Wall Street bank CEOs to tout COVID relief push,
diversity efforts before Congress
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[May 25, 2021] By
Michelle Price and Pete Schroeder
WASHINGTON (Reuters) - Wall Street bank
chiefs will tout the role their institutions have played in getting the
pandemic-hit U.S. economy back on track when they appear before Congress
this week, but they are likely to face tough questions on hot-button
social and economic issues.
The Senate Banking and House of Representatives Financial Services
committees will hear from the chief executives of JPMorgan Chase & Co,
Bank of America Corp, Citigroup Inc, Wells Fargo & Co, Goldman Sachs
Group and Morgan Stanley on Wednesday and Thursday, respectively.
Wednesday's hearing is the first time the CEOs of the nation's largest
banks have testified before the Senate Banking Committee since the
aftermath of the 2008 financial crisis. Democratic gains in the 2020
election handed control of that panel to Senator Sherrod Brown, a fierce
Wall Street critic.
While the hearings are unlikely to result in policy proposals, they are
politically risky for the CEOs as scrutiny of their industry grows in
Washington under Democratic leadership.
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They are likely to be grilled on a raft of issues including economic
inequality, fair lending, diversity, racial justice, climate change,
cryptocurrencies and tax policies.
"We expect these hearings to be disjointed and nebulous, but they will
be must-watch television, nonetheless," Isaac Boltansky, a director at
Compass Point Research & Trading, wrote in a note.
The banking industry's image has improved in Washington since the
financial crisis a decade ago and big banks believe they have a good
story to tell after getting $69 billion of COVID-19 aid into the hands
of 850,000 struggling small businesses.
"The nation's largest banks have shown that in the face of a real-life
stress test, they could provide essential support to small businesses,
households, and large employers, while at the same time remaining safe
and strong," said Kevin Fromer, CEO of the Financial Services Forum,
which represents the largest eight U.S. banks and their CEOs.
INDUSTRY WATERSHED
The CEOs are also likely to extol their banks' efforts to promote
diversity and inclusion both externally and internally. In that regard,
Wednesday will mark a watershed for the industry with Citigroup's Jane
Fraser, the first female CEO of a Wall Street bank, making her Capitol
Hill debut.
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![](../images/052521PIX/busine35.jpg)
James P. Gorman, chairman & CEO of Morgan Stanley, testifies before
a House Financial Services Committee hearing on "Holding Megabanks
Accountable: A Review of Global Systemically Important Banks 10
Years After the Financial Crisis" on Capitol Hill in Washington,
U.S., April 10, 2019. REUTERS/Aaron P. Bernstein/File Photo
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She will appear alongside JPMorgan's Jamie Dimon, Morgan Stanley's James Gorman,
Well Fargo's Charles Scharf, Bank of America's Brian Moynihan and Goldman Sachs'
David Solomon.
"Diversity, equity, inclusion – these banks have a great story to tell on these
issues," said Richard Hunt, chief executive of the Consumer Bankers Association.
"They have many initiatives to continue to identify and promote people of color
and people from diverse backgrounds and this is an opportunity to tell lawmakers
about those programs."
Still, the executives are likely to get heat from some lawmakers, particularly
progressives who want them to do more to tackle wealth inequality, racial
injustice and climate change.
The legislators are also likely to seek answers from the CEOs on evidence
flagged by congressional reports that lenders discriminated against some
borrowers when distributing pandemic aid, and whether Wall Street's wealthy pay
enough taxes.
Republicans, on the other hand, are angry at what they see as Wall Street's
liberal leanings and will likely criticize the CEOs for trying to drive social
policies by curtailing credit for sectors such as gunmakers, private prisons and
oil and gas.
"Banks influencing elements of social policy...presents a perilous political
dynamic as attempts to placate the left will undoubtedly frustrate their
historic allies on the right," wrote Boltansky.
(Reporting by Michelle Price and Pete Schroeder; Editing by Peter Cooney)
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