In what has become an annual ritual, the CEOs of the major US banks appeared in front of Congress on Wednesday to sell themselves as shepherds of a helpful industry at a time of financial and economic distress for many Americans.
Democrats called JPMorgan Chase, Bank of America, Wells Fargo and Citigroup to Washington to talk about pocketbook issues as households contend with the highest inflation since the early 1980s and the midterm election looms just weeks away.
“While COVID is behind us, the economic challenges we are now facing are no less daunting,” said Citigroup CEO Jane Fraser, in remarks prepared for the hearing. The hearing broke for recess just before the Federal Reserve announced a 3/4-point hike to its benchmark interest rate as the central bank tries to contain inflation.
While billed as a hearing on everyday finances, the CEOs have been peppered with political questions with Washington in the midst of an election year.
One hot button issue has been the issue of gun store sales. Earlier this month the major payment networks — Visa, Mastercard and American Express — said they would start categorizing gun store sales as a separate merchant code. It’s a decision gun control advocates have pushed for, potentially to help catch surges of gun sales ahead of a mass shooting.
Rep. Roger Williams, R-Texas, pushed the bank CEOs on whether they would follow the payment networks’ decision. In response, all six CEOs said they would not stop legal gun sales and would protect consumers’ privacy.
“We don’t want to tell Americans what to do with their money,” said Jamie Dimon, CEO of JPMorgan Chase.
The hearing took place before the House Committee on Financial Services. Goldman Sachs and Morgan Stanley, which focus on investment banking, are not testifying this time. Instead, the CEOs of three new banks have been brought in: Andy Cecere of US Bank, William Demchak of PNC Financial and Bill Rogers Jr. of Truist.
Each of them runs “super regionals” — banks that are huge in their own right, with thousands of branches and hundreds of billions in assets, but dwarfed in size by JPMorgan, BofA, Citi and Wells.
The Wall Street CEOs spoke about the current difficulties in the US and global economy. Along with Fraser, JPMorgan CEO and Chairman Jamie Dimon, gave a darker than normal outlook.
Dimon said that Americans are currently being “crushed” by inflation.
Many Americans still remember bailing out the banking industry nearly 15 years ago, so the CEOs also used the platform to sell themselves as a force for good.
“The work we do at JPMorgan Chase matters, in good times, and particularly in tough times,” Dimon said in his opening remarks. “We finance Americans’ ambitions with loans for homes, autos, and growing a small business, and provide valuable products and services to more than half of American households.”
Eager to avoid the political headache that comes with being labeled as part of “Wall Street,” the super regionals have used this hearing to sell themselves as a competitive “Main Street” alternative to the Wall Street megabanks.
“We are one-sixth the size of some banks on this panel,” PNC’s Demchak said.
A series of mergers have brought increased scrutiny for the super regionals. US Bank is currently in the process of buying MUFG Union Bank, the US consumer banking arm of the Japanese banking giant. Truist resulted from the merger of SunTrust and BB&T, and PNC bought the consumer banking franchise of Spanish bank BBVA.
“We are a responsible provider that works for American consumers and the economy as a whole,” Cecere of US Bank said in his prepared remarks.
The head of Wells Fargo typically faces tough questions from lawmakers because of the various scandals that cost the bank billions of dollars in fines and forced it to operate under the supervision of the Federal Reserve.
Wells CEO Charles Scharf said the bank has taken a number of steps to revamp its culture. But committee chair Maxine Waters, D-Calif., was doubtful, noting recent reports about the bank holding fake job interviews for women and having additional fines imposed upon it by financial regulators.
The CEOs will return to testify before the Senate Banking Committee on Thursday.