NEW YORK — CEOs of America’s largest banks testified Wednesday before Congress that there is reason to be concerned about the purchasing power of consumers, especially lower-income consumers who rely on credit.
The heads of JPMorgan Chase, Bank of America, Wells Fargo and five other large financial institutions also took the opportunity to say that President Joe Biden’s administration’s proposed rules for the sector could hit the U.S. economy as it enters a new year. electoral and a recession remains possible.
Banking bosses have appeared regularly before Congress since the 2008 financial crisis. Among those who testified before the Senate Banking Committee were JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Citigroup’s Jane Fraser and Goldman’s David Solomon. Sachs.
When both houses of Congress were controlled by Democrats, CEOs spoke before the banking committees of both houses. Now that Republicans control the House of Representatives, the CEOs spoke only before the upper house committee.
This has been a difficult year for the banking sector, as rising interest rates have led banks and consumers to borrow less and consumers feel inflationary pressures. Three banks closed this year — Signature Bank, Silicon Valley Bank and First Republic Bank — experiencing deposit leaks and questions about their balance sheets.
Beyond that, regulators have proposed new rules that could severely hit bank profits, including Federal Reserve rules that would force large banks to show greater capitalization on their balance sheets. The industry is emphatically against the new rules, known as the Basel Endgame, saying they will hurt bank balance sheets at a time when institutions need more flexibility.
“Almost all elements of the Basel III Endgame would make lending and other banking more expensive, especially for small businesses and consumers,” Fraser stated in written statements.
There are also proposals from the Consumer Financial Protection Bureau that would limit fees charged for overdrafts, which until now have been a major source of revenue for banks.
Source: AP
