in prior ones? In early April, one poll found just 44% supported broader financial regulation. Pro-reform groups began heavy advertising campaigns around that time. But as of a week ago, the number ticked up to only 46%, according to a separate Gallup poll. What has changed in the past week? The media carried broad news coverage of the SEC's complaint against Goldman Sachs. The timing of the case appears to have been a nice coincidence for the financial reform effort.