[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]




                                                          


                     HOLDING MEGABANKS ACCOUNTABLE:


                     OVERSIGHT OF AMERICA'S LARGEST


                         CONSUMER FACING BANKS

=======================================================================

                             HYBRID HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 21, 2022

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 117-100
                           
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]       
 
 
                      
              HOLDING MEGABANKS ACCOUNTABLE: OVERSIGHT OF

                AMERICA'S LARGEST CONSUMER FACING BANKS
                
                
                
                





 
                     HOLDING MEGABANKS ACCOUNTABLE:

                     OVERSIGHT OF AMERICA'S LARGEST

                         CONSUMER FACING BANKS

=======================================================================

                             HYBRID HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 21, 2022

                               __________

       Printed for the use of the Committee on Financial Services
       

                           Serial No. 117-100
                           
                           
                           
                             ______
 
              U.S. GOVERNMENT PUBLISHING OFFICE 
 48-840 PDF            WASHINGTON : 2022                          
                           
                           
                           
                           

                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York           BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            ANN WAGNER, Missouri
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            ROGER WILLIAMS, Texas
BILL FOSTER, Illinois                FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio                   TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
CINDY AXNE, Iowa                     TREY HOLLINGSWORTH, Indiana
SEAN CASTEN, Illinois                ANTHONY GONZALEZ, Ohio
AYANNA PRESSLEY, Massachusetts       JOHN ROSE, Tennessee
RITCHIE TORRES, New York             BRYAN STEIL, Wisconsin
STEPHEN F. LYNCH, Massachusetts      LANCE GOODEN, Texas
ALMA ADAMS, North Carolina           WILLIAM TIMMONS, South Carolina
RASHIDA TLAIB, Michigan              VAN TAYLOR, Texas
MADELEINE DEAN, Pennsylvania         PETE SESSIONS, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   RALPH NORMAN, South Carolina
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts

                   Charla Ouertatani, Staff Director
                   
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    September 21, 2022...........................................     1
Appendix:
    September 21, 2022...........................................   103

                               WITNESSES
                     Wednesday, September 21, 2022

Cecere, Andy, Chairman, President, and CEO, U.S. Bancorp.........     5
Demchak, William, Chairman, President, and CEO, The PNC Financial 
  Services Group, Inc............................................     6
Dimon, Jamie, Chairman and CEO, JPMorgan Chase & Co..............     8
Fraser, Jane, CEO, Citigroup.....................................    10
Moynihan, Brian, Chairman and CEO, Bank of America...............    11
Rogers, William H., Jr., Chairman and CEO, Truist Financial 
  Corporation....................................................    13
Scharf, Charles W., President and CEO, Wells Fargo and Company...    15

                                APPENDIX

Prepared statements:
    Cecere, Andy.................................................   104
    Demchak, William.............................................   115
    Dimon, Jamie.................................................   139
    Fraser, Jane.................................................   153
    Moynihan, Brian..............................................   166
    Rogers, William H., Jr.......................................   190
    Scharf, Charles W............................................   226

              Additional Material Submitted for the Record

Waters, Hon. Maxine:
    American Association for Justice, ``Forced Arbitration and 
      Big Banks: When Consumers Pay To Be Ripped Off,'' dated 
      September 2022.............................................   247
    Written statement of the National Iranian American Council...   254
Rose, Hon. John:
    Federal Reserve, FDIC, National Credit Union Administration, 
      and OCC Joint Statement on the Risk-Based Approach to 
      Assessing Customer Relationships and Conducting Customer 
      Due Diligence, dated July 6, 2022..........................   257
    Article from The Wall Street Journal entitled, ``Gas-Station 
      ATMs Are a Banking Battleground,'' dated February 19, 2022.   259
Cecere, Andy:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   265
    Written responses to questions for the record from 
      Representative Garcia......................................   283
    Written responses to questions for the record from 
      Representative Green.......................................   287
    Written responses to questions for the record from 
      Representative Mooney......................................   284
    Written responses to questions for the record from 
      Representative Norman......................................   286
Demchak, William:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   299
    Written responses to questions for the record from 
      Representative Garcia......................................   290
    Written responses to questions for the record from 
      Representative Green.......................................   293
    Written responses to questions for the record from 
      Representative Mooney......................................   295
    Written responses to questions for the record from 
      Representative Norman......................................   297
Dimon, Jamie:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   328
    Written responses to questions for the record from 
      Representative Garcia......................................   357
    Written responses to questions for the record from 
      Representative Gooden......................................   356
    Written responses to questions for the record from 
      Representative Green.......................................   355
    Written responses to questions for the record from 
      Representative Mooney......................................   353
    Written responses to questions for the record from 
      Representative Norman......................................   351
Fraser, Jane:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   360
    Written responses to questions for the record from 
      Representative Garcia......................................   373
    Written responses to questions for the record from 
      Representative Green.......................................   375
    Written responses to questions for the record from 
      Representative Mooney......................................   378
    Written responses to questions for the record from 
      Representative Norman......................................   377
Moynihan, Brian:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   410
    Written responses to questions for the record from 
      Representative Garcia......................................   393
    Written responses to questions for the record from 
      Representative Green.......................................   397
    Written responses to questions for the record from 
      Representative Mooney......................................   400
    Written responses to questions for the record from 
      Representative Norman......................................   404
    Written responses to questions for the record from 
      Representative Timmons.....................................   408
    Written responses to questions for the record from 
      Representative Williams....................................   406
Rogers, William H., Jr.:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   443
    Written responses to questions for the record from 
      Representative Garcia......................................   437
    Written responses to questions for the record from 
      Representative Green.......................................   439
    Written responses to questions for the record from 
      Representative Mooney......................................   440
    Written responses to questions for the record from 
      Representative Norman......................................   442
Scharf, Charles W.:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   467
    Written responses to questions for the record from 
      Representative Garcia......................................   510
    Written responses to questions for the record from 
      Representative Green.......................................   504
    Written responses to questions for the record from 
      Representative Mooney......................................   502
    Written responses to questions for the record from 
      Representative Norman......................................   500


