Bank CEOs to Testify to Congress on Their Work in the Age of COVID

JPMorgan Chase & Co., Bank of America Corp. and their biggest rivals are gearing up to tell lawmakers they have stepped up efforts to bank underserved communities, before considering their loans to Americans facing times difficult during the pandemic.

“We have taken steps to ensure that those in need, including those without access to traditional banking services, receive each round of stimulus payments quickly,” said Jamie Dimon, Managing Director of JPMorgan, according to remarks prepared for his appearance alongside other bank CEOs ahead of Congress on Wednesday and Thursday. The bank has also delayed payments and extended forbearance options on mortgage and other accounts, and has funded more than 400,000 small business loans, it says.

The two days of testimony will mark the first time major bankers will face public cross-examination – albeit on video – since Democrats took control of the Senate and the White House earlier this year. CEOs expect to encounter frustration from policymakers worried about evictions and mortgage defaults after historic job losses, as well as the pace of lending to consumers and small businesses. Bankers said weak loan growth was the product of weak demand.

In prepared remarks, Brian Moynihan of Bank of America and Charlie Scharf of Wells Fargo & Co. highlighted the loans and services they have provided during the COVID-19 crisis, including to underserved communities. They highlighted their role in disbursing loans under the government’s Paycheck Protection Program, an initiative designed to help small businesses keep workers on their payroll. Bank of America said it does not prioritize customer demands in its PPP loans to nearly 500,000 small businesses. Wells Fargo loans have supported 1.7 million jobs, Scharf said.

Despite these efforts, the recovery of the pandemic economy is uneven and the struggle continues for many, said Jane Fraser of Citigroup Inc. in her prepared remarks.

“We are already seeing the shoots of a K-shaped recovery in which some will do better and others will struggle,” Fraser said. “Unfortunately, those who will struggle have historically been economically disadvantaged and they will need special attention from our industry.”

Among its initiatives, Citigroup has expanded access to check cashing services for non-customers, removed surcharges for prepaid debit cards issued for stimulus payments, and changed policies covering garnishment of payments from relaunching customers, Fraser said.

Lawmakers also lobbied banks for more disclosure about racial and gender equality within their own ranks. Fraser became the first woman to head a major U.S. bank, while others began releasing stronger metrics on their workforce and raised more women to senior positions. Dimon of JPMorgan underscored the bank’s commitments to promoting racial equity, noting that while his bank’s investment commitment is significant, “we know there is still work to be done.”

Goldman Sachs Group Inc. CEO David Solomon cited goals to increase diversity at many levels of recruitment.

“I believe that an essential part of my tenure as CEO will be defined by our progress on this front,” he said in prepared remarks. “I think we should have a business that looks like the regions and communities we serve.”

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