Wall Street bank chiefs were grilled by lawmakers over worker pay, executive compensation, climate change, wealth inequality, racial justice and the broader economy as they appeared before Congress on Wednesday during a frequently hostile hearing.
The chief executives of JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N), Wells Fargo & Co (WFC.N), Goldman Sachs Group (GS.N) and Morgan Stanley (MS.N) testified before the Senate Banking Committee for the first time since the coronavirus pandemic unleashed havoc in March 2020.
More than a decade after the 2008 financial crisis, the CEOs went into the hearing believing they had a good story to tell after dishing out $69 billion of COVID-19 aid to 850,000 struggling businesses.
But they frequently found themselves under fire from both sides of the aisle, with Democrats criticizing the banks for not doing enough to help everyday Americans, and Republicans wary of their growing support for liberal causes.
“Big banks face fire from progressives and conservatives. What satisfies one side outrages the other side,” wrote Jaret Seiberg, an analyst at Cowen Washington Research Group.
“Yet it is hard to see how any of these attacks lead to material policy changes. The bank CEOs performed well enough.”
In their opening testimonies, the CEOs were quick to highlight their pandemic relief efforts, their institutions’ resilience and initiatives’ to address diversity and inequality.
“We entered this crisis from a position of strength, and leveraged our size and scale to contribute to stability in our country and ongoing support for the ‘real economy,'” JPMorgan CEO Jamie Dimon said.
Citigroup chief Jane Fraser, the first woman to become a Wall Street bank CEO, acknowledged the pressing need to address “systemic inequities” including racial injustice and wealth inequality.
Dimon and Fraser testified alongside Morgan Stanley’s James Gorman, Well Fargo’s Charles Scharf, Bank of America’s Brian Moynihan and Goldman Sachs’ David Solomon.
While the hearings may not result in new policies, they are politically risky for the CEOs as scrutiny of their industry grows under Washington’s Democratic leadership.
Senator Sherrod Brown, a Wall Street critic who became chair of the Committee following Democratic gains in the 2020 election, took a tough line on the Wall Street bosses, saying their success navigating the pandemic was not enough.
“Under the current system, Wall Street profits no matter what happens to workers, because those profits now come at the expense of workers,” he told the CEOs in his opening remarks, going on to ask the CEOs to justify their multi-million dollar paychecks and stock buy backs.
The CEOs also got heat from progressive lawmakers over evidence that lenders discriminated against some borrowers when distributing pandemic aid and continued charging customers fees even as the lenders were enjoying federal regulatory breaks.
JPMorgan’s Dimon bore the brunt of questioning on this front, with progressive firebrand Senator Elizabeth Warren criticizing the country’s largest lender for reaping nearly $1.5 billion in overdraft fees during 2020, which she said was more than its competitors. Dimon said the bank waived overdraft fees for customers who asked.
“You and your colleagues came in today to talk about how you stepped up to help your customers during the pandemic. It’s a bunch of baloney,” Warren told Dimon in a fiery exchange that has become her trademark style.
Republicans, on the other hand, criticized Wall Street’s liberal leanings, criticizing the CEOs for trying to drive social policies by limiting financing for fossil-fuel companies and gun manufacturers and by speaking out against a new Georgia voting rights law.
“I am concerned about increasing pressure on banks to embrace ‘wokeism’ and appease the far left’s attacks on capitalism,” said Senator Patrick Toomey, the senior Republican on the panel.
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