Bank CEOs tell Congress they will work to avoid foreclosures
Executives of the nation’s largest banks appeared before Congress for a second day on Thursday, facing issues ranging from inflation to their efforts to keep Americans at home after government aid to money holders expired. mortgage loans affected by the pandemic this summer.
The House hearing comes after senators questioned the six CEOs on Wednesday on topics including climate change, voting rights and racial inequality. Members of the House spent much of Thursday’s hearing asking detailed questions about industry policy.
It was the second hearing that Representative Maxine Waters, D-California and chair of the House Financial Services Committee, has held with CEOs of the big banks since Democrats took control of the House in 2019, when asked about their diversity commitments and the rates they charge customers.
Waters has focused most of his questions on the potential wave of foreclosures this summer once government aid programs end. There are still around 2 million homes in some sort of forbearance, which is significantly lower than the height of the pandemic, but still involves millions of struggling families.
“I want all of you to make a commitment that these people don’t lose their homes,” Waters said.
In response, CEOs of banks that have mortgage companies – Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase – have all said they plan to continue providing flexibility to borrowers even after the expiration date.
CEOs appear as the U.S. economy recovers from the recession triggered by the coronavirus pandemic. Big bank profits surged in the first three months of this year as the recovery took hold. They were able to free billions of dollars from their reserves initially set aside at the start of the pandemic last year for potential losses on their loans.
The banking industry, which was blamed for the Great Recession over a decade ago, has spent most of 2020 and this year emphasizing its efforts to work with borrowers and businesses. Banks across the country have waived the fees and have forbidden millions of mortgages to shore up the struggling finances of Americans in the pandemic.
CEOs like Jamie Dimon of JPMorgan, David Solomon of Goldman Sachs and Brian Moynihan of Bank of America all came to the hearing to share similar comments they made at Wednesday’s hearing – that the industry is here. to help get through the pandemic and that the banking system is strong. A new face in front of Congress compared to 2019 is Jane Fraser, the new CEO of Citigroup and the first woman to run a Wall Street company.
Republicans have focused much of their questions on issues related to the United States’ competitiveness with China, rising levels of public debt, as well as the issue of banks choosing not to finance coal companies. , gun manufacturers or other controversial industries.
“Your actions would shut down legal American businesses. I would say your actions are not helping to advance the economy, but are actively working against it, ”said Missouri Republican Blaine Luetkemeyer.
Solomon of Goldman Sachs said industries like coal are legacy industries, but banks will be there to help those companies switch to new technologies.
“There will be new technologies that will create new, even better paying jobs, which America has always led,” he said.
Luetkemeyer and other Republicans have also insisted that many of these big banks are actively seeking to do business in China, which has been accused of numerous human rights violations.
Several members of Congress have also asked CEOs about inflation. Billions of dollars have been spent under former President Donald Trump and President Joe Biden to combat the economic impacts of the coronavirus pandemic. The economic recovery is well underway, but the prices of products such as wood, steel and gasoline have risen sharply in recent months.
When asked if inflation was an issue, JPMorgan’s Dimon said inflation “is heating up, but we’re not boiling yet.” Solomon echoed Dimon’s comments, saying the economy isn’t overheating yet “but I’ll be careful.”
CEOs have also been asked for their thoughts on digital currencies like Bitcoin, which has skyrocketed in value over the past 18 months, but which have recently been extremely volatile. Currency was also used in criminal activities, such as the ransomware attack on an East Coast pipeline company earlier this month.
“My personal view is that it’s nothing like fiat money, it’s nothing like gold. Buyer, beware, ”Dimon said bluntly.