Bank CEOs to testify as U.S. Congress ramps up scrutiny of Wall Street

Reuters

Published Apr 15, 2021 01:40PM ET

Updated Apr 15, 2021 04:11PM ET

By Michelle Price

WASHINGTON (Reuters) -The U.S. Congress will hold hearings next month with the chief executives of major Wall Street banks as Democratic lawmakers step up scrutiny of the role lenders have played in helping struggling Americans recover from the COVID-19 pandemic.

The House Financial Services Committee and the Senate Banking Committee will hear testimony from JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC) , Citigroup Inc (NYSE:C) , Wells Fargo (NYSE:WFC) & Co , Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS), according to a notice from the House of Representatives committee.

The virtual hearings scheduled for May 26 and 27 could determine how much legislative and political risk the biggest banks will face through 2022, Jaret Seiberg at Cowen Washington Research Group wrote on Thursday.

"These hearings may offer more upside than risk. A strong performance from the bank executives may discourage progressive Democrats from scheduling more hearings or from introducing adverse legislation," he added.

While the industry's image in Washington has improved since the financial crisis a decade ago, Democratic lawmakers have expressed skepticism that lenders are doing all they can to help Americans and small businesses hurt by the pandemic.

They are likely to grill the CEOs on the industry's role in the small-business Paycheck Protection Program and ask them to address concerns, flagged by several congressional reports, that lenders dished out the cash to fraudsters and discriminated against some borrowers.

Industry officials also expect lawmakers to focus on how mortgage lenders are helping homeowners, and whether they are doing enough to prevent a foreclosure crisis. Other Democratic goals, including tackling racial injustice and climate change, are also expected to feature in the discussion.