Left pushes to trim JPMorgan tax breaks on settlement

Liberal advocacy groups are mounting pressure on the Justice Department to bar JPMorgan from deducting from the bank’s taxes any portion of a broad government settlement in the works.

The reportedly $13 billion settlement over the bank’s mortgage activities before the financial crisis, which is still being hammered out, would be the largest such settlement in U.S. history. But reports that JPMorgan is seeking use up to $4 billion of the settlement as a tax write-off has led to protests from liberal groups and lawmakers.

On Monday, two groups delivered over 160,000 petitions to the Justice Department calling for barring any potential tax benefit. The groups, U.S. PIRG and Americans for Tax Fairness, argue it is patently unfair for taxpayers to help subsidize JPMorgan’s fines through the tax code.

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“The American people were already victimized once by Wall Street’s malfeasance. They should not be victimized again by having to pick up more of the tab,” said Frank Clemente, campaign manager for Americans for Tax Fairness. “The Obama administration should be helping homeowners with underwater mortgages, not be giving tax breaks to the banks that put them there.”

 The potential tax perk has also attracted attention on Capitol Hill. Five U.S. senators wrote to Attorney General Eric HolderEric H. HolderDOJ warrant of Trump resistance site triggers alarm Venture capital firm sues ex-Uber CEO for fraud Justice Dept. to meet with journalism group on subpoena guidelines MORE Tuesday, urging him to explicitly prevent any tax writeoffs under the settlement. That letter was signed by Sens. Mazie HironoMazie HironoWeakened patent system causes U.S. to slip as a global leader of IP protection If our innovators have no reward, how will America compete? Three Dem senators call for 'immediate review' of Kushner's security clearance MORE (Hawaii), Bill NelsonClarence (Bill) William NelsonThe five kinds of Republicans who could primary Trump Overnight Tech: Senate confirms two FCC commissioners | Dems want more time on net neutrality | Tech groups push White House on 'startup visa' Senate confirms two new FCC commissioners MORE (Fla.), Martin HeinrichMartin HeinrichWhat veterans have to lose in Trump’s national monument review Senators fight proposed tariffs on solar panels Economy adds impressive 209K jobs in July MORE (N.M.), Sheldon WhitehouseSheldon WhitehouseAmerican horses deserve safety, and the SAFE Act Lawmakers target horse meat trade Dems introduce legislation to protect manned aircraft from drones MORE (R.I.) and Elizabeth WarrenElizabeth WarrenWarren: Education Dept lawyer may have violated conflict-of-interest laws Congress should think twice on the Israel Anti-Boycott Act Sanders plans to introduce single-payer bill in September MORE (Mass.).

In the House, Reps. Peter WelchPeter WelchDemocrats see ObamaCare leverage in spending fights Group pushes FDA to act on soy milk labeling petition Dems pivot to offering ObamaCare improvements MORE (D-Vt.) and Luis GutierrezLuis GutierrezRep. Gutiérrez arrested at White House immigration protest Supporting 'Dreamers' is our civic and moral duty Momentum builds for bill to help 'Dreamers' MORE (D-Ill.) introducing legislation barring companies from using the tax code to deduct costs from government settlements, and Welch also sent a letter to the bank’s chief executive, Jamie Dimon, urging him to avoid the writeoff.

While the bulk of the settlement is still being finalized, the Federal Housing Finance Agency announced in October it had struck a $4 billion settlement with the bank, after it charged JPMorgan broke securities laws when it sold securities loaded with risky mortgages to Fannie Mae and Freddie Mac.