NEW YORK (AP) – The heads of the nation’s biggest banks said Wednesday before Congress at their annual meeting that they have reason to be concerned about the health of American consumers, especially poor and low-income borrowers.
The CEOs of JPMorgan Chase & Co., Bank of America, Wells Fargo & Co., and five other large companies, also said the Biden administration’s proposed new regulations for the industry will hurt the U.S. economy heading into an election year. took advantage of the opportunity to impress upon senators that it could have a negative impact on the United States. A recession is possible.
Wall Street’s most powerful bankers have regularly appeared before Congress dating back to the 2008 financial crisis. Among those testifying before the Senate Banking Committee were JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Citigroup’s Jane Fraser and Goldman Sachs’ David Solomon. included.
When Democrats took control of both houses of Congress, CEOs appeared before both the House Financial Services Committee and the Senate Banking Committee. Republicans currently control the House of Representatives, so only the Senate will hold hearings this year.
It’s been a tough year for the banking industry, as high interest rates reduce banks and consumers from seeking loans, and consumers face economic pressure from inflation. This year, three major banks – Signature Bank, Silicon Valley Bank and First Republic Bank – collapsed after experiencing deposit runs and questions about the soundness of their balance sheets.
Additionally, regulators are proposing new rules that could take a big hit to banks’ profitability, including a new Federal Reserve rule that would require large banks to hold additional capital on their balance sheets. . The industry has been adamantly opposed to the new regulations, known as the Basel Endgame, arguing that they will have a negative impact on lending and bank balance sheets at a time when the industry needs more flexibility. There is.
“Nearly every element of the Basel III endgame proposal will make lending and other financial activities more expensive, especially for small businesses and consumers,” Fraser said in prepared remarks. Stated.
The Consumer Financial Protection Bureau has also proposed curbing overdraft fees, a long-standing source of income for consumer banks.