U.S. bank CEOs grilled by Congress over economy, consumer protections, Russia ties


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WASHINGTON — The chief executives of JPMorgan, Bank of America, Citigroup, Wells Fargo and other major U.S. banks were grilled Wednesday by Democratic and Republican lawmakers over business, consumer protection, mortgages and their ties with Russia.

Testifying before the House Financial Services Committee, the CEOs touted their financial strength, their role in distributing billions of dollars in COVID-19 pandemic relief and their efforts to both encourage lending to poorer communities and promote diversity within their ranks.

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The hearing includes CEOs of the four largest US banks: Jamie Dimon of JPMorgan Chase & Co, Charles Scharf of Wells Fargo, Brian Moynihan of Bank of America and Jane Fraser of Citigroup. They are joined by Andy Cecere, CEO of US Bancorp, William Demchak, CEO of PNC Financial, and Bill Rogers of Truist, who run the country’s largest regional lenders.

While such hearings rarely result in legislative action, they are nonetheless risky for CEOs, who have been forced to defend their banks on multiple fronts as lawmakers seek to raise their profile ahead of November’s election, which will have Congress in control has at stake.

Republicans and Democrats alike urged CEOs to consider the impact of Federal Reserve interest rates — aimed at taming rising inflation — on the economy and banks’ customers.

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As interest rates rise, Fraser expects people with lower credit ratings to experience greater financial stress. Saving rates are likely to fall, she added.

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“We’re going to have tougher times ahead,” Fraser said.

Dimon said consumers remain in “pretty good shape” but there is a possibility of a mild recession that could be worse depending on how Russia’s war in Ukraine plays out, which has created uncertainties in global energy and food supplies.

California representative Brad Sherman also pressed Dimon and Fraser on the banks’ ties to Russia, sparking a brief, contentious exchange in which Dimon – known for his blunt and direct style – attempted to intervene while Sherman spoke.

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Democrats also pressed executives on fees, the closure of bank branches in poorer areas, and the fallout from several major mergers in recent years.

“In recent years we have seen the banking system in this country change dramatically. Our nation’s largest banks have grown even larger,” said Representative Maxine Waters, who chairs the panel. “It’s high time we got to the bottom of who is actually benefiting from these mergers.”

Executives are also facing increased criticism from Republicans, who are growing frustrated with what they see as Wall Street’s increasingly liberal stance on environmental and social issues. Some big banks have introduced policies that some Republicans say amount to a boycott of certain industries like fossil fuels and firearms. Banks dispute this characterization.

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Rep. Patrick McHenry, the Republican on the top panel, opened the hearing by chastising banks for considering such stances.

“We’re going to hear Democrats encouraging banks to make lending decisions based on ‘wake’ policy and not creditworthiness,” he said.

(Reporting by Pete Schroeder, Lananh Nguyen in Washington; additional reporting by Saeed Azhar in New York; editing by Michelle Price, Will Dunham and Nick Zieminski)

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