                     HOLDING MEGABANKS ACCOUNTABLE:

                     OVERSIGHT OF AMERICA'S LARGEST

                         CONSUMER FACING BANKS

                              ----------                              


                     Wednesday, September 21, 2022

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:05 a.m., in 
room 2128, Rayburn House Office Building, Hon. Maxine Waters 
[chairwoman of the committee] presiding.
    Members present: Representatives Waters, Maloney, Sherman, 
Scott, Green, Perlmutter, Himes, Foster, Beatty, Gottheimer, 
Lawson, San Nicolas, Axne, Casten, Pressley, Torres, Lynch, 
Adams, Tlaib, Dean, Ocasio-Cortez, Garcia of Texas, Williams of 
Georgia, Auchincloss; McHenry, Lucas, Luetkemeyer, Huizenga, 
Wagner, Barr, Williams of Texas, Hill, Loudermilk, Mooney, 
Davidson, Budd, Hollingsworth, Gonzalez of Ohio, Rose, Steil, 
Gooden, Timmons, Taylor, Sessions, and Norman.
    Chairwoman Waters. The Financial Services Committee will 
come to order.
    Without objection, the Chair is authorized to declare a 
recess of the committee at any time.
    Today's hearing is entitled, ``Holding Megabanks 
Accountable: Oversight of America's Largest Consumer Facing 
Banks.''
    I now recognize myself for 4 minutes to give an opening 
statement.
    Testifying before us today we have the CEOs of the seven 
largest U.S. commercial banks that each serve millions of 
consumers.
    As chairwoman of this committee, I have prioritized 
conducting rigorous oversight over our nation's largest banks 
and their activities. Last year, four of these megabanks 
testified before us.
    Since then, our nation continues to battle an ongoing 
epidemic--inflation--that is affecting every household's 
budget. Russia's invasion of Ukraine, rising interest rates, 
and other crises have battered our economy. In this 
environment, the role that banks play to protect consumers and 
provide access to affordable credit is absolutely critical.
    Over the past several years, we have seen the system of 
banking in this country take a dramatic shift. Our nation's 
largest banks have gotten even bigger during the pandemic, in 
part through mergers. Regulators have rubber-stamped these 
merger applications for far too long. And it is past time we 
get to the bottom of whom these mergers are actually 
benefiting.
    For starters, I remain concerned that branch closures 
across the country, which are often a consequence of mergers, 
are expanding banking deserts and harming communities that rely 
on branches for basic banking services.
    The committee will also examine banks' commitments to 
underserved communities. As our nation's racial wealth gap 
widens, and Black applicants and others continue to be 
discriminated against, I am eager to hear about their efforts 
to ensure that communities of color finally get their 
opportunities to build generational wealth.
    The CEOs will be asked for an update on the diversity and 
inclusion commitments they made following the murder of George 
Floyd, and details on additional measures they will take.
    In addition, following news that Equifax sent inaccurate 
credit scores to lenders, who in turn used them to charge 
consumers higher interest rates or even deny them credit, I 
would like to hear what these banks are doing to ensure that 
harms to their customers are identified and that those 
customers are made whole.
    As the compensation for these CEOs goes up dramatically 
when compared to the tellers and other customer-facing 
employees, many of the banks they represent have simultaneously 
earned the title, ``repeat offenders,'' for their continued 
violations of the law. The committee has received a long list 
of unlawful actions resulting in fines, but these fines pale in 
comparison to the billions in profits these banks make, and 
amount to nothing more than another cost of doing business.
    I would like to hear how these banks are working to update 
their compliance practices and that they commit to following 
the law.
    There are many other issues the committee will explore 
today, including the rise of emerging technologies. Many 
consumers have reported being scammed through money transfer 
apps like Zelle, and all of the banks before us shrug their 
shoulders.
    We also want to know what these banks are doing to protect 
their employees following the Supreme Court's shameful decision 
to abolish Roe v. Wade, along with efforts to combat gun 
violence and much more.
    So, I look forward to hearing testimony from our witnesses 
today. And I yield back.
    I now recognize the ranking member of the committee, Mr. 
McHenry, for 5 minutes.
    Mr. McHenry. Thank you, Madam Chairwoman.
    And, frankly, I disagree with the premise of this hearing. 
It is not because I disagree with holding folks accountable. 
Rather, it is the opposite. In fact, I think this committee has 
done woefully little over the past few years to hold agencies 
and those industries we oversee accountable.
    I disagree with this hearing because it is theater, not 
oversight. The Majority has had 2 years to do its job of 
oversight, and they have failed miserably. Now that we are just 
over a month away from the midterms, they are posturing.
    Democrats first held this hearing back in 2019 in search of 
a headline, and when they failed to garner the positive press 
they were seeking, Democrats felt emboldened by the Biden 
Administration and their one-party rule of Washington to drag 
the CEOs back in 2022, demanding they parrot their aggressive 
agenda.
    Now, one year later, we expect more of the same, this time 
at the expense of focusing on the real issues the American 
people are facing. And when it comes to the financial system, 
the list of issues is long. We are going to hear Democrats 
encourage banks to make lending decisions based on woke 
politics rather than creditworthiness. We're going to talk 
about social issues rather than economic issues, although we 
are an economic committee.
