By Pete Schroeder WASHINGTON (Reuters) -JPMorgan Chase & Co Chief Executive Jamie Dimon will warn Congress of economic “storm clouds,” while Wells Fargo CEO Charles Scharf will urge patience as the bank addresses longstanding regulatory issues, according to wide-ranging prepared testimony. In testimony published by the House Financial Services Committee Tuesday, Scharf said the bank […]
Big bank CEOs to highlight economic, regulatory challenges to Congress -testimony
By Pete Schroeder
WASHINGTON (Reuters) -JPMorgan Chase & Co Chief Executive Jamie Dimon will warn Congress of economic “storm clouds,” while Wells Fargo CEO Charles Scharf will urge patience as the bank addresses longstanding regulatory issues, according to wide-ranging prepared testimony.
In testimony published by the House Financial Services Committee Tuesday, Scharf said the bank is still at risk for setbacks as it prioritizes fixing a wide-ranging number of regulatory concerns. He noted that while regulatory consent orders have remained in place for too long, it still will be “several years” before everything is addressed.
“We know what work needs to be done, and we are committed to completing it; I believe that the quality of the talent and the processes we now have in place will enable us to ultimately place these issues behind us,” his testimony states.
Dimon, who is due to testify alongside Scharf and other major U.S. bank CEOs at congressional hearings Wednesday and Thursday, will outline the competing forces buffeting the nation’s economy. Strong consumer spending and a robust job market suggest resilience, but “storm clouds” like snarled supply chains, the war in Ukraine, high inflation and the Federal Reserve’s efforts to contain it all signal tougher times ahead, he added.
He also will argue strict rules that require banks to hold more capital pose a significant economic risk and are “bad for America,” and hold back banks’ ability to lend. Global regulators imposed stringent capital requirements on banks after the 2008 financial crisis.
Their testimony comes ahead of a pair of oversight hearings for the nation’s seven largest retail banks, where CEOs are expected to be grilled on a range of questions, including the economy, consumer issues, and hot-button social issues like fossil fuels and abortion.
A memo prepared by the Financial Services Committee, which will question the CEOs first on Wednesday, noted that so-called megabanks have grown significantly larger after recent mergers. Banking giants continue to pay large fines for “unlawful behavior,” the committee said.
The hearing will seek CEO testimony on a range of issues, including consumer protection, compliance issues, diversity and “issues relating to the public interest” such as worker rights and abortion access, according to the memo.
Bank CEOs in general defended their banks’ work, particularly during the pandemic, highlighting the billions of dollars they helped shepherd through various relief efforts, like the Paycheck Protection Program.
“Truist teammates worked tirelessly to get much-needed relief funding into the hands of businesses that were working hard to avoid layoffs and keep operations running,” said Truist Financial CEO William Rogers in prepared testimony.
The CEOs testifying include the heads of the four largest U.S. banks: JPMorgan’s Dimon, Wells’ Scharf, Bank of America’s Brian Moynihan, and Citi’s Jane Fraser. They will be joined by US Bancorp CEO Andy Cecere, PNC Financial CEO William Demchak, and Truist’s Rogers, who run the country’s largest regional lenders.
(Reporting by Pete SchroederEditing by Nick Zieminski and Lananh Nguyen)