Bank CEOs head to Washington for annual congressional testimony
The CEOs of the country's seven largest commercial banks will appear before Congress this morning. Regulatory issues like bank capital requirements are expected to come up — but topics related to consumer protection may take center stage.
Who's testifying: Out are some banks that have long been the target for criticism of Wall Street greed, like Goldman Sachs. In are some of the largest regional players — including U.S. Bank, Truist and PNC — on the frontlines of consumer banking.
- The CEOs of Citibank, JPMorgan Chase, Bank of America and Wells Fargo will also testify, completing the panel of the country's seven largest commercial banks.
Flashback: The most heated exchange last year came when JPMorgan CEO Jamie Dimon and Sen. Elizabeth Warren (D-Mass.) went back and forth about overdraft fees.
- This year, bank CEOs are expected to tout how their overdraft policies have evolved. Dimon's written statement submitted to the House dedicates a whole section to the issue (versus a single bullet last year).
- Still, the progress some CEOs point to may not be enough to satisfy those calling for a crackdown on the practice. Banks' go-to defense: eliminating overdraft services altogether will push cash-strapped consumers to costlier alternatives, like payday lenders.
Industry sources anticipate Democratic lawmakers will also grill the group about fraud on instant payment platform Zelle, prompted by a New York Times story in June that outlined "widespread fraud." Customers couldn't recoup payments mistakenly sent to scammers.
- But trade groups have released stats that show a smaller share of transactions disputed as fraudulent on the platform — which is owned by a consortium of most of the banks represented on today's panel — compared to competitors like PayPal or CashApp.
- PNC chief executive Bill Demchak will tell Congress the bank abides by a regulation that protects payments when scammers have obtained consumers' account info illegally. The point of contention is if this rule does (or should) cover individuals who themselves unwittingly send payments to scammers.
Of note: Prepare to hear about ESG-related issues. In the past Democrats have probed the banks about, for one, what they are doing to combat climate change. Republicans have railed against calls for banks to curb lending to oil and gas industries.
What's next: The CEOs will appear before the House Financial Services Committee at 10am ET Wednesday.
- Thursday, they will appear before the Senate Banking Committee.