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By Pete Schroeder
WASHINGTON (Reuters) – The chief executives of JPMorgan (NYSE:), Financial institution of America (NYSE:), Citigroup (NYSE:), Wells Fargo (NYSE:) and different main U.S. retail banks shall be grilled this week by lawmakers on a slew of points, from the state of the economic system to their stances on hot-button points together with abortion and fossil-fuel lending.
Funds fraud, boosting range, mergers and entry to financial institution branches, are additionally anticipated to function when the CEOs seem earlier than the Home Monetary Companies Committee and Senate Banking Committees on Wednesday and Thursday, respectively, in accordance financial institution officers, congressional aides and lobbyists.
The road-up consists of the CEOs of the 4 largest U.S. banks: JPMorgan’s Jamie Dimon, Financial institution of America’s Brian Moynihan, Citi’s Jane Fraser and Wells Fargo’s Charles Scharf. They are going to be joined by USBancorp CEO Andy Cecere, PNC Monetary (NYSE:) CEO William Demchak, and Truist Monetary (NYSE:) CEO William Rogers (NYSE:), who run the nation’s largest regional lenders.
Whereas such hearings hardly ever end in legislative motion, they’re nonetheless dangerous for CEOs, who shall be pressured to defend their banks on a variety of fronts when lawmakers need to increase their profiles forward of November elections.
Throughout an identical listening to final 12 months, Dimon was drawn right into a fiery alternate with Democratic Senator Elizabeth Warren about overdraft charges. Former Wells Fargo CEO Tim Sloan, in the meantime, resigned abruptly in March 2019 two weeks after stumbling throughout a Home committee listening to in regards to the financial institution’s progress in fixing its regulatory woes.
The listening to comes amid rising worries that Federal Reserve price hikes geared toward taming inflation might tip the nation right into a recession. In June, Jamie Dimon stated the U.S. economic system was going through a “hurricane” however couldn’t predict how unhealthy it will be.
Lawmakers are more likely to quiz the CEOs about how customers’ funds are holding up and the way the lenders plan to help People as borrowing prices rise.
“We’ll proceed to maintain the nation’s greatest banks accountable in order that People can hold extra of their hard-earned cash – at a time that they want it most,” stated Senate Banking Committee chair Senator Sherrod Brown in an announcement to Reuters.
The banks imagine they’ve a constructive story to inform about how effectively they carried out through the COVID-19 pandemic whereas serving to distribute billions of {dollars} of assist; their ongoing position within the broader economic system; and their efforts to spice up pay for rank-and-file employees, promote racial fairness within the communities they serve, and increase employees range.
That is a message the banks’ executives, lobbyists, and commerce teams have conveyed throughout a marathon of personal conferences with key lawmakers over the previous few weeks, the sources stated.
“There’s loads for our banks to level to, to reveal how a lot they’ve completed to help customers, small companies, and the economic system all through the pandemic and persevering with at this time,” stated Lindsey Johnson, CEO of the Shopper Bankers Affiliation.
‘WOKE’ PUSHBACK
Because the 2007-2009 monetary disaster, Democrats together with Brown and Home Monetary Companies Committee chair Maxine Waters (NYSE:) have taken a tricky stance on the banking trade and are anticipated to maintain up the stress on the hearings.
In personal letters, the committees have requested the CEOs to supply particulars on their capital ranges, financial institution department areas, worker wages, govt pay, efforts to scale back carbon emissions, inventory buybacks, truthful lending, and abortion protection, amongst different objects, based on a copies seen by Reuters.
However financial institution executives are additionally cautious of rising criticism from Republicans, historically allies who’ve pushed again towards heavy regulation, over what they see as Wall Road’s more and more liberal leanings on surroundings and social points.
Republicans on the state and federal stage are cracking down on banks for “boycotting” industries corresponding to vitality and weapons, a characterization banks dispute. Conservatives have additionally slammed lenders for “woke” stances on different points corresponding to protecting journey prices for workers’ out-of-state abortions.
“People deserve to listen to how these banks will help their clients via troubling financial headwinds … as an alternative of far-left speaking factors,” Patrick McHenry, the highest Republican on the Home panel, stated in an announcement to Reuters.
Whereas executives confronted some important questions from Republicans on such points final 12 months, the stress shall be better this time, stated analysts.
“The large banks actually have fewer buddies than they used to, there is not any doubt about it,” stated Brian Gardner, chief Washington coverage strategist at Stifel Monetary (NYSE:) Corp.