Financial Regulation: Popular, But Less So

Word of a possible deal on financial industry regulation may be encouraging to most Americans: Sixty-two percent in our latest poll favor the idea, with support crossing the partisan spectrum. But that’s well down from its peak, suggesting that critics still could get a shoe in the door.

Seventy-two percent of Democrats, 62 percent of independents and 52 percent of Republicans support stricter federal regulations of banks and other financial institutions, our ABC News/Washington Post poll finds. Overall support, though, is 14 points lower than it was when we first tested the idea a year ago, with the decline occurring pretty much across the political board.

Backing off a Democratic-only plan, Sen. Chris Dodd, D-Conn., the Banking Committee chairman, said today he was negotiating a regulation package with Republican Sen. Bob Corker of Tennessee. Dodd said he’s hopeful of a deal.

One element sure to be on the table is how strict new banking regulations should be, and on that there’s a division, and another decline – 36 percent of Americans say new rules should be “much” stricter, down from 49 percent a year ago. An additional 26 percent say they should be stricter, but just “somewhat.”

Love of Wall Street is not behind the shift in attitudes: In our poll last month 79 percent of Americans said the country’s banks and other financial institutions bore blame for the economic crisis, steady from last spring. But new restrictions may be seen as chiefly a product of the Obama administration, and it’s lost support on this, as well as other issues, in the past year. As we reported yesterday, Obama’s lead over the Republicans in Congress in trust to handle the economy has shrunk from 37 points a year ago to a mere 5 points today.

Our new poll shows two other continued concerns about the financial system. Americans divide about evenly, 48-52 percent, on whether the government is or is not putting measures into place that will make another crisis less likely in the future (with vast partisan and ideological gaps). And 60 percent are not confident that financial institutions will change their business practices to the same end.

Notably, people who think the banks won’t act by themselves are twice as likely as others to say regulation should be “much” stricter than it is now.

Click here for the poll questions.