GE Celebrates Its Successful Financial Regulation Lobbying Efforts

Jul. 1.10 | About: General Electric (GE)

While the financial bill awaits the final votes, there are still compromises and changes being made, but it sure looks like a Happy Fourth of July. It appears the $7.14 million GE (NYSE:GE) spent the first quarter lobbying in Washington, DC has paid off. For the record, GE spent $6.8 million in the fourth quarter of last year. Put this in perspective, GE spent $4.54M in the first quarter of 2009.

Several of the large companies such as Caterpillar (NYSE:CAT) and GE have lobbied against the financial bill and have been successful in an amendment that restricts Federal Reserve oversight to companies "predominantly engaged" in financial services. This means companies defined as having 85% of their annual revenue or consolidated assets coming from activities related to finance.

GE Capital skates under the guideline as only 83% of GE's consolidated assets at the end of the first quarter.

It should be noted that a large portion of the financing is for products that GE manufacturers or distribute, although the Monitor ranks GE Capital the largest leasing company in the world. It is also true that the GE financial unit has often accounted for half the company's profits.

In the last 18 months, GE has stated they are "shrinking" GE Capital. Executives have said that GE Capital cost the company its top-level triple-A credit rating and forced it to cut its dividend. The mortgage and real estate division was the first to experience the "shrinkage.

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