According to a study done by Reuters of data provided by the Center for Responsive Politics (CRP) and over a half-dozen industry leaders and lobbyists, it has been found that financial institutions in the United States are providing far less money to federal candidates during this election cycle. At the same time, the share of their donations that are going to Democratic candidates has increased.
According to an analysis conducted by Reuters, with less than a month to go until the midterm elections that will decide control of Congress, commercial banks' political action committees (PACs) have given approximately $7.4 million to federal candidates. This figure represents a decrease of 43% when compared to the 2020 election cycle and a decrease of 39% when compared to the average election spend over the previous decade.
After the financial crisis that occurred between 2007 and 2009, when Democrats began cracking down on financial institutions, lenders have traditionally sought to Republicans who are sympathetic toward business for help in Congress.
Despite the fact that they are receiving less money overall, Democrats have boosted their piece of the pie to 40% in this election cycle, which is their largest proportion since the cycle of 2010. Also, compared to 6 in 2020, three in 2018, and one ahead of the 2016 election, ten of the top-20 congressional recipients of bank PAC money this cycle are Democrats. This is a change from the previous three cycles. The data used by CRP come from information that was made public by the Federal Election Commission as of September 22.
The change in donation patterns demonstrates how financial institutions are reevaluating their loyalties in light of the heightened political partisanship. The attack on the United States Capitol that took place on January 6, 2021, in which followers of Republican former President Donald Trump used force to stop Congress from recognizing Democratic President Joe Biden's election win, was a significant turning point in the conflict. After a few hours, 147 Republicans voted to invalidate Biden's victory, which Trump had falsely asserted was tainted by fraud during the election.
It also shows that the sector is attempting to attract more Democrats in light of the fact that Republicans are growing furious with lenders for their support of what Republicans consider to be liberal issues.
According to James Ballentine, CEO of government relations firm Ballentine Strategies and, until April, a prominent lobbyist for the American Bankers Association, which controls the largest business PAC, the vote on the election really prompted people to open their eyes a little bit more, he said.
According to Ballentine and the other sources, the party that is currently in power often experiences an increase in donations, and banks are also expanding their bets in anticipation of the race being more competitive.
According to poll-tracking website FiveThirtyEight.com, the Republicans have a 70% probability of winning control of the House of Representatives, whilst the Democrats are the odds-on favorites to maintain control of the Senate.
According to the sources, since January 6 several lending institutions have been under to criticism from employees, who provide funding for the PACs, to restrict contributions to Republicans.
The decision made by a number of financial institutions, including JPMorgan Chase, Citigroup, Bank of America, and Morgan Stanley, to halt some or all of their political action committee (PAC) donations while they evaluated their strategies is likely one factor that contributed to the general decrease in spending.
For the first time in more than a decade, Bank of America and Morgan Stanley have each made more contributions to the Democratic Party than they have to the Republican Party so far during this election cycle. The donations made by Citigroup are, for the first time, distributed evenly. Although JPMorgan is still contributing more money to Republican candidates, the gap between their contributions is narrower than it has been in over a decade.
When asked for comment, representatives from the banks either refused to do so or did not react to the queries.
According to multiple sources, lenders are facing pressure not only from their personnel but also from their shareholders to support parliamentarians engaged on topics beyond the realm of finance. These causes include solving the racial wealth disparity and education.
Joyce Beatty, for instance, who chairs the subcommittee on diversity and inclusion for the House Financial Services panel, is the top Democratic congressional receiver of money from bank political action committees (PACs). Diversity and inclusion is an issue that banks have vocally championed.
This trend, combined with the decision made by some banks to not work with election objectors, has resulted in the financial industry having fewer Republican allies overall. This dynamic was on display when the chief executive officers of the nation's largest banks testified in front of Congress a month ago. They were criticized by several Republicans for their business practices, namely their dealings with gun manufacturers and their operations in China.
According to Brian Gardner, chief Washington policy strategist at Stifel Financial Corp., It's a tough area to find out who your allies are, as the situation now stands. I believe that the time has passed when the biggest banks could count on Republicans for some sort of defense. Those days are done, the speaker said.
Despite this, financial institutions continue to court Republicans. Republicans make up nine of the top ten receivers of donations from the sector. One of these recipients, Representative Patrick McHenry, is in line to chair the House finance panel in the event that Republicans reclaim control of that chamber.
The spokespersons for Beatty and McHenry did not reply to requests for comment when they were given the opportunity to do so.
Camden Fine, a former chairman of trade group the Independent Community Bankers of America and current political strategist, stated that banks that are active givers to political campaigns are diversifying their risks.
The preceding is a summary of an article that originally appeared on Newsmax.