(Bloomberg) — House Financial Services Committee Chairwoman Maxine Waters rebuked Wall Street CEOs for charging overdraft penalties during the pandemic and contributing to “banking deserts” by shutting branches in underserved communities.
Firms “raked in billions in overdraft fees” at a time when millions of families were struggling through “no fault of their own,” Waters, a California Democrat, said during a Thursday hearing. She added that lenders haven’t done enough to provide credit to small businesses and minorities.
Her comments kicked off the second day of testimony from the chief executive officers of the six biggest U.S. banks. Waters made clear that with Democrats in control of both the House and Senate, they should get used to answering lawmakers’ questions. “I have made it a priority to ensure we are conducting rigorous oversight of megabanks and their activities,” she said.
Representative Patrick McHenry, the senior Republican on the panel, dismissed the session as the “sequel that nobody asked for.” Still, he warned the executives that his party was growing tired of Wall Street’s leftward move on social issues, a “political activism” that McHenry said was being encouraged by Democrats. That theme came up repeatedly Wednesday, with GOP senators criticizing banks for curtailing lending to gun manufacturers and oil drillers.
“When you mix business and politics, you get politics,” North Carolina’s McHenry noted. “Our political waters are quite troubling and we don’t need the business world to become the political world.”
The CEOs had a chance to fine-tune their remarks during Wednesday’s Senate Banking Committee hearing. While they took heat from both Republicans and Democrats, the executives were mostly able to avoid controversy during several hours of testimony.
The six bank leaders came well prepared with statistics on workplace diversity, low-income lending and assistance they gave both employees and customers who were facing economic hardships during the pandemic. They also noted that their firms, thanks to government capital rules, had no problems surviving the turmoil.
The House panel, however, is much larger and its members are known for asking off-beat questions and making politically polarized statements. A number of lawmakers have pet issues that they are likely to raise, such as China policy, cryptocurrencies, racial justice, boosting the nation’s supply of affordable housing and pushing banks to help fight climate change.
Waters held a similar hearing in 2019 and five of the CEOs will be facing the committee for the second time. New to the proceedings is Citigroup Inc.’s Jane Frazer, the first woman to run a major Wall Street firm.
Joining her will be JPMorgan Chase & Co.’s Jamie Dimon, Goldman Sachs Group Inc.’s David Solomon, Bank of America Corp.’s Brian Moynihan, Morgan Stanley’s James Gorman and Wells Fargo & Co.’s Charles Scharf.