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. HolderOvernight Tech: Senate moving to kill FCC's internet privacy rules | Bill Gates pushes for foreign aid | Verizon, AT&T pull Google ads | Q&A with IBM's VP for cyber threat intel Uber leadership sticking by CEO Top Dems prep for future while out of the spotlight MORE Tuesday, urging him to explicitly prevent any tax writeoffs under the settlement. That letter was signed by Sens. Mazie HironoMazie HironoLive coverage: Day three of Supreme Court nominee hearing Live coverage: Day two of Supreme Court nominee hearing Ten years later, House Dems reunite and look forward MORE (Hawaii), Bill NelsonBill NelsonSenators demand Pentagon action after nude photo scandal Senate votes to block internet privacy regulations Overnight Tech: Senate moving to kill FCC's internet privacy rules | Bill Gates pushes for foreign aid | Verizon, AT&T pull Google ads | Q&A with IBM's VP for cyber threat intel MORE (Fla.), Martin HeinrichMartin HeinrichSenators demand Pentagon action after nude photo scandal Dem senator wants Manafort to testify before Intelligence Committee The one Trump pick leaving greens hopeful MORE (N.M.), Sheldon WhitehouseSheldon WhitehouseLive coverage: Day three of Supreme Court nominee hearing Dems land few punches on Gorsuch Overnight Regulation: Dems punch back in fight over CEO pay rule MORE (R.I.) and Elizabeth WarrenElizabeth WarrenSenators war over Wall Street during hearing for Trump's SEC pick Senators demand Pentagon action after nude photo scandal Sanders to oppose Gorsuch's nomination MORE (Mass.).

In the House, Reps. Peter WelchPeter WelchDem lawmakers propose bill to regulate drone data collection Cummings: Trump commits to strong push for Medicare drug price negotiation Top Oversight Dem to meet with Trump about prescription drug prices MORE (D-Vt.) and Luis GutierrezLuis GutierrezArmy vet slated for deportation over drug charges Congressman handcuffed by police after refusing to leave ICE office Despite tensions, Mexico engages with Trump administration 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.