Paul Sakuma, Associated Press - Ap
Wells Fargo increases lobbying presence in statehouses
- Article by: ANDREW DUNN
- Charlotte Observer
- October 14, 2012 - 4:05 PM
CHARLOTTE, N.C. - Wells Fargo & Co. has built up a significant lobbying presence in state capitals to manage the torrent of mortgage-related bills flooding legislatures.
Five years ago, the San Francisco bank reported a limited state lobbying presence focused on the West Coast and Iowa, where its mortgage operations are headquartered. After becoming a nationwide bank, Wells Fargo now has lobbyists bending state legislators' ears everywhere from Denver to Baton Rouge, La.
It has built its East Coast lobbying presence beyond that of Wachovia, the Charlotte bank Wells Fargo acquired in 2008. The bank also has spent more money on lobbying in states including California and Minnesota, courted city mayors and sought more government business.
The bank registered more than 150 lobbyists in 31 state capitals in 2012, according to a Charlotte Observer review of state lobbyist registration rolls. That's an increase from the 47 in 10 states it had five years ago (or 60 in 14 states, if you add in Wachovia's lobbyists).
Wells Fargo says the increase is largely tied to evolving rules on who must register as a lobbyist. About half of U.S. states require people who seek government contracts to put their names down.
The bank also says that while it may have more contracted lobbyists registered under its name, Wells Fargo's in-house government relations team hasn't grown.
But in at least 11 states, Wells Fargo has registered lobbyists to influence legislation where neither it nor Wachovia had voices five years ago, the Observer's analysis found. Wells Fargo has long had a major presence in Minnesota, where it is the largest bank by deposits and employs about 20,000 people. About 8,500 of those workers are in the bank's mortgage unit, based in Des Moines, Iowa.
The national growth is yet another example of the pre-eminent position the bank has taken in the financial industry, particularly in mortgage lending and servicing, as rivals have pulled back. Charlotte-based Bank of America has pared its state lobbyist registrations by about a quarter, to 136, the Observer's data show.
At the federal level, Wells Fargo is again the top commercial bank lobbying spender, with $3.8 million spent in the first half of the year, according to data from the Center for Responsive Politics. Last year, Wells Fargo led the industry to a record-high level of lobbying spending.
Wells Fargo has also aimed its message at mayors. The bank has hosted four gatherings of city executives in recent months -- most recently last week in Charlotte, where the bank showed a group of mayors around its housing preservation workshop.
But since the real estate meltdown, statehouses have been a hotbed for banking bills -- especially since 49 state attorneys general reached a $25 billion settlement this year with Wells Fargo, Bank of America and three other big banks over shoddy mortgage servicing practices.
The American Bankers Association is tracking more than 200 statehouse bills on topics ranging from foreclosure rules to homeowners' rights to mortgage fraud, said Mathew Street, deputy general counsel for state relations.
California and other states have created forms of a "Homeowners Bill of Rights," while Arizona and Hawaii considered bills that would allow governments to use eminent domain powers to seize troubled mortgages.
"It's not inherently bad to increase the number" of lobbyists, said Peggy Kerns, director of the ethics center at the National Conference of State Legislatures. "If there are certain policy issues that are being taken up, that happens. The number of lobbyists ebbs and flows based on what the issues are."
Wells Fargo says the increase is driven in part by changes in laws that require some employees seeking government contracts to register as "procurement" lobbyists, also known as "executive" lobbyists. These lobbyists vie for government entities' business, like bond underwriting and investments.
"There's been an increase in procurement lobbying laws over the past few years, and Wells Fargo strives to comply with applicable laws and regulations," Wells Fargo spokesman Josh Dunn said in an e-mail.
Star Tribune staff writer Jennifer Bjorhus contributed to this report.
© 2017 Star Tribune