The CEOs of major US banks will be questioned by Congress on social and consumer issues
WASHINGTON, Sept 19 (Reuters) – The CEOs of JPMorgan, Bank of America, Citigroup, Wells Fargo and other major U.S. retail banks will be arraigned this week by lawmakers on a host of issues, from the state of economy to their positions on burning issues including abortion and fossil fuel lending.
Payments fraud, promoting diversity, mergers and access to bank branches are also expected to feature when CEOs appear before the House Financial Services Committee and Senate Banking Committees on Wednesday and Thursday, respectively, according to reports. banking officials, congressional aides and lobbyists.
The list includes the CEOs of the four largest US banks: Jamie Dimon of JPMorgan, Brian Moynihan of Bank of America, Jane Fraser of Citi and Charles Scharf of Wells Fargo. They will be joined by USBancorp (USB.N) CEO Andy Cecere, PNC Financial (PNC.N) CEO William Demchak and Truist Financial CEO William Rogers who run the country’s largest regional lenders.
While such hearings rarely result in legislative action, they are still risky for CEOs, who will be forced to defend their banks on multiple fronts as lawmakers seek to boost their profile ahead of the November election.
At a similar hearing last year, Dimon was embroiled in a heated argument with Democratic Senator Elizabeth Warren over overdraft charges. Former Wells Fargo CEO Tim Sloan meanwhile resigned abruptly in March 2019 two weeks after he stumbled during a House committee hearing on the bank’s progress in resolving its regulatory issues. . Read more
The hearing comes amid growing concerns that the Federal Reserve’s rate hikes aimed at controlling inflation could tip the country into a recession. In June, Jamie Dimon said the US economy was facing a “hurricane”, but could not predict how bad it would be.
Lawmakers are likely to ask CEOs about the health of consumers’ finances and how lenders plan to help Americans as borrowing costs rise.
“We will continue to hold the nation’s largest banks accountable so that Americans can keep more of their hard-earned money – at a time when they need it most,” the Senate Committee on Public Health chairman said. banks, Senator Sherrod Brown, in a statement to Reuters.
Banks believe they have a positive story to tell about their performance during the COVID-19 pandemic while helping distribute billions of dollars in aid; their continued role in the broader economy; and their efforts to raise wages for rank-and-file workers, promote racial equity in the communities they serve, and strengthen workforce diversity.
It’s a message that the banks’ executives, lobbyists and trade groups have been delivering in a marathon of private meetings with key lawmakers over the past few weeks, the sources said.
“Our banks have a lot to celebrate, to demonstrate all they have done to support consumers, small businesses and the economy through the pandemic and continuing today,” said Lindsey Johnson, CEO of the Consumer Bankers Association.
Since the 2007-09 financial crisis, Democrats, including Brown and House Financial Services Committee Chair Maxine Waters, have taken a tough stance on the banking industry and are expected to keep the pressure on in the hearings.
In private letters, the committees have asked CEOs to provide details on their capital levels, location of bank branches, employee salaries, executive compensation, efforts to reduce carbon emissions, buyouts equities, fair lending and abortion coverage, among others, according to a copy seen by Reuters.
But bank executives are also wary of growing criticism from Republicans, traditionally allies who have pushed back against heavy-handed regulation, over what they see as Wall Street’s increasingly liberal tendencies on environmental and social issues.
Republicans at the state and federal levels are cracking down on banks to “boycott” industries such as energy and firearms, a characterization dispute about banks. Conservatives have also criticized lenders for “woke” stances on other issues such as covering travel costs for out-of-state employee abortions. Read more
“Americans deserve to hear how these banks will support their customers through troubling economic headwinds … instead of far-left talking points,” Patrick McHenry, the House panel’s lead Republican, said in a statement. at Reuters.
While leaders faced critical questions from Republicans on these issues last year, the pressure will be greater this time around, analysts said.
“The big banks really have fewer friends than they used to, there’s no doubt about that,” said Brian Gardner, chief Washington policy strategist at Stifel Financial Corp.
Reporting by Pete Schroeder; edited by Michelle Price and Nick Zieminski
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