US Midterms: Banks Cut Overall Donations, Boost Democrats' Share

Facts

• According to a Reuters analysis of data compiled by the Center for Responsive Politics, commercial banks have greatly reduced financial donations to federal candidates for this election cycle, but have increased their proportion to Democrats. With less than a month until the midterms, commercial banks' political action committees (PACs) have given about $7.4M to federal candidates, 43% down from 2020 and 39% down from the average in the previous decade.
• Though there has been a drop in total funding by banks, the proportion of donations given to Democrats has risen to 40%, the highest since the 2010 election cycle.
• Of the top 20 congressional recipients of bank PAC donations this election cycle, ten were Democrats compared to six in 2020, three in 2018, and only one ahead of the 2016 elections.
• Bank of America and Morgan Stanley have donated to more Democrats than Republicans for the first time in over a decade. Meanwhile, Citigroup has split its donations evenly between parties for the first time, and JPMorgan is donating to more Republicans, but at the smallest margin, in over 10 years.
• Presumed reasons for the shift include the Jan. 6 Capitol riot, and banks hedging their bets on the midterm outcomes. The GOP has also shown a growing distrust of banks that embrace liberal causes, which has led to some banking PACs courting Democrats instead.
• Nine of the top ten recipients this cycle are still Republicans, most notably Patrick McHenry (R-N.C.) - who is likely to chair the House finance committee if the GOP takes the majority. The top slot is Democrat Joyce Beatty (D-Ohio), who chairs the House Financial Services subcommittee on diversity and inclusion.

Sources: Reuters, ibtimes, One America, and Wallstreet Watchdogs.

Narratives

• Republican narrative, as provided by Newsweek.While rich, elitist politicians and "woke" bankers prioritize the Jan. 6 committee hearings and new diversity, equity, and inclusion agendas, they've blatantly neglected the issues that working-class Americans - of all backgrounds - actually care about, like inflation and a deteriorating public education system. Democrats are no longer the party of the working class and they'll face that reality in November.
• Democratic narrative, as provided by Bloomberg Tax. The corporate world is rapidly shifting from its old form of white, conservative men toward a progressive model of social, financial, and environmental equity. Democrats are on the right side of history, so it's no surprise that banks are now choosing to support the forward-thinking party.
• Cynical narrative, as provided by Guardian. There's too much money flushed into American politics, especially during these midterms. It's dangerous when political consultants and PACs spend millions of dollars to boost their cynical Machiavellian interests - whether it's banks looking out for their industry or Democrats boosting "beatable" far-right candidates. This poisons the well Americans must drink from as a democracy.

Predictions