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In the rarified world of top-earning trade association CEOs, one sector is especially well represented: real estate and financial services.

Those hired to oversee the collective interests of insurers, Wall Street brokers, Main Street bankers, as well as the financiers, developers, and sellers of property, make up 28 percent of the top 50 executives in our survey of compensation and benefits.

All earned more than $1.2 million in 2006. How come?

Call it the Willy Sutton corollary. Banks (and their financial brethren) are where the money is, but Washington sets the rules by which they do business. "These are industries that have a lot at stake in Washington because they tend to be heavily regulated," said Edward L. Yingling, president and CEO of the American Bankers Association. "They think it's a worthwhile investment to get good people."

Indeed, many of these executives face a prime opportunity to demonstrate their value this year, as Washington tries to come to grips with the widening fallout from the subprime mortgage crisis.

Yingling, who rose to CEO in mid-2005 after 20 years running the ABA's government relations, says he's a "bit of a throwback" amid a trend toward hiring high-profile outsiders. Among the sector's 12 top-earning trade group chiefs in 2006, two were former members of Congress: the Credit Union National Association's Dan Mica, D-Fla., and the Financial Services Roundtable's Steve Bartlett, R-Texas.

(Hedge-fund managers just hired departing House Financial Services Committee member Richard Baker, R-La., to run their new group, the Managed Funds Association.)

Two of the sector's CEOs at the top of the pay scale are former Republican governors: the American Council of Life Insurers' Frank Keating from Oklahoma and the American Insurance Association's Marc Racicot of Montana. And one CEO, Don Evans, who served as Commerce secretary in the Bush administration, ran the Financial Services Forum until he retired in January. Rob Nichols, a former Treasury official, now runs the group.

The Securities Industry and Financial Markets Association just turned to Wall Street to nab its new CEO, Tim Ryan, formerly of JPMorgan. Ryan, who also learned Washington's folkways as head of the Office of Thrift Supervision in the George H.W. Bush administration, will have to patch up the struggling late-2006 marriage between the Securities Industry Association and the Bond Market Association that created his group. The merged organization has already seen an awkward power-sharing arrangement between former BMA chief Micah Green and his SIA counterpart, Marc Lackritz, come apart. Green made a hasty exit in mid-2007 following the discovery of insider loans at the BMA; Lackritz retired a few months later.

Washington's importance to the sector is also reflected in the amount of money that its executives, trade groups, and corporate political action committees spend to influence Congress. In the 2006 election cycle, they collectively gave $258 million to federal candidates' campaigns and to party committees. The sector was ranked No. 1 in federal lobbying expenditures in 2006, when it shelled out nearly $385 million, according to the nonpartisan Center for Responsive Politics. National Journal's analysis of 2006 IRS filings shows that among trade associations, the finance and real estate groups account for 14 of the top 50 spenders on all forms of lobbying. The fifth-ranked National Association of Realtors led the way, spending more than $18 million.

Gilded though they are, these CEOs must contend with an industry increasingly roiled by technological change and globalization. The ferment is evident in the rise of such industry groups as the Managed Funds Association and the Private Equity Council, and in the rash of recent mergers. A few combinations, such as the ABA's absorption of America's Community Bankers in December 2007, have gone relatively smoothly. Diane Casey-Landry, who headed the ACB, is now the ABA's senior executive vice president. Others have not -- the troubled SIFMA merger is one example; the 2004 merger of the Alliance of American Insurers and the National Association of Independent Insurers to form the Property Casualty Insurers Association of America is another. The PCI's first CEO, Ernie Csiszar, resigned abruptly last fall, following a policy dispute, and one of its major members, Allstate, quit not long after.

Lately, however, a more immediate crisis has eclipsed the stresses of broad industry changes. With perhaps 2 million American families in, or at risk of, foreclosure, banks and hedge funds losing billions of dollars from bets on mortgage-related securities, and a credit crunch that is helping to drag down the larger economy, every aspect of the real estate finance system is under scrutiny by lawmakers, regulators, and the press.

