CEOs of major US banks will be questioned by Congress on social and consumer issues.

Topics discussed during the CEOs’ appearance before the House Financial Services Commission and U.S. Banking Commission in the Senate on Wednesday and Thursday, respectively, should also include payment fraud, promoting diversity, mergers and access to US bank branches. to bank officials, congressional aides, and lobbyists.

The list includes CEOs of the four largest US banks: JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Citi’s Jane Fraser, and Wells Fargo’s Charles Scharf. They will be joined by Andy Cecere, CEO of USBancorp, William Demchak, CEO of PNC Financial, and William Rogers, CEO of Truist Financial, who manage the country’s largest regional creditors.

While such hearings rarely result in legislative action, they remain risky for CEOs, who will be forced to defend their banks on several fronts as lawmakers try to strengthen their profile ahead of the November elections.

In a similar hearing last year, Dimon was involved in a heated argument with Democratic Senator Elizabeth Warren over overdraft allegations. Former Wells Fargo CEO Tim Sloan, meanwhile, resigned abruptly in March 2019, two weeks after stumbling during a House of Representatives committee hearing on the bank’s progress in solving its regulatory issues.

The hearing comes amid growing concerns that Federal Reserve rate hikes aimed at taming inflation could plunge the country into a recession. In June, Jamie Dimon said the US economy was facing a “hurricane”, but he couldn’t predict the extent of it.

Lawmakers are likely to question CEOs about how they are holding up consumer finances and how lenders intend to help Americans with rising borrowing costs.

“We will continue to take account of the nation’s largest banks so that Americans can keep more of their hard-earned money when they need it most,” said the chairman of the Senate Banking Committee. Senator Sherrod Brown, in a statement to Reuters.

Banks believe they have a positive story to tell about how they fared during the COVID-19 pandemic as they help distribute billions of dollars in aid; their current role in the economy in general; and their efforts to raise wages for basic workers, promote racial equity in the communities they serve, and strengthen workforce diversity.

It’s a message bank executives, lobbyists and business groups have been broadcasting in a marathon of private meetings with key lawmakers in recent weeks, the sources say.

“Our banks have a lot to show, to demonstrate everything they have done to support consumers, small businesses and the economy during the pandemic and even today,” said Lindsey Johnson, CEO of the Consumer Bankers Association.

“ALARM” BUTTON.

Since the financial crisis of 2007-2009, Democrats, including Mrs Brown and House Financial Services Commission chair Maxine Waters, have taken a tough stance on the banking sector and should keep up the pressure during hearings.

In private letters, the committees asked CEOs to provide details on their capital levels, bank branch locations, employee salaries, executive compensation, efforts to reduce carbon emissions, corporate acquisitions, etc. Stocks, fair loans and abortion coverage, among other things, according to copies seen by Reuters.

But bank executives are also wary of growing criticism from Republicans, traditionally allies who have opposed heavy regulation, of what they see as the Wall Exchange’s increasingly liberal tendencies on environmental and social issues.

Republicans at the state and federal levels are attacking banks for the “boycott” of industries such as energy and firearms, a characterization disputed by the banks. Conservatives have also criticized creditors for their “wok” positions on other issues such as covering employee travel costs for out-of-state abortions.

“Americans deserve to hear how these banks will support their customers in the face of troubling economic headwinds … instead of listening to far-left talking points,” said Patrick McHenry, the House’s chief Republican, in a Reuters statement. .

While leaders faced critical questions from Republicans on these issues last year, the pressure will be greater this time around, analysts said.

“Big banks really have fewer friends than before, there’s no question about that,” said Brian Gardner, Washington’s chief policy strategist at Stifel Financial Corp.

Leave a Comment