    But that is not all. Unelected bureaucrats, Congressional 
Democrats, and the Biden Administration have conspired to 
create uncertainty and stifle innovation in our financial 
system. This will create long-term problems. They are targeting 
essential and popular products and services used by millions of 
consumers, such as overdraft protection, peer-to-peer payments, 
and buy now/pay later.
    These policies limit options for consumers at a time when 
they can least afford it and make it more challenging for 
financial institutions to innovate and compete.
    Coupled with reckless spending, Democrats' bad policymaking 
is devastating Americans' budgets. The price of gas is still 
higher today than it was a year ago, and it threatens to spike 
again this winter. Groceries are more expensive, up more than 
13 percent from this time last year.
    Biden's inflation continues to clobber American families. 
Last week's Consumer Price Index (CPI) numbers showed that 
prices continue to rise at 8.3 percent over the prior year and 
up over the month before. Everything costs more now, and low- 
to middle-income Americans are hurt the most.
    Add to all this the looming housing crisis in an 
inflationary and rising-interest-rate environment, and 
consumers are already having a harder time accessing affordable 
credit. Families are being priced out of the housing market 
because the Federal Reserve is forced to keep raising interest 
rates as Democrats continue to dump jet fuel on their economic 
dumpster fire. It is offensive to all of the senses.
    And if none of that bothers you, how about this? The Biden 
Administration is treating the U.S. Treasury like it is its own 
megabank, dolling out half-a-trillion in taxpayer dollars to 
repay student loans.
    And that economic concept is that the same folks who are 
paying for someone else's American Dream can no longer afford 
their own. You are taking from some and demanding that the 
populace, some of whom couldn't afford to go to college, pay 
for those who have debt that they shouldn't have taken on.
    We should focus on those issues. We should focus on the 
substance of how the American people live and seek to work. 
That should be the discussion today.
    We have an economy that is in an inflexion point. We should 
focus on that.
    We should talk about the regulatory challenges of giving 
consumers the options that they want and demand. That should be 
the focus of this hearing, if we are going to even have a 
hearing like this.
    And then, it should be about the substance of making 
people's lives better by reducing regulatory barriers that make 
products more expensive and make life harder for average 
Americans.
    My colleagues have instead called on large bank CEOs to 
publicly pressure them to promote divisive partisan priorities. 
We will hear a lot of that. In fact, you might hear it from 
both sides, by the way, where we are, a month before the 
election.
    Instead of focusing on what your institutions do best, 
providing capital and serving customers, you are here. It is a 
shame, it is theater, and it offers zero solutions to millions 
of Americans who are bearing the financial brunt of the 
Democrats' virtue signaling.
    I yield back.
    Chairwoman Waters. Thank you very much, Ranking Member 
McHenry.
    I now recognize the gentleman from Colorado, Mr. 
Perlmutter, who is also the Chair of our Subcommittee on 
Consumer Protection and Financial Institutions, for 1 minute.
    Mr. Perlmutter. Thank you, Madam Chairwoman.
    Good morning, and welcome to our committee.
    If there is anything that is built on trust, it is banking, 
and the banking sector lost a lot of trust in 2008. But with 
the passage of the Dodd-Frank Act, and disciplined and prudent 
operations, our banks are now well-capitalized. Banks have been 
a source of strength during the pandemic, and in many cases, 
have made progress in restoring consumer trust over the last 
decade.
    But it is not all sunshine and roses. This committee has 
heard reports of modern-day redlining, high and misleading 
fees, and unfair use of credit scores. According to the FDIC, 
one-third of unbanked households don't use banks because they 
don't trust them. Other consumers are turning to risky 
cryptocurrencies to avoid the system altogether.
    I hope today's hearing can be a productive dialogue on how 
to continue to instill trust in our banking system and to 
ensure that it works for everyone.
    With that, I yield back.
    Chairwoman Waters. Thank you very much, Mr. Perlmutter.
    I want to welcome today's distinguished witnesses to the 
committee: Andy Cecere, the chairman, president, and CEO of 
U.S. Bancorp; William Demchak, the chairman, president, and CEO 
of the PNC Financial Services Group; Jamie Dimon, the chairman 
and CEO of JPMorgan Chase & Company; Jane Fraser, the CEO of 
Citigroup; Brian Moynihan, the chairman and CEO of Bank of 
America; William Rogers, Jr., the chairman and CEO of Truist 
Financial Corporation; and Charles Scharf, the president and 
CEO of Wells Fargo and Company.
    Each of you will have 5 minutes to summarize your 
testimony. You should be able to see a timer on your screen 
that will indicate how much time you have left, and a chime 
will go off at the end of your time. I would ask you to be 
mindful of the timer and quickly wrap up your testimony if you 
hear the chime.
    And without objection, your written statements will be made 
a part of the record.
    Before we begin with your oral testimonies, I would like to 
swear in the witnesses.
    Would all of you please raise your right hands?
    Do you solemnly swear or affirm that the testimony you will 
give before this committee in the matters now under 
consideration will be the truth, the whole truth, and nothing 
but the truth, so help you God?
    Let the record show that all of the witnesses answered in 
the affirmative.
    We will now begin with your oral testimonies.
    Mr. Cecere, you are now recognized for 5 minutes to present 
your oral testimony.

