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Republicans warn bank CEOs to steer clear of social, cultural issues

Economy Sep 22, 2022 02:41PM ET
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© Reuters. FILE PHOTO: Senator Pat Toomey speaks in the Dirksen Senate Office Building in Washington, D.C.,U.S., May 10, 2022. Tom Williams/Pool via REUTERS/File Photo/File Photo
 
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By Pete Schroeder, Lananh Nguyen and Saeed Azhar

WASHINGTON (Reuters) - The heads of the nation's largest banks faced pointed criticism on Thursday from Republicans complaining the firms are inappropriately taking liberal stances on social and cultural issues.

Senator Pat Toomey, the senior Republican on the Senate Banking Committee, urged banks to stop "embracing a liberal ESG agenda that harms America," as chief executives appeared before Congress for an oversight hearing. Toomey, frequently a bank ally who has opposed stricter industry rules, argued firms are out of bounds when they weigh in on non-banking issues like guns and abortion.

"I can't help but observe that when banks do weigh-in on highly charged social and political issues, they seem to always come down on the liberal side," he said in his opening statement.

The increased scrutiny underscores the challenges the country's largest lenders increasingly face as they try to balance commercial interests with pressure from policymakers, activists and investors to take stances on environmental, social and governance (ESG) issues.

Multiple Republicans argued banks are caving to liberal pressure to weigh in on such issues, and suggested conservatives will be quick to counterbalance with their own pushback. Sen. Kevin Cramer said banks were feeling pressure to be "one of the cool crowd."

Cramer, a North Dakota Republican, got the CEOs gathered to promise that a recently approved merchant code to record gun store transactions would not be used to limit firearms purchases.

"We do not intend to use the code to limit or restrict the purchase of firearms," said Citigroup (NYSE:C) CEO Jane Fraser, who added, "We respect the second amendment."

The line-up included CEOs of the four largest U.S. banks: JPMorgan Chase & Co (NYSE:JPM)'s Jamie Dimon, Wells Fargo (NYSE:WFC)'s Charles Scharf, Bank of America (NYSE:BAC)'s Brian Moynihan and Citi's Fraser. They were joined by the CEOs of the country's largest regional lenders, US Bancorp (NYSE:USB), PNC Financial (NYSE:PNC) and Truist.

ZELLE CRITICISM

For their part, Democrats continued their critical stance towards big banks, arguing they are enjoying large profits while mistreating consumers and workers. None of the CEOs in attendance affirmatively agreed with Chairman Sherrod Brown's request that they remain neutral in any employee unionization efforts.

Sen. Elizabeth Warren blasted banks for what she said were unacceptable levels of fraud on Zelle, the digital payments tool owned by several of the largest banks. She criticized firms for not providing complete data on the level of Zelle fraud seen at each bank, with several CEOs promising to provide the information by the end of the day. Warren sent a letter seeking such information in July.

"You tell people that it is safe, but when someone is defrauded, you claim that's the customer's problem," she said.

Brown said told reporters after the hearing Democrats "will stay on them" until full fraud figures are provided.

PNC CEO William Demchek said banks are committed to solving any problems with Zelle, but urged policymakers to scrutinize other peer-to-peer payment programs, which he said had far higher levels of fraud.

"We'll fix Zelle," he said.

The CEOs said their banks cover any unauthorized transactions, but would not commit to repaying all fraud claims from customers.

CEOs were in Washington for a second day of oversight hearings. On Wednesday, executives were pressed by lawmakers to take a tougher stance on doing business with China amid growing tensions between Washington and Beijing over Taiwan's sovereignty and China's human rights record.

Republicans warn bank CEOs to steer clear of social, cultural issues
 

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Comments (3)
First Last
First Last Sep 22, 2022 2:33PM ET
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Toomey, who's telling banks to shut the f up unless they agree w/ him, is not a leftists.  Both the left & right practice cancel culture.  But the right thinks it doesn't (even as it burns books) and only the other side does.
Tony Hall
Tony Hall Sep 22, 2022 1:35PM ET
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This is why Crypto was created during the obama watch. When the admistration started pressuring banks to push their agenda which violated our civil liberty’s. Magically crypto came into the forefront. This admistration is trying to do the same thing. Cut out the banks (the middle man) and go straight to the source. Company’s that except crypto will adventually do more business. Transactions the government are trying to track will not be able to do so through crypto. They can keep their ESG and woke beuracricy but eventually a price will be paid.
Alan Rice
Alan Rice Sep 22, 2022 1:35PM ET
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(and crypto gamblers will continue to pay that price.) "Invest" @ your own risk.
Benjamin USA
Benjamin USA Sep 22, 2022 1:35PM ET
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Lmao such brain dead logic haha, crypto was created as a transaction replacement and popularized as a ponzi scheme. Keep being cucked though by your triggeredness though hahaha
Tony Hall
Tony Hall Sep 22, 2022 1:35PM ET
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Benjamin USA Talk about brain dead. Crypto was created in 2008 to decentralize ourself from the banking system or any government regulations and to protect our transactions. Guess what DS its working. Keep hanging on to the government coatails and see where it takes you.
Tony Hall
Tony Hall Sep 22, 2022 1:35PM ET
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Alan Rice I am pretty sure there were a lot more millionaires derrived from the crypto market over the past 5 years then the stock market by far. Thats not even the case though. The abilty to transact is your privacy and it is easy to switch from euros to crypto to dollars or what ever you want without risk. The theory is not for investment purposes its for your freedom. Try it, you might like it. You dont need the government to survive and be happy.
tricky nick
tricky nick Sep 22, 2022 1:35PM ET
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governments around the world wouldn't be working on regulations and trying to control crypto if it didn't do what it was designed for and profitable. they have fought tooth and nail to crash crypto and stress test it. guess what it's only getting more adoption every day
taylor jason
taylor jason Sep 22, 2022 11:08AM ET
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what an ironic contradiction. in one breath he does not want banks to promote ESG policies and in the other he says banks shouldn't support China for their human rights violations. lol
Don Getty
Don Getty Sep 22, 2022 11:08AM ET
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he's in the GOP we want democracy - but only the kind of democracy that allows us and our friends to screw you - next GOP pres will make Jan. 6th into a holiday remembering those who died trying to give us our new beloved democracy (dictatorship)!
First Last
First Last Sep 22, 2022 11:08AM ET
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Pat Toomey only wants banks to weigh in when they agree w/ him.  Otherwise, he's for cancel culture.
Matthew Petyk
Matthew Petyk Sep 22, 2022 11:08AM ET
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unreal.. leftists squaking about cancel culture. look in the mirror. hypocrites. it is YOU that demand people and companies conform to the liberal, "progressive", cult- think. if not, then the nonconformists must be canceled. It amazing the hypocrites on the left. The brainwashing must ve very strong.
Benjamin USA
Benjamin USA Sep 22, 2022 11:08AM ET
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Matthew Petyk triggered cuck lololol
Jurgen Daub
Jurgen Daub Sep 22, 2022 11:08AM ET
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brainwash? only applies only the right cultists and orange cake admirers
 
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