JPMorgan Chase & Co., Bank of America Corp. and their largest rivals are preparing to tell lawmakers they’ve stepped up efforts to bank under-served communities, ahead of scrutiny into their lending to Americans facing hard times during the pandemic.
The two days of testimony will mark the first time top bankers have faced a public cross-examination -- albeit on video -- since Democrats took control of the Senate and the White House early this year. The CEOs are expecting to meet with frustration from policymakers who are concerned about evictions and mortgage defaults after historic job losses, as well as the pace of lending to consumers and small businesses. Bankers have said sluggish loan growth has been a product of low demand.
Bank of America’s Brian Moynihan and Charlie Scharf of Wells Fargo & Co. highlighted in prepared remarks the loans and services they extended during the Covid-19 crisis, including to under-served communities. They pointed to their roles disbursing loans under the government’s Paycheck Protection Program, an initiative designed to help small businesses keep workers on payroll. Bank of America didn’t prioritize client applications in its provision of PPP loans to almost 500,000 small businesses, it said. Wells Fargo’s lending supported 1.7 million jobs, according to Scharf.
Despite such efforts, the recovery from an economy nearly shuttered by the pandemic is uneven and the struggle continues for many, Citigroup Inc.’s Jane Fraser said 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,” said Fraser. “Unfortunately, those who will struggle have been economically disadvantaged historically, and they will need special attention from our industry.”
Among its initiatives, Citigroup expanded access to check-cashing services for non-customers, scrapped surcharges for prepaid debit cards issued for stimulus payments and tweaked policies covering the garnishment of customer stimulus payments, Fraser said.
Lawmakers have also been pressing the banks for more disclosure on racial and gender equality within their own ranks. Fraser became the first woman to lead a big six U.S. bank, while others have begun to report more robust metrics about their workforces and elevated more women to senior roles. JPMorgan’s Dimon highlighted the bank’s commitments toward advancing racial equity, noting that while his bank’s investment commitment is significant, “we know there’s more work to do.”
Goldman Sachs Group Inc. CEO David Solomon cited goals to boost diversity across many levels of hiring.
“I believe a core part of my tenure as CEO will be defined by our progress on this front,” he said in prepared remarks. “I believe that we should have a company that looks like the regions and communities we serve.”
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