As subprime lenders have been forced to close, suspend business, or merge, several trade groups for such lenders have also disappeared: the National Home Equity Mortgage Association, formerly run by lobbyist Wright Andrews, merged with the Mortgage Bankers Association in 2006, and two other subprime lenders' coalitions run by Andrews have folded.

The Mortgage Bankers Association is also feeling the pinch. The real estate boom had brought a peak membership of 3,000 and record revenues of $50 million over the past two years, says President and CEO Jonathan L. Kempner. Now, expecting a 10-to-15 percent drop in membership and budget, Kempner is shrinking the staff through attrition, and says he expects at best a minimal salary increase himself.

The workload, however, is soaring. "We did everything but bring cots into the office," Kempner said. Group officials testified before Congress 18 times last year, three times their usual pace, and sent 100 official comment letters to Capitol Hill and to regulators.

To critics, the trade groups are merely paying the price of their earlier political successes. "If responsible lending laws had been in place, this [crisis] would not have happened," said Allen Fishbein, housing and credit policy director for the Consumer Federation of America. But preventive measures weren't taken, he said, "because the financial interests were just too powerful."

A recent Common Cause study found that 10 of the top subprime mortgage lenders, their industry trade groups, and corporate parents spent nearly $217 million on federal lobbying and another $24.6 million in PAC donations from 1999 through mid-2007. In December, The Wall Street Journal detailed how Andrews's groups and now-defunct Ameriquest helped stymie tough state laws aimed at predatory lending.

"The credibility of the financial services industry is seriously frayed," said industry consultant Howard Glaser. Trade groups' "denial lasted well beyond the point that most policy makers could understand."

Trade group responses carry more than a whiff of defensiveness. "People continually refer to banks," said the ABA's Yingling, "but the great majority of our members never made one of the loans causing problems," which were instead made by mortgage companies and sold to Wall Street. "We admit responsibility, but we also want to make sure that it's placed in context," said the MBA's Kempner. Despite "some abuses," he said, "a substantially greater number of those [borrowers] are contentedly in homes because of their ability to get a [subprime] mortgage."

Under pressure late last year, the industry launched a voluntary effort, dubbed HOPE Now, to work with some borrowers to prevent foreclosures. The project was conceived by the American Securitization Forum, an arm of SIFMA that represents banks and firms involved in the mortgage-backed security business, and was blessed and promoted by Treasury Secretary Henry Paulson Jr. Nine trade groups, 31 companies, and several nonprofits participate.

Consumer groups, however, say that the effort is far too narrow and too slow. After Treasury officials echoed those complaints, in mid-February six large lenders expanded their efforts.

On Capitol Hill, the industry has embraced measures that essentially lean on taxpayers for help. Congress last December approved tax relief for some distressed home-sellers. The new stimulus package attempts to ease the credit crunch by having Uncle Sam potentially take on more financial risk: It expands government mortgage-guarantee programs as well as those from government-sponsored Fannie Mae and Freddie Mac. Lawmakers are also exploring a government-subsidized effort to buy and resell distressed properties.

Most industry groups are fighting hard, however, against a measure, which consumer groups favor, that would let judges cut the mortgage debt of borrowers in bankruptcy. Many trade groups are also trying to soften the impact on their members from a subprime lending reform measure before Congress, and to have the measure pre-empt tougher state laws.

Blaming trade groups for the mortgage mess is like "blaming the tiger for eating the zebra," said Damon Silvers, associate general counsel at the AFL-CIO. The fault, he said, lies with lax regulators. Still, Silvers argued, the groups could push bolder industry action, just as they brokered a broad foreclosure moratorium after Hurricane Katrina. "It's a collective action problem," Silvers said. "There's always somebody that feels it's their divine right to foreclose."

Consultant Glaser says the industry has a leadership vacuum. "So far, the trades are not for anything; only against everything," he said. "There's little talk about how to right the industry." With that approach, he warned, "the odds of government intervention go way up."