Wed, 28 Sep 2022

Congressional hearing questions US bank officials

Robert Besser
23 Sep 2022, 05:36 GMT+10

WASHINGTON D.C.: The chief executives of JP Morgan, Bank of America, Citigroup, Wells Fargo and other major U.S. retail banks were questioned this week by House Financial Services Committee and Senate Banking Committee lawmakers.

The questions covered the wider economy, as well as the banker's individual stances on abortion and fossil-fuel loans, payment fraud, diversity, mergers and access to bank branches.

The CEOs included those of the four largest American banks, including JPMorgan's Jamie Dimon, Bank of America's Brian Moynihan, Citi's Jane Fraser and Wells Fargo's Charles Scharf.

Such hearings rarely result in legislative action, but can be risky for CEOs forced to defend their banks, as lawmakers will aim to expand their profiles ahead of November elections.

The hearing comes amidst concerns that the Federal Reserve will increase interest rates to curb inflation, which could tip the country into a recession.

JPMorgan's Dimon said in June that the U.S. economy was facing a "hurricane," but could not predict how it might impact the economy. The CEOs are likely to be grilled on how consumers' finances are holding up and how lenders can assist Americans amidst rising
borrowing costs.

In a statement to Reuters, Senate Banking Committee chair Senator Sherrod Brown said, "We will continue to hold the nation's biggest banks accountable so that Americans can keep more of their hard-earned money at a time that they need it most."

The banks sought to highlight how well they performed during the COVID-19 pandemic and helped distribute billions of dollars of aid, as well as promote racial equity and increase staff diversity.

"There is a lot for our banks to point to, to demonstrate how much they have done to support consumers, small businesses, and the economy throughout the pandemic and continuing today," said Lindsey Johnson of the Consumer Bankers Association, as reported by Reuters.

Since the 2007-2009 financial crisis, Democrats have taken a tough stance on the banking industry and are expected to keep up the pressure at the hearings.

But bank executives are also wary of growing criticism from their traditional Republican allies over Wall Street's increasingly liberal stances on environmental and social issues.

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