Salem Radio Network News Tuesday, March 5, 2024

Politics

U.S. bank CEOs expected to protest regulation push before Congress

By Pete Schroeder

WASHINGTON (Reuters) – The top bosses of JPMorgan, Bank of America, Citigroup, Wells Fargo and other major banks are expected to warn lawmakers this week that capital hikes and other new regulations will hurt the economy and should be indefinitely shelved.

Worker pay and rights, climate change, mortgages, and financial stability are also likely to feature when the CEOs of the country’s eight largest banks appear before the Senate Banking Committee on Wednesday, said executives and analysts.

The line-up: JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Citi’s Jane Fraser, Wells Fargo’s Charles Scharf, Goldman Sachs’ David Solomon, Morgan Stanley’s James Gorman, State Street’s Ronald O’Hanley, and BNY Mellon’s Robin Vince.

The hearing comes amid a fierce industry campaign to kill the “Basel Endgame” proposal, which overhauls how banks must calculate their loss-absorbing capital, and as regulators roll out fair lending and fee cap rules, among others.

It offers the CEOs an opportunity to try to convince key moderate Democratic senators that the rules could stifle lending, hurting small business and consumers.

But they will also have to persuade skeptical lawmakers, including the Committee’s Democratic chair Sherrod Brown, that the banking sector is safe and sound following the collapse of Silicon Valley Bank and two other lenders earlier this year.

“My commitment as chair of this committee is to always put the Main Street economy – and the workers who power it – at the center of everything we do,” Brown said in a statement.

“It’s our job to hold them accountable to their workers, to their customers, and to the American people.”

Spokespeople for the banks declined to provide comment ahead of the hearing or did not respond to requests for comment.

Kevin Fromer, president of the Financial Services Forum, which represents the CEOs, said he expected Basel to be a focus.

“The hearing this week gives the CEOs an opportunity to discuss the important work of their firms in supporting their customers, the economy, and financial stability,” he said.

Big bank CEOs have been appearing before Congress for several years after the 2007-09 financial crisis and subsequent scandals thrust the industry into Washington’s crosshairs.

While they rarely result in legislation, hearings have led banks to make changes. In 2021, Dimon was drawn into a fiery exchange with Democratic Senator Elizabeth Warren about overdraft fees, while last year she grilled him over fraud on bank payment network Zelle. Big banks subsequently reduced overdraft fees and expanded Zelle fraud protections.

Former Wells Fargo CEO Tim Sloan, meanwhile, resigned in March 2019 after stumbling during a hearing about the bank’s regulatory woes.

In recent years, banks have also been attacked by Republicans, who have accused them of cutting off fossil fuel companies and gun manufacturers.

But after years of playing defense, the CEOs are expected to be more assertive, this time backed by Republicans critical of red tape. Some moderate Democrats have also raised concerns that the Basel proposal could force banks to pull back from lending.

Tim Scott, the Committee’s top Republican, said he planned to focus on Basel and other “burdensome” regulatory proposals.

“I look forward to hearing directly from the businesses that will be impacted, and in turn, how these proposals will increase costs and limit access to credit for the Americans who need it most.”

(Reporting by Pete Schroeder; additional reporting by Nupur Anand, Tatiana Bautzer, Saeed Azhar and Lananh Nguyen in New York; editing by Michelle Price and Nick Zieminski)

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