JPMorgan Spent Most On Lobbying Activities Among Banks Last Year

It is a well-known fact that since the economic downturn of 2008, the banks have spent on lobbying support for politicians against stricter regulations that aim to constrain the working of the country’s biggest banks. No surprise here considering that the banks stand to lose billions in revenue once they are forced to close down some of their most lucrative businesses. For 2012, it was the country’s biggest banking group JPMorgan Chase (NYSE:JPM) which spent the most on lobbying activities – pumping a little over $8 million towards softer banking rules. ^[1] The other notable spenders in this department are Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) who have each spent at least $5 million in each of the last three years. ^[2]  Notably, these banks have shelled out more on lobbying than the largest investment banks Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) which spent an average of $4 million and $3 million, respectively, on such activities. ^[3]

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The table below has been compiled based on Senate Office of Public Records (data available on the website OpenSecrets.org) and shows the relative lobbying spends by the country’s biggest banks:

As can be expected, a majority of these expenses incurred by the banks were aimed against the Dodd-Frank Wall Street Reform and Consumer Protection Act and to ease restrictions that the act imposes in its current form as well as to delay the implementation of the act into law. ^[4] Historically, the lobbying costs of commercial banks have been notably more than that of investment banks simply because their diversified business forces them to incur lobbying expenses on a wider range of issues than those the investment banks need to worry about.

While these expenses are but a fraction of the multi-billion dollar expenses each of these banks incurs over a year, the important point here is the marked increase in lobbying activities since 2008. On average, banks have spent about 50% more on these activities each year since 2007 before the onset of the economic recession and the subsequent tightening of banking regulations. And while it can be argued that the numbers for 2012 would be higher as it was an election year, it must be noted that the total lobbying costs by all the banks put together was actually lower that year than in 2011 – the year banks began a focused effort towards blunting the impact of the Volcker Rule.

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1. JPMorgan, OpenSecrets.org [↩]
2. Wells Fargo, OpenSecrets.org [↩]
3. Goldman Sachs, OpenSecrets.org [↩]
4. JPMorgan Banking Issues Lobbied, OpenSecrets.org [↩]