 TESTIMONY OF ANDY CECERE, CHAIRMAN, PRESIDENT, AND CEO, U.S. 
                            BANCORP

    Mr. Cecere. Good morning, and thank you.
    Chairwoman Waters, Ranking Member McHenry, and 
distinguished members of the committee, thank you for inviting 
me to speak with you today.
    U.S. Bank is based in Minneapolis, Minnesota, and holds one 
of the longest active banking charters in the United States. We 
have spent nearly 160 years serving individuals, families, 
businesses, and communities, and striving to be a responsible 
and innovative leader in the financial services industry.
    At U.S. Bank, we operate a simple, straightforward company 
with four core businesses: consumer and business banking; 
corporate and commercial banking; payment services; and wealth 
management and investment services.
    We have earned a reputation for being well-managed, 
financially sound, and responsible in our approaches to 
underwriting and risk. Because of this, we have one of the 
highest debt ratings, and we have been recognized for 8 
consecutive years as one of the world's most ethical companies.
    These achievements are possible only because of our 
exceptional team members. We work hard to take care of their 
needs and invest in their career growth and development. This 
commitment has been further reflected in our newly-expanded 
leave benefits and our recently-announced increases in entry-
level pay.
    Thanks to our incredible team, we provide an exceptional 
banking experience for our customers. Our retail banking 
services are accessible when, where, and how our customers 
prefer, whether virtually or in person in one of our retail 
branches which we operate in 26 States.
    There are a few areas of our retail banking business that I 
want to highlight today.
    First, we have pioneered several digital enhancements. In 
addition to our award-winning mobile app, we created a tool for 
our bankers to co-browse remotely with their customers on 
video. This solution helps customers feel heard and understood 
when they need help making important financial transactions.
    Second, we have made it easier for individual customers and 
small businesses to access credit. I know that policymakers on 
this committee have been seeking a short-term, low-cost, small-
dollar solution for people who have emergency cash needs. Four 
years ago, we provided a solution for our customers. Our Simple 
Loan product allows customers to receive a loan of up to $1,000 
in a matter of minutes on our mobile app.
    We have similarly streamlined our services for small 
businesses. We now can process and fund a small business loan 
in less than 15 minutes.
    And thanks to our investments in new point-of-sale 
technologies, our small-business customers can more easily 
manage their money and serve their customers.
    Third, we are working to make homeownership a reality for 
more Americans both across rural communities and in our 
country's cities. One such initiative we have launched is 
Access Home, a program designed to increase Black homeownership 
by engaging with community partners. We continue to provide 
mortgage services to local housing finance authorities, as we 
did throughout the pandemic, and we are a leading FHA lender.
    Our commitment to serving the financial needs of Americans 
truly includes all Americans. We recognize that being a good 
corporate citizen goes beyond providing world-class financial 
services. In 2021, we developed our Access Commitment, a 
multidimensional initiative to work to close the racial wealth 
gap across communities.
    Fulfilling these commitments is important to me, and we 
have made substantial progress. Last year, we provided nearly 
$200 million in capital to Black-owned or -led businesses and 
organizations. We made $305 million in loan commitments to 
community development financial institutions (CDFIs), and we 
have made supplier diversity a priority and are spending nearly 
$500 million on these efforts annually.
    Still, we have pledged to do more. In addition to our 
commitment to closing the racial wealth gap, U.S. Bank is also 
committed to promoting diversity. The commitment starts with 
me, and I have seen firsthand the benefits of championing 
diversity at U.S. Bank. Diversity strengthens our business, 
attracts talent, and allows us to better serve our customers. 
Our efforts in this area were recognized earlier this year, 
when DiversityInc named U.S. Bank to the top 50 companies for 
diversity for the fourth year in a row.
    In closing, we believe relationships are a key 
differentiator for our bank. That is why we are taking the best 
of our person-to-person interactions and enhancing them with 
new digital capabilities to connect our customers with their 
trusted partners and advisers.
    Today, as always, our focus is on serving people. 
Relationships are the center of our business and the core of 
all of the communities we serve, and that commitment will never 
change.
    With that, thank you for your time and for the work you do 
for our country. I look forward to your questions.
    Thank you.
    [The prepared statement of Mr. Cecere can be found on page 
104 of the appendix.]
    Chairwoman Waters. Thank you very much, Mr. Cecere.
    Mr. Demchak, you are now recognized for 5 minutes to 
present your oral testimony.

TESTIMONY OF WILLIAM DEMCHAK, CHAIRMAN, PRESIDENT, AND CEO, THE 
               PNC FINANCIAL SERVICES GROUP, INC.

