JPMorgan Chase’s Jamie Dimon, Citigroup’s Jane Fraser, Wells Fargo’s Charles Scharf, and Bank of America’s Brian Moynihan and other chief executives testified Thursday before the Senate Committee on Banking, Housing, and Urban Affairs.
They were joined by the CEOs of the country’s largest regional lenders, US Bancorp, PNC Financial, and Truist.
During his opening statement at the hearing, Senator Pat Toomey (R-Pa.), the senior Republican on the Senate Banking Committee highlighted concerns about what he said was the growing number of banks who are “inserting themselves into highly charged social and political issues unrelated to their business.”
Toomey warned that banks who continue to do so risk being treated as “public utilities” by both Democrats and Republicans in the future.
“At the outset, let me acknowledge what should be obvious: banks are essential for supporting the economy and advancing American competitiveness,” Toomey said.
“But where I see a system at the heart of free enterprise, I worry other policymakers see opportunity for social engineering. Activist regulators and some of my colleagues see banks as a tool by which they can advance their social policy,” the lawmaker continued.
‘Highly Charged Social, Political Issues’
“Unfortunately, there’s a growing trend of banks—several of them are represented here today—inserting themselves into highly charged social and political issues unrelated to their businesses. Banks’ willingness to help liberal policymakers achieve their liberal goals makes it very difficult to mount a principled defense against such politicization.”
Toomey added that some of his colleagues are putting pressure on banks to “use both their balance sheets and their influence to address issues wholly unrelated to banking, such as global warming, gun control, voter rights, and abortion” and that “several large banks have been far too willing to acquiesce to these demands by embracing a liberal [environmental, social, and governance] agenda that harms America.”
Additionally, Republican lawmakers noted that banks have weighed in on contentious social issues, with Toomey stating that in some cases, banks had even “made business decisions based on these factors.”
Toomey cited banks caving in to pressure from Democrats by pledging to pay for the costs of their employees to travel to have abortions following the Supreme Court decision to overturn Roe v. Wade.
Toomey said banks are “currently at a critical crossroads: Accept the role that some liberals prefer which is to have your institutions implement social policy on behalf of the State, or embrace your history as drivers and promoters of free enterprise and stay out of highly charged social and political issues.”
‘We Respect The Second Amendment’
In response, JPMorgan Chase’s Jamie Dimon appeared to agree with one of Toomey’s assertions that federal regulators, as well as asset managers, had the power to influence banks when it comes to social issues, including those related to climate change or lending to oil and gas companies.
“Speaking for myself, (the regulators) are my judge, my jury, and my hangman,” Dimon said. “They can do whatever they want unless constrained by you,” referring to Congress.
Elsewhere, Sen. Kevin Cramer (R-N.D.) urged CEOs gathered at the hearing to ensure that recently approved merchant category codes (MCC) to record gun store transactions would not be used to limit the purchase of firearms.
“We do not intend to use the code to limit or restrict the purchase of firearms,” said Citigroup CEO Jane Fraser, who added, “We respect the second amendment.”
Reuters contributed to this report.