By Zach Fox

Zach Fox is a senior reporter and columnist with SNL Financial. The views and opinions expressed in this piece are those of the author and do not necessarily represent the views of SNL. Share your thoughts at [email protected]

For the first time since lobbying disclosures were electronically available, the National Association of Realtors spent more on lobbying activities in the second quarter than the entire commercial banking sector.

In the second quarter, NAR spent $16.5 million on lobbying activities, a 64% leap from $10.1 million in the 2012 second quarter, the last election year, according to filings posted on a disclosure site maintained by the House of Representatives. The second-quarter figure was more than double the real estate group's spending in the first quarter and an 80% jump from the 2013 second quarter.

"You would compare the second quarter of 2014, an election year, to the second quarter of 2012, and you can see the difference is really made up by independent expenditures," said Jenny Werwa, the NAR's public issues media manager.

Werwa told SNL that the NAR has done independent expenditures "on and off since the 1980s" but started increasing such spending in 2012. She attributed the spike in the second quarter mainly to a decision by NAR to engage in the primary elections, as opposed to focusing on general elections. In contrast with more traditional lobbying spending, in which lobbyists engage government agencies, independent expenditures typically target elections via media campaigns or other spending outside the realm of campaign contributions.

The Realtors' lobbying expenditures of $16.5 million in the second quarter eclipsed the $15.3 million spent by the commercial banking sector, as defined and reported by the Center for Responsive Politics. It was the first time the Realtors spent more on lobbying activities than the banking sector since 1998, the first year electronic data was available via the Lobbying Disclosure Act of 1995.

The second-quarter spike in NAR spending helped push spending by the real estate sector up to $26.1 million, an amount that beat the securities and investment sector's spending of $23.4 million in the quarter. The insurance sector continues to be the biggest spender among the industries under the category of finance, insurance and real estate, with the insurance industry spending $36.9 million in the second quarter.

However, relative to the 2012 second quarter, spending by the real estate sector increased much more dramatically. The insurance industry's spending increased by 2.9% between the 2012 and 2014 second quarters, and the securities and investment spend dropped by 8.5%, while the spending in the real estate sector leaped 28.7%. Spending among the six largest financial companies has been relatively steady over the years, with aggregate lobbying spending among the six firms in the second quarter totaling $6.8 million, down 1.0% from the 2012 second quarter.

The real estate industry has faced a slew of new regulation, particularly in the mortgage origination and underwriting process. At the center of these rules is the Consumer Financial Protection Bureau, a new regulator created by Dodd-Frank and tasked with writing the qualified mortgage standard.

It is difficult to assess how often lobbyists have contacted the agency in its three years of existence because lobbyists cannot select the regulator on the lobbying disclosure form. The form includes a field for government entities that lobbyists contacted during the quarter. Lobbyists can select from 248 different government agencies, but the CFPB is not one of them.

Omission of the CFPB appears to be an oversight. The regulator's 2015 plan includes a budget of more than $583 million and a full-time staff of 1,796 employees. Meanwhile, the Advisory Council on Historic Preservation, which is one of the 248 agencies listed on the forms, has a 2015 budget plan of $6.2 million with 36 full-time employees.

When SNL contacted the Senate Office of Public Records on the topic, an official appeared to confirm that the omission of the CFPB from the form was an oversight.

SNL contacted both the Senate Office of Public Records and the House of Representatives' Office of the Clerk — the departments in charge of lobbying disclosure forms — and officials at both offices told SNL that the agency list is regularly updated, but they could not provide a time frame for when the CFPB would be added. Both officials declined to provide their names; the CFPB has been in operation since 2011.

While lobbyists cannot select the CFPB as an agency that they contacted, lobbyists have to detail all activities in an open-ended issue data field.

In the Realtors' second-quarter filing, the organization disclosed lobbying the CFPB on the qualified mortgage standard, as well as the Real Estate Settlement Procedures Act and Truth In Lending Act, a pair of regulations the CFPB is streamlining in a way that has triggered some industry concern. That second-quarter filing did not, however, include a mention of the 3% cap on points and fees in the qualified mortgage with regard to the CFPB, which had been included in the group's first-quarter filings.

On April 30, the CFPB proposed a method for curing loans that inadvertently exceed the cap, as not all fees are wholly predictable. The NAR mentioned the change in policy on its website, noting that its data show lenders have been building in cushions to ensure staying under the cap.

NAR's Werwa told SNL that the elimination of the 3% cap in the issue data was because NAR's main problem with the cap was over which fees counted, an issue that Werwa said could only be resolved legislatively due to Dodd-Frank's specific language. In both filings, the Realtors mentioned the Mortgage Choice Act, H.R. 3211, which would address the issue.

Some other industry groups have not been shy about their distaste for the CFPB, particularly what they deride as enforcement-by-guidance. And the sentiment is somewhat mutual, said Rick Fischer, a lobbyist and partner with Morrison Foerster.

"As far as the agency is concerned as a whole, lobbying is something that never should have started in the lobby of the Willard Hotel," Fischer told SNL, clarifying that the CFPB's markets experts are willing to take questions and engage in dialogue. But the enforcement and supervision departments, the regulator's largest, are not willing to listen to lobbyists, Fischer said.

"They don't like lobbying, and they don't want to be lobbied," he told SNL.

Facing intransigence at the CFPB, some industry groups have turned to Congress instead, seeking legislative changes that would force the bureau to change. A notable example comes from the CFPB's investigation into indirect auto lending, a space in which the regulator has leaned on the controversial disparate impact theory — that statistically significant negative outcomes for minorities prove discrimination, regardless of intent. The CFPB has made clear it is not backing off of disparate impact, and the National Automobile Dealers Association has put H.R. 4811 at the top of its legislative priorities. The bill would force the regulator to rescind its guidance on indirect auto finance and require prior public notice on future guidance.

"They made the argument with the bureau, got nowhere, and so they went directly to Congress," Fischer said.