    Mr. Demchak. Thank you, Chairwoman Waters.
    And, Chairwoman Waters, Ranking Member McHenry, and 
distinguished members of the committee, I am pleased to be here 
on behalf of PNC Financial Services.
    PNC is a Main Street banking organization focused on 
traditional banking activities. We have essentially been in the 
same business for 170 years, which is when we were founded. Our 
priority has always been to help customers save, borrow, and 
move money.
    Now, we are a large bank by historical standards, but we 
are just one-sixth the size of some of the banks represented on 
this panel. We have limited capital markets activities, and 
limited derivatives and foreign operations.
    PNC is not a global systemically important bank (G-SIB). 
What we are is a financially strong and resilient bank that is 
committed to serving consumers in a fair and transparent way.
    I am proud that PNC was the first large bank to actually 
modify its overdraft practices. Since the rollout of our Low 
Cash Mode products, overdraft fees at PNC have dropped by 
nearly 50 percent.
    We have also made it easier for consumers to send and 
receive payments. PNC, along with the other owner-banks of 
Early Warning Services, developed and rolled out Zelle, a real-
time person-to-person (P2P) platform. Zelle provides consumers 
with a free and convenient way to send money to individuals and 
businesses.
    And despite the headlines, disputes within the Zelle 
network make up less than 10 basis points of all transactions. 
This is not true of unregulated P2P digital payment services, 
which in at least one instance, in PNC's case, has 13 times the 
disputes that we see on the Zelle Network.
    But better is not good enough, and the scams, in 
particular, continue to grow across the financial ecosystem. 
Scams are different than traditional fraud in that a bad actor 
gets a customer to actually initiate the transaction 
themselves. These scams are growing daily, and the industry, 
regulators, and, importantly, legislators, need to respond. It 
is not enough that we apportion blame after the fact. We need 
to stop fraud and scams before they occur.
    Secure networks like Zelle, Real Time Payments, and 
potentially, FedNow, allow for direct authentication with a 
host bank. They also allow members of the network to identify, 
close, and police against scam accounts.
    This is not the case with non-bank networks. These networks 
are not held to the same security standards as banks. When a 
scam occurs with these other networks, banks like PNC have zero 
visibility into where the money went, zero capability to 
recover the money, and zero capability to close the bad 
account.
    Banks follow the standards set under the Gramm-Leach-Bliley 
Act and are regularly, almost continuously, examined for 
compliance.
    Non-bank data aggregators are not subject to examination 
and supervision. Instead, they hold the financial data of tens 
of millions of U.S. consumers and rely on, ``screen scraping,'' 
to gather and then sell that consumer information.
    Twelve years ago, the Consumer Financial Protection Bureau 
(CFPB) was given authority, based on Section 1033 of the Dodd-
Frank Act, to end screen scraping, to secure data, and to stop 
the reselling of confidential consumer data through the fintech 
ecosystem. This hasn't happened and consumers are paying the 
price.
    PNC has had a social purpose since the day it was founded. 
As a service organization, we believe our success is directly 
tied to the success of our customers and communities. We 
succeed when our customers and communities thrive, and when our 
employees feel valued and are rewarded for helping to fulfill 
our purpose.
    Our commitment to our communities is reflected in PNC's 
outstanding rating under the Community Reinvestment Act (CRA)--
a rating, by the way, that we have enjoyed since the enactment 
40 years ago.
    We also succeed by being diverse and inclusive, which 
starts at the top of the organization. Today, nearly half of 
our independent directors on our board are women or people of 
color, and half of the executives who report to me are women or 
people of color.
    I am honored to represent the nearly 60,000 PNC employees 
who work hard every day to help our customers and deliver for 
our communities. It is a safe assumption that all of those 
constituents are as divided on the views of today's challenges 
as everyone else in our country.
    Our job as a bank--and my job as a leader--is not to 
arbitrate on who is right or wrong, but rather to find common 
ground and deliver on our promise to serve customers, keep them 
safe, and to provide capital to our great economy so that 
everyone may prosper.
    With that, I welcome any questions that you may have.
    [The prepared statement of Mr. Demchak can be found on page 
115 of the appendix.]
    Chairwoman Waters. Thank you, Mr. Demchak.
    Mr. Dimon, you are now recognized for 5 minutes to present 
your oral testimony.

 TESTIMONY OF JAMIE DIMON, CHAIRMAN AND CEO, JPMORGAN CHASE & 
                              CO.

    Mr. Dimon. Chairwoman Waters, Ranking Member McHenry, and 
members of the committee, I appreciate the opportunity to talk 
about JPMorgan Chase and the role of America's largest banks as 
a force for good for the country, its citizens, and the global 
economy.
    We live in the greatest country in the world, predicated on 
foundational beliefs in freedom of speech, freedom of religion, 
freedom of enterprise, the sanctity of the individual, and the 
promise of equality and opportunity for all. These core values 
are the fabric that binds us as Americans, where the best of 
what we are shines through, especially in times of adversity.
    This system has created what is still the most prosperous 
and innovative economy the world has ever seen and one that 
nurtures vibrant businesses, large and small, and is a 
welcoming environment for innovation, science, and technology. 
My enduring faith in the strength of the country remains as 
strong as ever.
    The free flow of credit and investments is key to our 
nation's global competitiveness. Free enterprise is the 
flywheel of the economy as capital seeks out investments, 
individuals, and ideas that drive growth and innovation.
    And free enterprise celebrates, and is inseparable from, 
human freedom and innovation, which ultimately are the stimulus 
for human progress. The secret sauce of free enterprise is not 
only the free movement of capital, but, more importantly, the 
value of knowledge and free people exercising their rights.
    What this country needs most is free enterprise, 
extraordinarily competent government and policies, and more 
civic-minded companies and citizens.
    The work we do at JPMorgan Chase matters in good times, but 
particularly more in tough times. We provide critical financing 
to nearly every sector, including manufacturing, service, 
energy, real estate, and transportation.
    Importantly, we finance Federal, State, and local 
governments, schools, bridges, hospitals, universities, and 
transit.
    We have long championed the essential role of banking in a 
community, its potential for bringing people together, for 
enabling companies and individuals to reach for their dreams, 
and for being a source of strength in difficult times. We 
finance Americans' ambitions with loans for homes, autos, and 
for growing small businesses, and we provide valuable products 
and services to more than half of American households.
    We know that our business is only as strong as our 
communities, so we are focused on lifting up traditionally-
underserved communities by increasing homeownership, expanding 
affordable rental housing, and growing small businesses.
    The last few volatile years have brought stress and 
disruption to so many as the world grapples with war in 
Ukraine, economic volatility and inflation, energy insecurity 
and climate change, and a pandemic.
    It has also shown what great companies with the size and 
scale of JPMorgan Chase can do as a source of strength to the 
economy. Because we have a strong and healthy company, we 
consistently serve and finance American households and 
businesses while building our communities and protecting 
America and the American economy.
    We are all here as guardians of the financial system. We 
support our government and national security efforts to combat 
financial crimes, and we carry out complex sanctions. Each year 
we proactively identify nation-state and cybercriminal threats 
and work closely with the financial services and energy 
industry and with the United States Government to help protect 
critical infrastructure.
    And we fuel good American jobs. The businesses we all 
finance collectively employ hundreds of millions of Americans, 
and as a large employer ourselves, we employ people in every 
State in the country with starting wages that far exceed any 
government minimum wage, plus full benefits, retirement, job 
training, and career growth opportunities.
    I want to close by thanking the more than 200,000 employees 
of JPMorgan Chase. I would like the public to know how proud I 
am of these people who work in every State in the country.
    You all work tirelessly for our customers with a singular 
focus on doing the right thing. You work on behalf of our 
shareholders, real people and communities, including teachers, 
law enforcement, healthcare workers, and people saving for 
retirement. Many of you have faced personal challenges 
throughout the pandemic, whether your own health or the health 
of a loved one, while managing your children's education and 
childcare needs.
    At the same time, our work has never been more important or 
more difficult than the last several years. You continue to 
persevere with grace and a fortitude that makes me proud.
    I have been particularly moved by our essential worker 
population, the tens of thousands of you who continued to come 
to work during the height of the pandemic to serve our 
customers when they needed you the most. You have my deep 
gratitude.
    And for all JPMorgan Chase employees who perform your jobs 
with integrity and excellence every day, you embody the best of 
American values and make your country proud.
    Thank you, members of the committee, for the work you do 
for our country. I look forward to working with all of you to 
help solve the challenges facing our country and to help grow 
and safeguard this great country.
    Thank you.
    [The prepared statement of Mr. Dimon can be found on page 
139 of the appendix.]
    Chairwoman Waters. Thank you, Mr. Dimon.
    Ms. Fraser, you are now recognized for 5 minutes to present 
your oral testimony.

