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Bank CEOs return to testify in front of divided Congress

🕐 3 min read

By KEN SWEET, AP News.

KEN SWEET AP Business Writer

WASHINGTON (AP) — The chief executives of the nation’s largest banks are back in front of Congress, where they faced another round of questioning reflecting the deep partisan divide between Democrats and Republicans.

The House hearing Thursday comes after senators on Wednesday questioned the six CEOs on topics ranging from climate change, voting rights to racial inequities.

It is the second hearing Rep. Maxine Waters, D-California and chairwoman of the House Financial Services Committee, has held since Democrats took control of the House in 2019. In the earlier hearing, many of the same CEOs were questioned about their commitments to diversity and about the fees they charge customers.

The CEOs are appearing as the U.S. economy is recovering from the recession triggered by the coronavirus pandemic. Big banks’ profits surged in the first three months of this year as the recovery has taken hold. They were able to release billions of dollars from their reserves originally set aside in the early days of the pandemic last year for potential losses on their loans.

The banking industry, which was blamed for the Great Recession more than a decade ago, has spent most of 2020 and this year stressing its efforts to work with borrowers and businesses. Banks across the country waived fees and put millions of mortgages into forbearance to shore up Americans’ distressed finances in the pandemic.

Waters focused most of her questioning on these issues, particularly the potential tide of foreclosures this summer once government aid programs come to an end. There are still roughly 2 million homes in some sort of forbearance, which is down significantly from the height of the pandemic but still involves millions of struggling families.

“I want commitments from all of you that these people are not going to lose their homes,” Waters said.

In response, the bank CEOs who have mortgage businesses — Bank of America, Wells Fargo, Citigroup and JPMorgan Chase — all said they planned to continue offering flexibility to borrowers even past the expiration date.

Republicans on the committee,, meanwhile, focused on issues such as banks choosing not to provide financing to coal companies, gun manufacturers 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 actively working against it,” said Rep. Blaine Luetkemeyer, R-Missouri, a high ranking Republican on the committee.

Luetkemeyer also noted many of the banks in front of the committee actively seek to do business in China, which has been accused of numerous human rights violations.

The chief executives of JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley and Goldman Sachs appear via video for the hearing, as they did for the Senate hearing. One 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 firm.

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