Bank CEOs Return to Testify Before Divided Congress
The heads of the nation’s largest banks are back before Congress, where they faced another round of questions reflecting the deep partisan divide between Democrats and Republicans.
Thursday’s House hearing comes after senators questioned the six CEOs on Wednesday on topics ranging from climate change, voting rights to racial inequalities.
This is the second hearing that Representative Maxine Waters, D-California and chair of the House Financial Services Committee, has held since Democrats took control of the House in 2019. In the previous hearing, many of the same CEOs were asked about their commitments to diversity and the fees they charge clients.
CEOs appear as the U.S. economy recovers from the recession triggered by the coronavirus pandemic. Big bank profits surged in the first three months of this year as the recovery took hold. They were able to free billions of dollars from their reserves initially set aside at the start of the pandemic last year for potential losses on their loans.
The banking industry, which was blamed for the Great Recession over a decade ago, has spent most of 2020 and this year emphasizing its efforts to work with borrowers and businesses. Banks across the country have waived the fees and have forbidden millions of mortgages to shore up the struggling finances of Americans in the pandemic.
Waters has focused most of its questions on these issues, particularly the potential wave of foreclosures this summer once government aid programs end. There are still around 2 million homes in some sort of forbearance, which is significantly lower than the height of the pandemic, but still involves millions of struggling families.
“I want all of you to make a commitment that these people don’t lose their homes,” Waters said.
In response, CEOs of banks that have mortgage companies – Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase – have all said they plan to continue providing flexibility to borrowers even after the expiration date.
Republicans on the committee, meanwhile, focused on issues such as choosing banks not to provide financing to coal companies, gun makers or other controversial industries.
“Your actions would shut down legal American businesses. I would say your actions are not working to advance the economy but are actively working against it, ”said Rep. Blaine Luetkemeyer, of R-Missouri, a senior Republican on the committee.
Luetkemeyer also noted that many banks before the committee are actively seeking to do business in China, which has been accused of numerous human rights violations.
The CEOs of JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley and Goldman Sachs appear on video for the hearing, as they did for the Senate hearing. A new face in front of Congress compared to 2019 is Jane Fraser, the new CEO of Citigroup and the first woman to run a Wall Street company.