The lawmakers were at an impasse.

Related: Key findings:

More than two hours into a meeting of the House Financial Services Committee last month, the members were bickering over two versions of a bill designed to ease a new regulation that affected banks, part of the sweeping 2010 overhaul of financial laws known as the Dodd-Frank Act.

Related: Rep. Scott Garrett, R-N.J.

The dispute? Whether to give the banks everything they asked for, or whether to give them even more.

Related: Rep. Jeb Hensarling, R-Texas

Rep. Scott Garrett, R-N.J., asked to postpone a final vote so he could contact “stakeholders,” code for the bankers who wanted the change. Then Rep. Jeb Hensarling, R-Texas, the committee’s ambitious chairman, attempted to retake the discussion with what passes for a joke in the oxygen-starved air of the wood-paneled hearing room in the Rayburn House Office Building on Capitol Hill.

Related: Rep. Blaine Luetkemeyer, R-Mo.

“Occasionally we have been accused of trying to undermine aspects of Dodd-Frank,” Hensarling said with a chuckle. “I hope we’re guilty of it.”

Related: Rep. Steve Stivers, R-Ohio

Hensarling was being modest. With a 29-person committee staff, dozens of congressional colleagues and legions of lobbyists lined up to beat back any attempt to impose new discipline on the industry, the 56-year-old from Dallas is well on his way to achieving that goal.

Related: Rep. Shelley Moore Capito, R-W.Va.

Bankers’ best friends

Related: Rep. Jim Himes, D-Conn.

Every business sector has its friends in Washington. Financial companies — from the biggest megabanks to small payday lenders — have some of the best.

Related: Rep. Ed Royce, R-Calif.

Less than six years after a massive financial crisis drove the U.S. banking system to the edge of collapse, leading to a $700 billion government bailout and a recession that destroyed as much as $34 trillion in wealth, bankers and lawmakers are working in concert to undermine Dodd-Frank, an 849-page law designed to prevent another failure.

Story continues

Related: Rep. Gregory Meeks, D-N.Y.

There are more than 2,000 lobbyists for financial firms and trade groups and many are spreading money around Washington, enlisting like-minded members of Congress to write letters, propose legislation, hold hearings and threaten agency budgets as they pressure regulators to ease up on banks.

Related: Anatomy of a lobbying effort

Regulators say they try to treat input from lawmakers like that from anyone else.

Related: Rep. David Scott, D-Ga.

However, “there are all these other factors, like the budget, like the fact that they can call you up to testify, and they can make your life pretty miserable,” said the former head of one regulatory agency who asked not to be identified, as did many of those contacted for this story.

Related: Rep. Ann Wagner, R-Mo.

The campaign is working. While Hensarling’s committee can’t move legislation on its own — the Senate Banking Committee supports Dodd-Frank — the House panel can work its will in other ways. And it has. Almost four years after Dodd-Frank became law, community banks face lower capital standards than originally proposed and are therefore more likely to fail; fewer derivatives traders have to register with regulators and they face lower hurdles in booking trades than they otherwise would have, partly undermining the law’s aim to make this corner of the financial system more transparent; and big banks may soon have a green light to keep investing in potentially risky securities that regulators tried to limit.

Related: Rep. Sean Duffy, R-Wis.

In the current election cycle, employees and political action committees of financial companies have donated nearly $149 million to congressional candidates, more than any other industry, according to data compiled by the Center for Responsive Politics. That’s more than two-and-a-half times the $57 million donated by the health care sector, the second-most-generous industry.

Related: Former Rep. Brad Miller on congressional fundraising

“It’s an exceedingly rich industry with a lot at stake,” said Brad Miller, a member of the House financial committee from 2003 until he left office in 2013 and currently a lawyer with the firm Grais & Ellsworth. With lawmakers under constant pressure to raise money, Miller said, deep-pocketed lobbyists “don’t have to worry about having access to members, because all you have to do is wait for the phone to ring — and you don’t have to wait very long.”

