CEOs of nation’s biggest banks warn new regulations could harm economy

Jane Fraser, CEO of Citigroup, speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon)
Jane Fraser, CEO of Citigroup, speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon)

NEW YORK (AP) -- The heads of Wall Street's biggest banks used an appearance Wednesday on Capitol Hill to plead with senators to stop the Biden administration's proposed changes to how banks are regulated, warning the new proposals could negatively impact the economy at a time of geopolitical turmoil and inflation.

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 included JPMorgan's Jamie Dimon, Bank of America's Brian Moynihan, Jane Fraser of Citigroup and Goldman Sachs' David Solomon.

Whereas in previous years the bank CEOs used the hearing to highlight the industry's good deeds, this year they warned about the potential dangers of over-regulating the industry.

The banks are adamantly against a number of proposed regulations that could hit their profitability, including new rules from the Federal Reserve that would require big banks to hold additional capital on their balance sheets. The industry says the new regulations, known as the Basel Endgame, would curtail lending and weaken bank balance sheets at a time when the industry needs more flexibility.

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.

"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 James Gorman, CEO of Morgan Stanley, in response to a question.

The other seven CEOs were uniform in their comments in both their prepared remarks and answers to Senators' questions.

"(The regulations) were not thoughtfully done and should be relooked at," Dimon said.

The industry's opposition has saturated the Washington media market during the last several weeks, which came up in senators' remarks during the hearing.

"You should stop pouring money into lobbying against efforts to protect the taxpayers who subsidize your entire industry," said Sen. Sherrod Brown, D-Ohio and the committee chairman.

Brown, a longtime big bank critic, is unlikely to be persuaded by the CEOs' comments. Instead the CEOs were aiming to reach more moderate Democratic members of the committee. Only a handful of Democrats asked questions in support of the new regulations, while most Republicans did appear to be against the rules.

  photo  Charles W. Scharf, CEO and President, Wells Fargo & Company; Brian Thomas Moynihan, Chairman and CEO, Bank of America; Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.; Jane Fraser, CEO, Citigroup; Ronald O'Hanley, CEO, State Street; Robin Vince, CEO, BNY Mellon; David Solomon, CEO, Goldman Sachs; and James P. Gorman, CEO, Morgan Stanley, testify during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co., speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Chairman Sherrod Brown, of Ohio, speaks with Brian Thomas Moynihan, left, Chairman and CEO, Bank of America; Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.; Jane Fraser, CEO, Citigroup; Ronald O'Hanley, CEO, State Street; Robin Vince, CEO, BNY Mellon; David Solomon, CEO, Goldman Sachs; James P. Gorman, CEO, Morgan Stanley, before a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Charles W. Scharf, CEO and President, Wells Fargo & Company; Brian Thomas Moynihan, Chairman and CEO, Bank of America; Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.; Jane Fraser, CEO, Citigroup; Ronald O'Hanley, CEO, State Street; Robin Vince, CEO, BNY Mellon; David Solomon, CEO, Goldman Sachs; James P. Gorman, CEO, Morgan Stanley, stand and are sworn in during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Charles W. Scharf, left, CEO and President, Wells Fargo & Company; Brian Thomas Moynihan, Chairman and CEO, Bank of America; Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.; Jane Fraser, CEO, Citigroup; Ronald O'Hanley, CEO, State Street; Robin Vince, CEO, BNY Mellon; David Solomon, CEO, Goldman Sachs; and James P. Gorman, CEO, Morgan Stanley, raise their hands in answer to a member's question during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., takes a photo of journalists before a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Brian Thomas Moynihan, Chairman and CEO, Bank of America, listens during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Charles W. Scharf, CEO and President, Wells Fargo & Company, listens during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. (AP Photo/Alex Brandon)
 
 
  photo  Charles W. Scharf, left, CEO and President, Wells Fargo & Company; Brian Thomas Moynihan, Chairman and CEO, Bank of America; Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.; Jane Fraser, CEO, Citigroup; Ronald O'Hanley, CEO, State Street; Robin Vince, CEO, BNY Mellon; David Solomon, CEO, Goldman Sachs; are seated as James P. Gorman, right, CEO, Morgan Stanley, takes a photo before a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon)