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Large financial institution CEOs face 2nd day of questioning from lawmakers – The Washington Submit

NEW YORK — The CEOs of the nation’s largest banks confronted a second day of robust questioning from lawmakers on Thursday, as People cope with the very best inflation because the early Nineteen Eighties and a midterm election is just weeks away.

JPMorgan Chase’s Jamie Dimon, Citigroup’s Jane Fraser and different chief executives repeated the message they gave to the Home Monetary Providers Committee on Wednesday: The U.S. shopper is in comparatively fine condition however faces threats from excessive inflation and rising rates of interest.

Senators’ preliminary feedback mirrored the lingering populist anger towards Wall Road greater than a decade after the monetary disaster in addition to the looming election.

“You might be among the many strongest actors in our economic system,” mentioned Sen. Sherrod Brown, D-Ohio and the chairman of the Senate Banking Committee. “Your complete business, and its substantial security internet are supported by American taxpayers. It’s previous time for the monetary business to be pretty much as good to the American individuals because the nation has been to you.”

Whereas billed as a listening to on on a regular basis funds and business oversight, the CEOs are additionally getting a healthy dose of election-year politics. Democrats within the Home pushed the CEOs on points like racial fairness, the unionization efforts at banks, in addition to evergreen monetary subjects like overdraft charges and fraud.

“Ms. Fraser it’s good to see you since you’re about the one variety we’ve got seen on this business,” mentioned Sen. Bob Menendez, D-New Jersey.

Menendez, whereas acknowledging that banks have made progress in lowering overdraft charges for patrons, pushed the CEOs to utterly get rid of such charges. A lot of the CEOs mentioned they now usually supply no overdraft price merchandise, and anticipate to see their overdraft price earnings to proceed to say no.

One of many extra contentious discussions concerned Zelle, the non-public peer-to-peer fee community collectively owned by the banks. Zelle has come below scrutiny due to rising complaints of financial institution clients unknowingly authorizing funds to scammers by way of Zelle, and being unable to get their funds again. In distinction, fraud and scams on bank cards are usually coated by the bank card firms.

Elizabeth Warren, D-Massachusetts, pressed the banks on the difficulty of Zelle’s security. Whereas acknowledging there are methods Zelle might be improved, the CEOs tried to distinguish Zelle from different peer-to-peer fee networks. The CEOs mentioned companies comparable to Money App, Venmo or PayPal have considerably greater circumstances of fraud than Zelle.

“The difficulty is {that a} buyer authorizes a transaction and it later seems to be a rip-off, banks shouldn’t be on the hook for that,” mentioned Brian Moynihan, CEO of Financial institution of America. He additionally mentioned the scams account for a really small share of the transactions that happen by way of Zelle.

Republicans have been targeted on social points, together with banks making the choice to pay for workers’ abortion prices, gun rights and the financing of the oil and fuel business.

“I can’t assist however observe that when banks do weigh in on extremely charged social and political points, they appear to at all times come down on the liberal aspect,” mentioned Sen. Pat Toomey, R-Pennsylvania, the highest Republican on the committee.

Dimon appeared to agree with Toomey’s assertion that federal regulators have the facility to sway banks on points like local weather change or lending to grease and fuel firms.

“Talking for myself, they’re my decide, my jury and my hangman,” Dimon mentioned. “They will do no matter they need until constrained by you,” referring to Congress.

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