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.
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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: