NEW YORK – The CEOs of the country’s biggest banks faced a second day of tough scrutiny from lawmakers on Thursday as Americans grapple with the highest inflation since the early 1980s and a midterm election is just weeks away.
JPMorgan Chase’s Jamie Dimon, Citigroup’s Jane Fraser and other chief executives reiterated the message they delivered Wednesday before the House Financial Services Committee: The US consumer is in relatively good shape but faces threats from high inflation and rising interest rates .
The senators’ initial comments reflected the ongoing populist anger at Wall Street more than a decade after the financial crisis and the upcoming election.
“They are some of the most powerful players in our economy,” said Sen. Sherrod Brown, D-Ohio and chair of the Senate Banking Committee. “Your entire industry and substantial safety net is supported by American taxpayers. It is high time the financial industry was as good to the American people as the country is to you.”
While CEOs are billed as hearing on day-to-day finance and industry oversight, they also get a hefty dose of election-year politics. House Democrats have been pushing CEOs on issues like racial equality, bank unionization efforts, and evergreen financial issues like overdraft fees and fraud.
“Ms. Fraser, it’s good to see you because you’re pretty much the only diversity we’ve seen in this industry,” said Sen. Bob Menendez, D-New Jersey.
While acknowledging that banks have made strides in reducing customer overdraft fees, Menendez urged CEOs to scrap those fees entirely. Most CEOs indicated that they now generally do not offer overdraft fee products and expect their overdraft fee revenue to continue to decline.
Republicans focused on social issues, including banks making decisions to pay for employee abortion costs, gun rights and funding the oil and gas industry.
“I can’t help but observe that when banks speak out on highly sensitive social and political issues, they always fall on the liberal side,” said Sen. Pat Toomey, R-Pennsylvania, the top Republican on the committee.
Dimon seemed to agree with Toomey’s assertion that federal regulators have the power to sway banks on issues like climate change or lending to oil and gas companies.
“Speaking for myself, you are my judge, my jury and my executioner,” Dimon said. “They can do whatever they want unless restricted by you,” referring to Congress.
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