"This process raises troubling questions. By shining a light on these practices, I hope we can prevent this kind of fragmented and frustrating effort in the future," said Brown, D-Ohio.
The Senate Banking Committee is scheduled to examine the relationship between Washington and Wall Street Thursday, The New York Times reported.
The issue is exemplified by the consulting firm Promontory Financial Group, which has an A-list of former federal regulators on its payroll, including Mary Schapiro, who last year ran the Securities and Exchange Commission.
The firm was founded by a former top regulator, Eugene Ludwig, a former comptroller of the currency. It earns substantial fees from banks, making up to $1,500 per hour, the Times said. On the other hand, it is also "outsourced," by federal regulators so often it is called a "shadow regulator," the Times said.
About two-thirds of its top executives are former regulators, including Patrick Parkinson, who was a high-ranking officer at the Federal Reserve, and John Murphy, who was a lawyer for the Federal Deposit Insurance Corp. and the Securities Exchange Commission.
The firm says it is not a lobbying group.
"Promontory does not seek to influence regulators and does not lobby," the firm said in a statement. On the other hand, "this does not mean we never attend a government meeting with clients."
A managing director at the firm, Peter Bass, said he did not see a conflict of interest, given it works for bank boards, not for bank management.
"I consider my client to be the board members, who are keenly aware of their responsibilities and want an unvarnished and independent view," he said.
Bass, who is a former State Department official, said he was "in the business of telling inconvenient truths."