Banks are increasing their spending on lobbying this year, The Charlotte Observer reported on Sunday. In fact, the paper reports, banks are on pace to reach a “record high.”
The top five spenders in the commercial banking industry—the American Bankers Association, Wells Fargo, JPMorgan Chase, Citigroup and the Independent Community Bankers of America—have increased their lobbying expenditures by 12% over the first three quarters of 2010, according to the paper.
Data from the Office of Public Records shows that the American Bankers Association spent more than $6.3 million on lobbying efforts in the first three quarters of 2011. Wells Fargo spent almost $5.9 million, while JPMorgan Chase spent $5.8 million.
The Observer cites data from the Center for Responsive Politics that shows the commercial banking industry had spent approximately $42 million on lobbying at this time last year. So far this year, the paper writes, the industry has spent $47 million.
“Should this year’s pace continue, 2011 will be the sixth straight year that commercial bank lobbying has set a record, according to the center,” according to the paper.
Bank of America, however, has decreased spending on lobbying this year. The bank spent $930,000 in the first quarter of 2011, and $640,000 in the second quarter and third quarter. That’s down from $2.7 million in the first three quarters of 2010. A spokeswoman for BofA told The Charlotte Observer that the drop in lobbying expenditures is partly due to the company’s Project New BAC plan, which will save the bank $5 billion a year by 2014.
Marty Mosby, an analyst with financial services firm Guggenheim Securities, told The Charlotte Observer that it was important for banks to invest in lobbying in order to head off public discontent. “You really have to go through and educate legislators,” Mosby said. “There’s just so much discussion and banter and misinformation going around, it helps for industry leaders to be involved in the process and be sure there’s some kind of tie-back to what’s really happening.”
Bartlett Naylor, financial policy advocate for consumer group Public Citizen, acknowledged that for banks investing large sums in lobbying efforts, it’s money well-spent. “That lobbying and political spending is a large figure, but it’s a small investment to protect half a billion dollars,” he told the Observer. “You would argue from a cold business standpoint that you would expect them to spend that kind of money.”
Naylor’s group is a nonprofit organization that campaigns for citizen interests. He argued that the complexity of issues in this industry give bank lobbyists “undue influence,” according to the Observer. “While the death grip of Wall Street might have relaxed enough for some reasonable legislation to pass through Congress in 2010, Main Street has to worry that that grip is retightening,” Naylor said.