WASHINGTON — The heads of the nation’s big Wall Street firms were back on Capitol Hill on Tuesday, the start of two days hearings where the big banks are expected to be scolded by members of Congress on both sides of the aisle over issues like inequality and the corporate culture of Wall Street.
The first hearing is happening in front of the Senate Banking Committee, headed by the Sen. Sherrod Brown, D-Ohio. A self-described progressive, Brown said that when he became chair of the committee earlier this year, he planned to subpoena the CEOs to testify as soon as he could.
WHY ARE BANKS TESTIFYING?
Since Democrats took control of the House in 2019, the heads of the major banks have been summoned annually to testify in front of the House Financial Services Committee, chaired by Rep. Maxine Waters, D-California. The Senate, which is holding its hearing first, is following her lead.
WHAT ARE THE HOT BUTTON ISSUES?
The banks are appearing in front of Congress as the U.S. economy is recovering from the pandemic. The industry, which was blamed for the Great Recession more than a decade ago, has spent most of 2020 and now 2021 trying to appear helpful and willing to work with struggling borrowers and businesses.
Most of those measures are now going away. Congress will likely also have questions regarding what banks are doing to increase diversity among their ranks, and address systematic financial inequality between Black and Latino households and white households.
Senate Republicans are likely to push back on issues like increased regulation and promote programs they created last year when they controlled the Senate like the Paycheck Protection Program.
WHO IS TESTIFYING?
The panel of CEOs testifying this year is smaller and has changed slightly. Familiar faces include Jamie Dimon, CEO of JPMorgan Chase, as well as Goldman Sachs’ David Solomon, Morgan Stanley’s James Gorman, and Bank of America’s Brian Moynihan. A new face on the panel is Jane Fraser, the new CEO of Citigroup, and the first female CEO of a big bank.
Gone are the two CEOs of two banks, Bank of New York-Mellon and State Street. Both of those banks don’t have consumer financial businesses, and their previous appearances in front of Congress were seen as a waste of time.