Skip to main content

JP Morgan Chase CEO Jamie Dimon and others are sworn in before they testify before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill in Washington, DC on April 10, 2019.

MANDEL NGAN/AFP/Getty Images

Chief executives of some of the largest U.S. banks appeared before the House Financial Services committee for the first time since the financial crisis on Wednesday armed with the healthy balance sheets, but lawmakers grilled executives more on social issues than business fundamentals.

CEOs from JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp. and Bank of New York Mellon Corp. walked into the hearing room ready to argue Wall Street has reformed the practices that fuelled the 2007-09 financial crisis and stress the contribution banks make to the broader economy.

But the tone, questions and players were distinctly different from a decade ago, when lawmakers focused on the banks’ ability to safeguard the financial system and avoid future bailouts. Among the CEOs on the panel, only JPMorgan’s Jamie Dimon was at the helm of his bank before the financial crisis.

Story continues below advertisement

The hearing was led by Democratic Representative Maxine Waters and staffed with some high-profile freshman representatives including Alexandria Ocasio-Cortez.

The heads of America's biggest banks were back on Capitol Hill for the first time in 10 years to face a grilling from lawmakers on the progress made since the 2007-2009 financial crisis. Reuters

Democratic lawmakers focused many of their questions on who the banks were doing business with, probing for answers about the financing of gun manufacturers and fossil fuel companies.

Efforts to curry favour in the capital in recent weeks, like raising the minimum wages or pulling back from private prisons, earned some praise from politicians on the committee, but did not prevent lawmakers from pushing banks on their role in wealth inequality and corporate diversity.

Still, bank executives got a few chances to flag hoped-for talking points such as their positive contribution to the economy when Republican lawmakers quizzed them on more systemic issues.

Democratic Representative Carolyn Maloney pressed JPMorgan’s Mr. Dimon to commit to a policy that would reduce the bank’s financing of gun makers. Citi and Bank of America last year said they would no longer provide certain banking services to gun manufacturers.

Some Republican lawmakers criticized such policies on Wednesday, with Representative Bill Posey cautioning banks against withholding financing from legal businesses and Representative Sean Duffy accusing Bank of America of denying Americans their Second Amendment rights.

Ms. Waters also questioned three of the bank CEOs whether they had found suspicious activity within their banks related to Russian accounts.

Citi CEO Michael Corbat declined to comment, citing an ongoing investigation into the matter. The Bank of America and Morgan Stanley CEOs said they had conducted internal investigations and did not find any suspicious activity.

Mr. Dimon said JPMorgan “will never lose sight of what we learned.” Still, the bank has taken steps that went a long way to preventing another crisis, he argued.

Since the crisis, the largest U.S. banks have added more than US$800-billion in capital to bolster the financial system. In the months leading up to the hearing, the banks also made a string of announcements to show how they are helping customers and communities.

Bank of America said on Tuesday it would raise its minimum hourly wage to US$20 from US$15 by 2021.

Last month, JPMorgan said it would no longer finance the private prison industry and would invest US$350-million in job training programs.

Goldman Sachs has publicly set targets for hiring women and minority groups, a move Citigroup also made late last year.

Story continues below advertisement

Wells Fargo & Co. was not present at the hearing since former CEO Tim Sloan resigned abruptly last month, two weeks after appearing before the same committee.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Discussion loading ...

Cannabis pro newsletter