Related: Financial lobbyist on letter-writing campaigns

The Banking Caucus

The Center for Public Integrity reviewed political finance records; members’ voting records; public statements; and correspondence between Congress and financial regulators to identify the House’s unofficial banking caucus — the financial industry’s go-to lawmakers on the Financial Services Committee.

In addition to Hensarling and Garrett, the banking caucus includes Reps. Shelley Moore Capito, R-W.Va.; Sean Duffy, R-Wis.; Jim Himes, D-Conn.; Blaine Luetkemeyer, R-Mo.; Gregory Meeks, D-N.Y.; Ed Royce, R-Calif.; David Scott, D-Ga.; Steve Stivers, R-Ohio; and Ann Wagner, R-Mo.

The center of this alliance is Hensarling, a sharp-tongued Texan who learned his skills as a staffer for an iconic Lone Star State politician, former Sen. Phil Gramm. Hensarling has thick gray-brown hair and eyes that slant down at the corners, giving the impression that he’s on the verge of breaking into a boyish smile. Because of his ties to the House leadership, Hensarling leapfrogged senior members to become committee chair last year when Rep. Spencer Bachus, R-Ala., stepped down because of term limits set by House Republicans.

Operating with a strict, top-down style, Hensarling’s staff, with the help of lobbyists, orchestrates hearings, decides which proposals by regulators merit a letter from Congress and who should sign that letter, according to former committee staffers who have worked with him.

One subcommittee, for example, has spent months crafting a broad “indictment” of the Dodd-Frank Act. The chair of another drafted a letter to regulators and sent it directly to the American Bankers Association so the industry group could pressure other lawmakers to sign on.

Several members of the banking caucus have close ties to the financial industry predating their arrival in Congress, making them especially reliable in corraling cosponsors for a bill or signatures for a letter to regulators. Stivers, for instance, was the top lobbyist until 2002 for Bank One, where Jamie Dimon became CEO in 2000. (JPMorgan Chase & Co. bought BankOne in 2004 and made Dimon president; he became CEO of the world’s biggest bank a year later.)

Luetkemeyer’s family owns a community bank. He has a decades-old relationship with Camden Fine, the top lobbyist for small banks, and is sponsoring a package of rule changes sought by Fine’s organization. “Luetkemeyer is positioned and ready to fight for our industry,” a magazine published by the Independent Community Bankers of America proclaimed in 2011.

Capito, who chairs the subcommittee that oversees consumer lending and finance companies, is married to a banker who has worked for Wells Fargo and Citigroup. Himes spent 12 years at Goldman Sachs Group Inc. before joining a nonprofit housing group in 2002. He represents the tony New York suburb of Greenwich, Conn., which is home to some of the world’s largest hedge funds.

Others align with single industries. Royce, for example, has developed a near-symbiotic relationship with the credit union industry in the 21 years since he took office. He has raised more than twice as much from credit unions as any other lawmaker, and has sponsored at least 11 bills seeking to relax rules that frustrate the industry. Several sought to loosen limits on commercial lending by credit unions, a fight he pledged to continue in a Feb. 25 speech before 4,400 credit union employees and advocates at the Credit Union National Association’s annual conference in Washington. He filed the latest version of the bill on March. 13.

And several former staffers with ties to Hensarling or the committee are now working on the other side. Just as Hensarling rose to become committee chair, his chief of staff of eight years, Dee Buchanan, decamped to Ogilvy Government Relations where he lobbies for the American Bankers Association, insurers and a private equity firm. Former committee chief of staff Larry Lavender now lobbies at the firm Jones Walker for JPMorgan Chase & Co. and payday lending giant Cash America International.

Fundraising platform

There’s more to this story. Click here to read the rest at the Center for Public Integrity.

This story is part of Finance. The latest investigations about U.S. financial reform, corporate accountability and consumer finance. Click here to read more stories in this investigation.

Related stories

Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.