            TESTIMONY OF JANE FRASER, CEO, CITIGROUP

    Ms. Fraser. Thank you very much indeed, Chairwoman Waters, 
Ranking Member McHenry, and members of the committee. Good 
morning, and thank you for the opportunity to represent 
Citigroup today.
    When a similar group convened with this committee last 
year, we shared how our bank supported the economy during the 
global pandemic.
    Today, while the worst of COVID may be behind us, the 
economic challenges we are facing are no less daunting. The 
reforms you put in place, and the work we have done since the 
financial crisis to strengthen our bank's financial foundation, 
have enabled us to continue to serve as a source of stability.
    While today I am a proud American citizen, as someone who 
grew up in the U.K., I can attest that the banking system and 
the capital markets in the States are the envy of others. Our 
financial institutions and our financial markets are essential 
to American competitiveness abroad, and they are the reason why 
the U.S. is the top destination for foreign investment.
    As living expenses for Americans increase and concerns 
about the economy grow, we remain very focused on our role as a 
bank in job and in wealth creation. Through Citi's extensive 
global network and footprint, we partner with the most iconic 
American businesses, as well as the Federal Government, to help 
them navigate the global economy. We have been supporting our 
clients as they build resiliency, reconfigure supply chains, 
and adapt to inflationary pressures, and we help these 
institutions invest in projects that put them in a position to 
succeed in the 21st Century.
    And it is these investments that put a lot of people to 
work in the United States. The private sector clients we serve 
are where millions of Americans proudly earn their living, and 
those clients rely on vendors and suppliers, which in turn 
employ millions here at home. At Citi, we employ 70,000 people 
here in the U.S., working in cities across the country such as 
Jacksonville, St. Louis, and Los Angeles.
    The work we do with our public sector partners is a prime 
example of how we put our balance sheet to work to benefit 
local communities. In 2021, we partnered with State and local 
governments to catalyze more than $27 billion in infrastructure 
investment, such as schools, hospitals, and roads, and many of 
these large projects just wouldn't have been possible without a 
bank of Citi's scale to back them.
    We financed more than $5.6 billion in affordable housing 
projects last year in communities across 32 different States, 
from California to Ohio to New York, and this total made us the 
number-one affordable housing lender in the U.S. for the 12th 
year in a row.
    Breaking down the barriers to banking is also a top 
priority for us. In fact, this past summer we became the first 
of the largest U.S. banks to completely eliminate overdraft 
fees and returned item fees for our customers.
    We have also been a leading proponent of pay equity. 
Earlier this year, we launched a first-of-its-kind diverse 
financial institutions group to lead our engagement with 
minority depository institutions (MDIs) and diverse broker-
dealers and asset managers.
    And this group has focused on helping these diverse 
institutions scale and expand into new markets, and it includes 
a groundbreaking rotational program that embeds Citi executives 
within MDIs for up to a year.
    Bottom line, my Citi colleagues and I understand and 
embrace the responsibilities that banks have for advancing 
economic empowerment and mobility.
    I hope my pride in Citi's story has come through, but I 
also want to be clear about recognizing the need to continue 
improving as we strive to build an even safer and sounder bank 
for the future.
    Thank you for the opportunity to speak with you about the 
work we are doing to support American consumers and businesses, 
and I look forward to your questions later on today.
    Thank you very much.
    [The prepared statement of Ms. Fraser can be found on page 
153 of the appendix.]
    Chairwoman Waters. Thank you very much, Ms. Fraser.
    Mr. Moynihan, you are now recognized for 5 minutes to 
present your oral testimony.

