Meetings, Comments, and the Distributive Politics of Rulemaking

Rulemaking procedures provide interest groups two opportunities to persuade regulators: ex parte meetings and public comments. Regulated entities use both avenues more extensively than other groups, but how much do they gain by doing so? By analyzing changes in the stock price of firms in the hours following rule announcements, I study the effect of lobbying on Dodd–Frank implementation at the Federal Reserve Board. I find that meetings and comments were associated with abnormal returns in the tens of billions, yet meetings were worth more. Returns of firms that met or commented were excessive in comparison to baseline expectations and the performance of all their disengaged competitors. When comparing firms that lobby with their most similar competitors, however, only meetings are associated with excess returns. By comparing comment requests to rule texts, I show that policy concessions were both pervasive and correlate with market outcomes. I connect these findings to contemporary debates about the design of administrative procedures and regulatory inequality.