Bank CEOs speak to Congress with deep partisanship
WASHINGTON – CEOs of the largest banks appeared before Congress on Wednesday to discuss the usefulness of Wall Street to borrowers and businesses during the pandemic. Senators, reflecting the deep partisan divide between Democrats and Republicans, spent much of the audience wanting to talk about hot political issues such as climate change, guns and the franchise.
The hearing before the Senate Banking Committee marks the start of two days of hearings that have become an annual tradition on Capitol Hill since Democrats took control of Congress in 2019. The House will hold its hearing on Thursday.
What are the problems with hot spots?
Banks appear before Congress as the US economy recovers from the pandemic. The industry, which was responsible for the Great Recession over a decade ago, has spent most of 2020 and now 2021 trying to appear helpful and willing to work with struggling borrowers and businesses. Banks across the country have waived fees, forborne millions of mortgages to shore up the struggling finances of Americans in the pandemic.
“We are a very different bank than the one that entered the financial crisis over a decade ago,” said Jane Fraser, the new CEO of Citigroup.
Most of those measures are now disappearing, and senators have pushed CEOs to promise that they will not force anyone into foreclosure or bankruptcy due to the pandemic after the relief measures expire. Democratic senators also insisted on what banks are doing to increase diversity in their ranks and tackle systematic financial inequalities between black and Latino households and white households.
“You’ve heard from everyone on this panel that we’re trying to do more,” said Jamie Dimon, CEO of JPMorgan Chase, in response to questions about how banks are performing on lending to minorities and the poor. .
Inequality remains a major problem
Brown slammed CEOs for banks cutting lending to small businesses hit by the pandemic while buying back their own shares. Bank of America, he said, cut its small business loans by 14% while repurchasing some $ 25 billion in shares. Moynihan parried the attack by saying, “The good news is we can do both.”
Challenged by Brown over the wide gap between bank CEO pay and average employee pay, Dimon replied, “We are very proud of the opportunities we provide to all of our employees.”
Senator Elizabeth Warren, a longtime critic of big banks, has pressed banks on why they collected overdraft fees during the pandemic.
In a tense exchange, she called Dimon “the king of overdraft fees,” saying JPMorgan charges more than seven times the fees per account than its competitors.
“I think your numbers are totally inaccurate,” Dimon told him.
“The past year has shown that corporate profits are more important to your bank” than helping people in difficulty, Warren said.
What are the Republicans talking about?
Senate Republicans have pushed back on issues such as increasing regulation and promoting programs they created last year when they controlled the Senate like the Paycheck Protection Program.
Sen. Pat Toomey of Pennsylvania, the lead Republican on the panel, said the banking sector has shown remarkable resilience during the pandemic recession. But he expressed an idea with cultural currency among conservatives, saying he was concerned about the growing pressure on banks “to embrace the revival” and promote social activism through their practices.
“Thanks to capitalism, life is better for the vast majority of Americans than it ever has been.” Said Toomey.
GOP senators also rebuffed statements from big banks regarding Republican efforts to restrict voting after the 2020 election.
Senator Tim Scott, RS.C., challenged CEOs to their public opposition to Georgia’s new Republican election law. Critics say Georgia’s drastic rewrite of electoral rules will limit access to the vote, especially for voters of color, and has become a flashpoint in the polarized political battle dividing the country.
“What part of this law was discriminatory or restricted access?” Scott asked CEOs. “It didn’t stop anyone from voting.”
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