top line
Members of the House Financial Services Committee, at a hearing on Wednesday, scrutinized CEOs of major banks on issues facing the U.S. economy, including rising interest rates and the possibility of a recession. miserable.
Members of the House committee blamed executives at major banks, including JPMorgan Chase CEO Jamie Dimon.
important facts
The event was the latest in a series of hearings that ran through March 2019 on consumer protection issues related to the country’s major banks, including Bank of America, Citi, JP Morgan Chase and Wells Fargo. focus and address emerging issues from racial inequality in banking. Labor rights and technology to abortion access.
Sen. Maxine Waters (D-California), chair of the committee, responded to Bloomberg’s report that Wells Fargo rejected half of black applicants seeking to refinance their mortgages in 2020. – Pressured Fargo CEO Charles Scharf. new york times A bank has reportedly held fake job interviews for people of color, and Scharf said the company was investigating.
Rep. Brad Sherman (D-California) spoke with JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser on whether the bank had cut ties with Russian energy companies Gazprom and Vitol. Arguing, Fraser said Citigroup was working on a plan to cut the company’s profits. “Exposure” in Russia.
The meeting comes a year after Congress hit banks hard over controversial overdraft fees found to disadvantage minorities and low-income people during the Covid-19 pandemic. . The bank claims it has “taken several initiatives”, including plans to abolish fees, but is “concerned that it will take this long.”
However, Republican committee members used the meeting to accuse Democrats of the inflation spike, and Rep. Patrick McHenry (R) said that President Joe Biden and Congressional Democrats were pushing inflation to accelerate. accusing them of “dumping jet fuel into an economic dumpster fire.” “
Dimon told the commission he projected a 90% chance of a “soft landing” to avert a recession, but uncertainties in global energy and food supplies due to Russia’s invasion of Ukraine could increase the likelihood of a recession and banks “need to be prepared,” he said. terrible. “
Things to watch out for
The Senate will hold a similar hearing on Thursday. Senate Banking Committee Chairman Sherrod Brown, Democrat, Ohio, told Reuters this week that the Senate Banking Committee should “hold more of its hard-earned money” at a time when Americans need to “hold more of their hard-earned money.” We will continue to hold the country’s largest bank accountable.” When I meet with the bank CEO on Thursday.
main background
The ‘Holding Megabanks Accountable’ hearing came after inflation continued to climb, rising 8.3% in August, after two rate hikes by the Federal Reserve. Economists now worry that a third rate hike could drive stocks down and push the economy into recession. The hearing is the latest example of House and Senate blaming big banks for a wide range of economic issues, from Covid-19 to inflation. Last year, Dimon argued with Sen. Elizabeth Warren of Massachusetts, a Democrat, during a Senate committee hearing over overdraft fees charged to customers during the Covid-19 pandemic. I struggled financially. In 2019, former Wells Fargo CEO Tim Sloan was under pressure at a House committee hearing following a scandal that included millions of Americans creating credit cards without their knowledge. After that, I suddenly resigned.
important quotes
“Our country’s largest banks have gotten even bigger during the pandemic, in part through mergers. Regulators have been putting a rubber stamp on these merger applications for a very long time.
chief critic
McHenry denounced the hearings as “theater rather than surveillance” and argued that the commission did “very little” to hold the megabanks accountable. He accused the commission of making decisions on social issues, arguing that they were based on “awakened politics” rather than on creditworthiness.
References
Big U.S. bank CEOs to be scrutinized by Congress on consumer, social issues (Reuters)
Jamie Dimon, Jane Fraser and other CEOs head to Capitol Hill for the annual grill this week (MarketWatch)
Stocks struggle as markets prepare for another ‘abnormally large’ Fed rate hike (Forbes)
