WASHINGTON–The heads of the nation’s largest banks told Congress this week they are opposed to a number of proposals they said are leading to new regulations that will hurt the economy, while also raising objections to new rules around overdrafts.
Among the seven CEOs testifying before the Senate Banking Committee were JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Citigroup’s Jane Fraser and
Goldman Sachs’ David Solomon.
Among the proposals over which the CEOs most strenuously objected were new rules from the Federal Reserve that would require big banks to hold additional capital on their balance sheets, which is known as the Basel Endgame.
In addition, the CEOs also objected to pending proposals from the Consumer Financial Protection Bureau that seek to rein in overdraft fees. The objections were raised even though many of the biggest banks have eliminated or significantly reduced overdraft fees as they have turned to other sources of revenue.
‘Doesn’t Make Sense’
“I’ve been at this for a long time. I’ve sat on the board of the New York Federal Reserve. I’ve seen a lot of rules, and (this proposal) just doesn’t make sense,” said Morgan Stanley’s James Gorman.
Added JPMorgan’s Dimon, “(The regulations) were not thoughtfully done and should be relooked at,” Dimon said.
But Senate Banking Committee Chair Sen. Sherrod Brown (D-OH) said the banks should consider cutting their expenses in another area.
“You should stop pouring money into lobbying against efforts to protect the taxpayers who subsidize your entire industry,” said Brown.
The senators were largely divided by party when it came to the concerns expressed, with Democrats more critical of the industry and Republicans more critical of the proposed rules.
Two Exceptions
There were a few exceptions. For example, the bank CEOs said they largely supported Sen. Elizabeth Warren’s (D-MA) cryptocurrency anti-money laundering bill, which would require crypto firms to follow the same AML rules as other financial institutions.
Dimon said he would shut down crypto entirely if he had the power.
In addition, Ohio Republican. Sen. J.D. Vance of Ohio asked the CEOs why they support public policy positions like gun control, voter ID laws and other bills, but then want to turn to the GOP for reduced regulation and lower taxes “when it suits them.”
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