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USBank would benefit from the passage of I-1053, but Washington would lose

USBank, headquarted in Minneapolis, Minnesota, is the fifth largest bank in America by assets, and the sixth largest by deposits. It has a presence in twenty four states, mostly western and midwestern states, though it has a heavy presence in several Eastern states. It is owned by a similarly named holding company, U.S. Bancorp.

Like most other big banks, U.S. Bancorp/USBank is descended from a number of smaller banks, including one that began in the Pacific Northwest (United States National Bank of Portland). That institution was acquired by First Bank System of Minneapolis in 1997; following the deal, First Bank changed its name to U.S. Bancorp. Four years later, U.S. Bancorp was bought out by Firstar Corporation, which had previously merged with Star Bank of Cincinnati and absorbed the Mercantile Bancorporation of St. Louis in 1999. The combined company dropped the Firstar name and became U.S. Bancorp; it also retained its headquarters in Minneapolis.

USBank is a major beneficiary of TARP, the Troubled Assets Relief Program, more commonly known as the “bank bailout”. By the time President Barack Obama was inaugurated in late January 2009, USBank had already taken nearly $6 billion in TARP money, in the form of a preferred stock and related warrants.

Assets in Washington State

USBank’s major assets in Washington include:

  • An estimated one hundred and seventy branches
  • Corporate offices in the following buildings:
    • US Bank Centre, located at 1420 Fifth Avenue, Seattle, WA 98101
    • US Bank Building, located at 422 West Riverside Avenue, Spokane, WA, 99201


Since 1990, U.S. Bancorp’s main political action committee has spent more than $3 million on federal campaigns. The top recipients of its money for the current cycle are House Minority Leader John Boehner and House Republican Whip Roy Blunt of Missouri, a candidate for Senate. Each of them received $10,000.

Last year, U.S. Bancorp spent $170,000 lobbying Congress at the federal level. It has spent $689,514 so far this year.

U.S. Bancorp does not currently employ a registered lobbyist in Washington State. It was previously represented in Olympia at the end of the last decade by Greg R. Hanon, who now lobbies for Costco Wholesale.

What USBank Wants

USBank, like other large financial institutions, is anxious to prevent the Legislature from ending a tax loophole that primarily benefits out of state banks. During the most recent legislative session, the House passed a budget closing this exemption. Although many senators wanted the Senate’s budget proposal to do likewise, the language was kept out at the insistence of Senator Jean Berkey, who heads the Banking Committee.

Senator Adam Kline explains:

I’m receiving a lot of e-mail supporting the closure of the tax exemption that is currently granted to banks on the interest earned on first mortgage investments. This deduction, which has been in place since the early 1980’s, means that banks don’t currently pay Business and Occupations (B&O) taxes on the interest or investment earnings made from the interest from residential first mortgages.

The Supplemental Operating Budget proposed by the House of Representatives proposes to cap this deduction at $100 million, so that each bank would be taxed only on the excess over that amount – i.e., if the bank earns $150 million in interest, it would pay tax on the additional $50 million. It is estimated that the cap on the deduction would garner around $59 million.

The Legislature ultimately did not close the exemption; as mentioned earlier, this was partly due to Jean Berkey’s interference. However, Washington will face another big budget deficit next year, and this exemption will be one of the first things on the chopping block… unless Initiative 1053 passes. If I-1053 passes, Republicans will assert that closing tax exemptions is tantamount to raising taxes, and impossible to do under I-1053 without their permission. USBank is essentially buying itself special protection to avoid having its special tax break rescinded. See, USBank would rather have that money for itself, rather than chipping in like a good “corporate citizen” to save public services from being eviscerated.

In summary, profit is more important to USBank than the fiscal health of Washington State (go figure). That’s why USBank supports Tim Eyman’s Initiative 1053.

Corporate Profile

  • Company Type: Public Company traded on NYSE (USB)
  • Contribution Addresses:
  • 4000 West Broadway, Robbinsdale, MN 55422; 425
  • West Riverside Ave Suite 1200, Spokane, WA 99201
  • Chief Executive: Richard K. Davis
  • 2010 1st Quarter Revenue: $2.9 billion
  • 2010 1st Quarter Net Profit: $669 million

Contribution History for 2010 Cycle

From Public Disclosure Commission records…
Amount Date Initiative/Sponsor Committee Given To
$2,500 07/21/2010 1053 (Tim Eyman) Citizens for Responsible Spending
$5,000 07/07/2010 1053 (Tim Eyman) Citizens for Responsible Spending

Total amount shelled out by USBank for electioneering: $7,500