 TESTIMONY OF BRIAN MOYNIHAN, CHAIRMAN AND CEO, BANK OF AMERICA

    Mr. Moynihan. Thank you, Chairwoman Waters, Ranking Member 
McHenry, and distinguished members of the committee. Good 
morning to all of you.
    It is an honor to be here to represent my 210,000-plus 
teammates at Bank of America and to talk to you about how we 
deliver responsible growth. This is how we run our company, and 
it is the same thing I told you last year and the year before, 
and every time we have done these hearings: We deliver for our 
clients, for our teammates, for our communities, and for our 
shareholders. We believe in delivering both profits and 
purpose.
    That includes being a great place to work, which is a core 
tenet of responsible growth. We invest heavily in our teammates 
and their families. This year, we raised our U.S. minimum 
hourly wage to $22, and are on track to increasing it to $25 by 
2025.
    We also made an across-the-board pay adjustment for all of 
our U.S. employees mid-year, in the late spring, who earn under 
$100,000, to increase their wages by 3 to 7 percent based on 
years of service. This is above and beyond any B of A pay 
review cycle.
    For the fifth time this year, we delivered special 
compensation awards to our teammates, this year $1 billion over 
and above other compensation, to 97 percent of our employees. 
We again did not raise medical premiums for teammates who earn 
under $50,000, the 12th year in a row we have done that.
    Our global workforce is 50 percent women, and 49 percent of 
our U.S. teammates are people of color. Our management team is 
55 percent diverse, including 32 percent women. Our board is 53 
percent diverse, including 33 percent women.
    We also continue to help our clients manage their financial 
lives. Over the past year alone, our lending to individuals and 
families grew by 9 percent and our loans to small businesses 
grew by 8 percent. We are the top small-business lender, with 
$22 billion in outstanding small business loans today.
    Our brand in customer scores are in the best sustained 
shape we have ever seen. We support our clients with a trillion 
dollars in loans to help them with their financial lives. We 
hold $1.9 trillion of their deposits to help them also. Ninety-
five percent of our Paycheck Protection Program (PPP) loans 
have been paid off or forgiven. We continue to expand our 
nationwide network of financial centers and our industry-
leading and award-winning digital capabilities.
    Through both, we deliver transparent, easy-to-use products 
and services to help our clients save, spend, and borrow. As an 
example, beginning in 2009, we began to take steps to empower 
our clients to reduce overdraft usage. We first eliminated 
overdraft fees for clients when using debit cards at point of 
sale and have not allowed opt-in for a dozen years.
    We also have created no-overdraft-fee accounts, now over 4 
million in our client base. We have since eliminated fees for 
nonsufficient funds in our consumer deposit accounts. We have 
reduced overdraft fees from $35 to $10 per occurrence. And we 
removed the ability to overdraft at an ATM. You can see that in 
the second quarter call reports which show that our 
nonsufficient funds and overdraft fees are down 66 percent from 
last year's second quarter.
    Now, responsible growth also shows how we make an impact in 
communities where we live and work. In 2021, we continued our 
long record with $375 million in charitable giving. Our 
teammates reported 1.6 million volunteer hours during the year.
    We also continue to be a lender and to support our small 
businesses and entrepreneurs in our communities. We provide 
more than $2 billion to CDFIs to finance affordable housing, 
community facilities, and small businesses. We have invested in 
the common equity of dozens of minority depository institutions 
and have $100 million-plus in deposits with those institutions.
    We have also committed, in a unique program, $350 million 
to over 100 private equity funds that are run by women and 
minority entrepreneurs as private equity partners and invest in 
companies with like owners.
    Responsible growth requires us to work with clients of 
every size and every sector to support a just transition to a 
sustainable future and energy security for the United States 
and around the world. We believe that capitalism remains the 
best way to tackle the big challenges facing society.
    We all face a transition to a secure energy environment. 
The private sector has the funding, the scale, and the long-
term thinking to help with the toughest issues, including 
those.
    In 2021, we had $250 billion in loans and other support to 
clients in the area of sustainable finance. This includes more 
than $150 billion focused on a clean energy transition.
    We work with all companies in the energy sectors, oil and 
gas clients, who are also investing to help drive clean energy 
solutions.
    Responsible growth also means delivering for our 
shareholders. We deliver strong profitability and returned 
billions of dollars to shareholders in dividends and stock 
repurchases. But our balance sheet, capital, and liquidity are 
the strongest in our company's history.
    This is responsible growth. This is capitalism in action.
    Thank you, and we look forward to your questions.
    [The prepared statement of Mr. Moynihan can be found on 
page 166 of the appendix.]
    Chairwoman Waters. Thank you, Mr. Moynihan.
    Mr. Rogers, you are now recognized for 5 minutes to present 
your oral testimony.

