Finance

Big bank CEOS to testify before Congress in May

Greg Nash

The chief executives of the six largest U.S. banks will testify before Congress in back-to-back May hearings before the Senate Banking and House Financial Services committees, the panels announced Thursday.

The CEOS of JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs will appear for virtual hearings with the Senate Banking Committee on May 26 and the House Financial Services Committee on May 27, according to the announcement.

The leaders of those six banks, plus State Street and Bank of New York Mellon, appeared before the Financial Services panel in 2019, shortly after Democrats took control of the House and handed the committee gavel to Rep. Maxine Waters (D-Calif.).

President Biden’s election and the Democratic takeover of the Senate have since boosted the political pressure on the banking industry, with Democrats eager to reverse four years of regulatory rollbacks under former President Trump and hold banks to tougher standards on climate, diversity and fighting racism within the financial sector.

Both Waters and Senate Banking Committee Chairman Sherrod Brown (D-Ohio) are fierce Wall Street critics who have called for breaking up large banks with lengthy records of misconduct.

Brown, Waters and industry-skeptical Democrats will likely press the bankers on how their firms dealt with the broader economic damage brought on by the COVID-19 pandemic and how they helped customers facing financial peril.

The bank CEOs are also likely to face questions from Democrats about their stated efforts to improve the diversity of their leadership, reduce carbon dioxide emissions and help unwind the economic impact of racism.

Throughout the COVID-19 pandemic, major banks have pitched themselves as a source of strength for the U.S. economy, particularly by disbursing hundreds of billions of dollars in Paycheck Protection Program loans for small businesses.

Republicans are expected to echo many of those points and question why Democrats are considering rules that could restrict the ability of banks to lend as the U.S. economy recovers from its steepest collapse since the Great Depression.

Even so, GOP lawmakers have their own bones to pick with major banks.

Republicans have blasted each of the six banks for halting the financing of new oil and gas drilling projects in the Arctic and voiced fears that the industry could eventually blacklist the entire fossil fuel industry. 

The Office of the Comptroller of the Currency last year proposed a rule that would ban many banks from refusing to serve clients exclusively because of their industry, which both supporters and critics called an attempt to protect fossil fuel companies and firearms makers, which have also lost financing from banks. The rule hit a dead end after Biden’s election and the agency has not taken action to cement the rule since.

Tags Donald Trump Joe Biden Maxine Waters Sherrod Brown

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