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Bank CEOs to testify as U.S. Congress ramps up scrutiny of Wall Street

The U.S. Congress will hold hearings next month with the chief executives of major Wall Street banks as Democratic lawmakers step up scrutiny of the role lenders have played in helping struggling Americans recover from the COVID-19 pandemic.

The House Financial Services Committee and the Senate Banking Committee will hear testimony from JPMorgan Chase & Co(JPM.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N), Wells Fargo & Co (WFC.N), Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), according to a notice from the House of Representatives committee.

The virtual hearings scheduled for May 26 and 27 could determine how much legislative and political risk the biggest banks will face through 2022, Jaret Seiberg at Cowen Washington Research Group wrote on Thursday.

“These hearings may offer more upside than risk. A strong performance from the bank executives may discourage progressive Democrats from scheduling more hearings or from introducing adverse legislation,” he added.

While the industry’s image in Washington has improved since the financial crisis a decade ago, Democratic lawmakers have expressed skepticism that lenders are doing all they can to help Americans and small businesses hurt by the pandemic.

They are likely to grill the CEOs on the industry’s role in the small-business Paycheck Protection Program and ask them to address concerns, flagged by several congressional reports, that lenders dished out the cash to fraudsters and discriminated against some borrowers.

Industry officials also expect lawmakers to focus on how mortgage lenders are helping homeowners, and whether they are doing enough to prevent a foreclosure crisis. Other Democratic goals, including tackling racial injustice and climate change, are also expected to feature in the discussion.

After the banks posted bumper profits in this year’s first quarter and as President Joe Biden floats the idea of raising taxes on the wealthy, the millionaire chief executives are also likely to be grilled on whether Wall Street and its rich executives pay enough to the government.

Representatives for the banks declined to comment.

Source: www.reuters.com