Wells Fargo (NYSE:WFC) spent the most among all commercial banks in lobbying the government last year.  The fourth largest bank in the U.S. in terms of assets, and the largest in terms of market cap, Wells Fargo spent a whopping $7.8 million in lobbying in 2011 – a sharp 44% increase from $5.4 million spent in 2010.  Competitors JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C) complete the list of top three spenders among banks for lobbying, with expenses of $7.6 million and $5 million, respectively.  Interestingly, these commercial banks shelled out more on lobbying than the largest investment banks, Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), with many attributing these efforts toward a delay in the implementation of the Dodd-Franks Act. 
We maintain a $31 price estimate for Wells Fargo’s stock, which is about 7% above the current market price.
- What Was The Market Share Of The Largest U.S. Card Issuers In Terms Of Outstanding Balances For Q2 2016?
- How Did The Largest U.S. Banks Fare In Terms Of Meeting Core Capital Ratio Targets At The End Of Q2 2016?
- What Are The Current Price-to-Book Ratios For The Largest U.S. Banks?
- How Have Mortgage Origination Volumes For The Largest U.S. Banks Changed In The Last Five Quarters?
- How Much Of The Mortgage Origination Market Did The Five Largest U.S. Banks Capture In Q2?
- Wells Fargo Looks Undervalued Despite Lukewarm Q2 Results
Wells Fargo recently reported record earnings for the year 2011, and as such the lobbying expenses were but a small portion of its almost $50 billion non-interest expense for the year. But the sudden spike in lobbying costs could suggest that the bank thinks the impact of various legislation could be on its business model. Data shows that besides the consumer protection act (or the Dodd-Frank Act), Wells Fargo also lobbied heavily against laws that intended to reduce the interchange fees that banks can levy on debit card users.Notes: