Current:Home > InvestBig bank CEOs warn that new regulations may severely impact economy -WealthSpot
Big bank CEOs warn that new regulations may severely impact economy
View
Date:2025-04-16 14:08:23
NEW YORK (AP) — The heads of the nation’s biggest banks say there are reasons to be concerned about the health of U.S. consumers — particularly poor and low-income borrowers — in their annual appearance in front of Congress on Wednesday.
The CEOs of JPMorgan Chase, Bank of America, Wells Fargo and five other large firms also took the opportunity to impress upon senators that the Biden Administration’s new proposed regulations for the industry may hurt the U.S. economy going into an election year and at a time when a recession is possible.
Wall Street’s most powerful bankers have regularly appeared in front of Congress going back to the 2008 financial crisis. Among those testifying before the Senate Banking Committee include JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Jane Fraser of Citigroup and Goldman Sachs’ David Solomon.
When both houses of Congress were controlled by Democrats, the CEOs would appear in front of both the House Financial Services Committee and the Senate banking panel. Now that Republicans control the House, only the Senate is holding a hearing this year.
The CEOs are using their appearance in front of the Senate differently this year. Whereas in previous years they used the hearing to highlight the industry’s good deeds, this year they’re warning about the potential dangers of overregulating the industry.
The banks are adamantly against new regulations proposed by the Biden Administration that could hit their profitability hard, including new rules from the Federal Reserve that would required big banks to hold additional capital on their balance sheets. The industry says the new regulations, known as the Basel Endgame, would hurt lending and bank balance sheets at a time when the industry needs more flexibility.
“Almost every element of the Basel III Endgame proposal would make lending and other financial activities more expensive, especially for smaller companies and consumers,” Fraser said in her prepared remarks.
The other seven CEOs were uniform in their comments in their prepared remarks.
The industry’s opposition has saturated the Washington media market over the last several weeks, which came up in senators’ remarks during the hearing.
“If you’ve watched the local news in Washington, if you’ve waited at a bus stop in Washington, if you’ve flown out of Washington national airport, you’ve probably seen ads urging people to, quote, ‘Stop Basel Endgame,’” said Sen. Sherrod Brown, the committee chairman.
“You should stop pouring money into lobbying against efforts to protect the taxpayers who subsidize your entire industry,” Brown later said.
There are also proposals coming from the Consumer Financial Protection Bureau that would rein in overdraft fees, which have also been a longtime source of revenue for the consumer banks.
This year has been a tough one for the banking industry, as high interest rates have caused banks and consumers to seek fewer loans and consumers are facing financial pressure from inflation. Three larger banks failed this year — Signature Bank, Silicon Valley Bank and First Republic Bank — after the banks experienced a run on deposits and questions about the health of their balance sheets.
veryGood! (39)
Related
- Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Hi Hi!
- As Texas border arrests law teeters in court, other GOP states also push tougher immigration policy
- Cicadas 2024: This year's broods will make for rare event not seen in over 200 years
- Missouri Supreme Court declines to halt execution of a man who killed 2 in 2006
- Finally, good retirement news! Southwest pilots' plan is a bright spot, experts say
- A Kentucky judge dismisses lawsuit but protects historic mural that has sparked protests
- Philadelphia mass shooting suspect is headed to trial after receiving mental health treatment
- Biden administration to invest $8.5 billion in Intel's computer chip plants in four states
- Trump invites nearly all federal workers to quit now, get paid through September
- Mother, 37-year-old man arrested after getting involved in elementary school fight: Reports
Ranking
- 'Survivor' 47 finale, part one recap: 2 players were sent home. Who's left in the game?
- Alyssa Raghu denies hijacking friend's 'American Idol' audition, slams show's 'harmful' edit
- New 'Ghostbusters' review: 2024 movie doubles down on heroes and horror, but lacks magic
- NFL free agency 2024: Top 20 free agents still available as draft day looms
- Why members of two of EPA's influential science advisory committees were let go
- Shop Like a Frugal Billionaire in Amazon Outlet's Big Spring Sale Section, With Savings Up to 68% Off
- Georgia lawmakers approve income tax cuts for people and businesses
- Infant dies days after 3 family members were killed in San Francisco bus stop crash
Recommendation
Opinion: Gianni Infantino, FIFA sell souls and 2034 World Cup for Saudi Arabia's billions
The elusive Cougar's Shadow only emerges twice a year – and now is your last chance to see it until fall
A 'new' star will appear in the night sky in the coming months, NASA says: How to see it
Homelessness, affordable-housing shortage spark resurgence of single-room ‘micro-apartments’
Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
Hurry! Only six weeks left to consolidate student loan debt for a shot at forgiveness
Most popular dog breed rankings are released. Many fans are not happy.
Woman goes viral with $12 McDonald's dinner box that feeds family of 5. Can you get one?