From today’s CBS News Online:
Making their first appearance before Congress since the financial crisis a decade ago, the CEOs of America’s biggest banks told lawmakers their financial institutions are now smaller and are taking on less risk.
With Democrats in control of the U.S. House, banks and the men that lead them are facing renewed scrutiny over their practices and record profits.
Since the massive taxpayer-funded bank bailout in 2009, large U.S. banks have raked in $780 billion in profits — nearly five times the amount they paid in fines. “[N]o one has made out better than the CEOs,” Maxine Waters, D.-California, chair of the U.S. House Financial Services Committee, said in starting the hearing.
The financial giants represented at the gathering include seven of eight global “systemically important” banks, which paid a total of nearly $164 billion in fines during the last 10 years, according to a committee memorandum. Because their profits greatly exceed the penalties, Waters questioned whether banks view regulatory fines as simply the cost of doing business.
New York Democrat Alexandria Ocasio-Cortez pointed to a litany of what she described as bank misdeeds, from JPMorgan’s failure to oversee its trading practices in 2013 to last month’s $25 million fine against Citibank for violating the Fair Housing Act. “I have concerns about how much things have changed,” she told the bankers.
Ocasio-Cortez also questioned the fairness of a legal system that fines banks for legal violations but imprisons low-income people for relatively minor offenses. Mentioning that Riker’s Island is part of her congressional district, the lawmaker said: “I represent kids who go to jail for jumping a turnstile because they couldn’t afford a metro card.”
JPMorgan Chase CEO Jamie Dimon responded by saying he did not support prison for turnstile jumping. He drew praise from the freshman lawmaker for JPMorgan’s decision last month to halt financing of private operators of prisons and detention centers.
The last time the panel convened such a hearing, the country was in recession and the CEOs had to explain taking billions in taxpayer bailouts. Banks have since by-and-large repaid taxpayers and bounced back to record profits.
Read the complete article here.