 TESTIMONY OF WILLIAM H. ROGERS, JR., CHAIRMAN AND CEO, TRUIST 
                     FINANCIAL CORPORATION

    Mr. Rogers. Chairwoman Waters, Ranking Member McHenry, and 
members of the committee, good morning. I am Bill Rogers, the 
chairman and CEO of Truist. I am extremely proud to be here on 
behalf of Truist's 50,000 purpose-driven teammates. Thank you 
for this opportunity to testify today.
    Truist is a purpose-driven company, and that purpose is to 
inspire and build better lives and communities. This drives our 
mission for our teammates, our clients, and the many 
communities and stakeholders that we serve.
    For teammates, our mission is to create an inclusive and 
energizing environment that empowers teammates to learn, grow, 
and have meaningful careers. Truist's minimum starting pay of 
$22-per-hour is among the highest in the industry.
    Our career development programs provide a pathway to 
professional growth. They include offerings at the Truist 
Leadership Institute, as well as tuition reimbursement for 
education that supports career advancement. We have also 
accelerated career development for Truist leaders from diverse 
backgrounds, which has helped us meet our goal of 15 percent 
diverse representation in leadership roles a year ahead of our 
original target date.
    To help ensure our teammates' financial security extends 
into retirement, we offer eligible teammates both a defined 
benefit pension plan and a 401(k) match at perhaps the highest 
level in the industry.
    For our clients, our mission is to provide distinctive, 
secure, and successful client experiences through our 
technology-plus-touch-equals-strategy. We recently launched 
Truist One Banking, which includes two new deposit accounts 
with no overdraft fees, as well as other features to accelerate 
our clients' journey towards financial well-being.
    Today, 87 percent of our client interactions occur 
digitally. We are evolving our products and services to help 
ensure we continue to offer a best-in-class client experience 
that is intuitive, efficient, and secure.
    Client security is a Truist priority, and my written 
testimony outlines actions we are taking to protect our 
clients. We welcome opportunities to work more closely with law 
enforcement and policymakers at every level to help protect our 
banking system from organized and sophisticated criminal 
attacks.
    Even when most client interactions occur digitally, 
exceptional client service often requires the personal touch 
that our Truist teammates provide. Personal touch made the 
difference for many of our clients navigating the PPP process. 
At the outset of the pandemic, and in the middle of our merger, 
thousands of our teammates worked directly with their business 
clients to meet their fast-changing financial needs.
    I am extremely proud and appreciative of the client letters 
we received thanking our teammates for their help in securing 
PPP loans that kept small businesses open and employees 
employed.
    For the many other stakeholders we serve, our mission is to 
optimize long-term value through safe, sound, and ethical 
practices. Truist is a Main Street bank, and teammates serve 
our clients at more than 2,000 branches in 17 States and 
Washington, D.C. We are committed to being a good neighbor and 
contributing back to the communities where we do business.
    In 2019, we committed to a $60-billion community benefits 
plan, which included mortgage lending for low- and middle-
income borrowers, commitments to small businesses and community 
development lenders, community development grants, as well as 
the establishment of 15 new branches in low- and moderate-
income (LMI) communities.
    I am pleased to report that through August of 2022, we 
estimate that our combined lending, investing, and 
philanthropic financing activities already exceeded the $60-
billion mark, and that we will open 16 new branches in LMI or 
majority-minority communities by the end of this year.
    In addition, Truist has been a strong supporter of MDIs and 
CDFIs.
    In 2022, a $40-million Truist donation helped establish 
CornerSquare, a new nonprofit that provides capital to 
racially- and ethnically-diverse small-business owners.
    In 2021, Truist committed $50 million to serve as an anchor 
investor, along with Microsoft, on FDIC's mission-driven 
Institution Investment Fund.
    And in June, Truist committed an additional $120 million to 
strengthen and support small businesses, with a focus on Black, 
Latine, and women-owned businesses.
    I am inspired by the opportunity to lead this purpose-
driven company and to serve our clients and our teammates and 
our communities.
    Thank you for this opportunity to share our purpose journey 
with you, and I look forward to your questions today.
    [The prepared statement of Mr. Rogers can be found on page 
191 of the appendix.]
    Chairwoman Waters. Thank you, Mr. Rogers.
    And Mr. Scharf, you are now recognized for 5 minutes to 
present your oral testimony.

TESTIMONY OF CHARLES W. SCHARF, PRESIDENT AND CEO, WELLS FARGO 
                          AND COMPANY

    Mr. Scharf. Chairwoman Waters, Ranking Member McHenry, and 
members of the committee, good morning, and thank you for the 
opportunity to be here today.
    Since October of 2019, I have had the privilege of leading 
Wells Fargo. As I reflect on my time at the company, I am 
incredibly proud of how we have used our strength during 
difficult times to support our customers, employees, and the 
communities we serve while we have worked to transform the 
company at the same time.
    I believe that our nation benefits from a strong Wells 
Fargo, and that has never been more true than today.
    The last time I appeared before this committee the country 
was in the middle of a pandemic, and my testimony and many of 
your questions were focused on what banks were doing to support 
the communities in which we operate. Those were important 
questions then, and they are equally important today given the 
complexity of today's high inflationary environment.
    Since 2020, Wells has provided billions of dollars in 
emergency lending to America's small businesses, and we have 
donated approximately $420 million in fees from that lending to 
small business owners who struggled during the pandemic through 
our Open for Business Fund. These funds are estimated to have 
reached more than 150,000 business owners nationally and have 
preserved approximately 250,000 jobs.
    Last year alone, we helped more than half-a-million 
homeowners with new, low-rate loans to purchase a home or 
refinance an existing mortgage, and we closed billions of 
dollars in new commitments in affordable housing.
    Between 2017 and 2021, we increased average wages for our 
U.S. hourly employees by nearly 25 percent, and increased 
investments in our U.S. employee benefits by over 20 percent. 
And we launched a unique Special Purpose Credit Program, 
committing $150 million to help eligible Black homeowners lower 
their interest rates and reduce their monthly payments.
    In addition, we issued a second sustainability bond in the 
amount of $2 billion that will finance projects and programs 
supporting housing affordability, economic opportunity, 
renewable energy, and clean transportation.
    Our work is bolstered by our Banking Inclusion Initiative, 
a 10-year program to help unbanked individuals gain access to 
affordable, mainstream, digitally-enabled accounts.
    Although our work is not complete, Wells Fargo approaches 
issues differently and is a better company than when I arrived. 
We have driven a tremendous amount of change and established a 
much stronger foundation for the long term, with a clear sense 
of urgency on building our risk and control infrastructure.
    We have changed our operating structure, simplified our 
business, and have a new leadership team in place with the 
necessary skills and experience to transform Wells Fargo.
    Almost 70 percent of our company's Operating Committee is 
new to the company since I joined. Additionally, well over half 
of the senior-most people, meaning those who are one level 
below the Operating Committee, are new to their roles. We have 
also meaningfully improved diversity in our senior ranks.
    Additionally, last week we announced that we will 
commission an external third-party racial equity audit. The 
assessment will focus on elements of Wells Fargo's efforts to 
serve diverse communities and promote a diverse workforce. 
Commissioning this work is a critical next step in reinforcing 
our commitment to racial equity and helping close the wealth 
gap in this country.
    Looking forward, I recognize that the country may be facing 
uncertain economic times for months to come. I can assure you 
that Wells Fargo Bank is keeping a close eye on consumer 
spending and credit trends, and we will continue to be a 
constructive partner in forging an inclusive recovery.
    We recognize that COVID-19 has left many people still in 
need and the current inflationary environment has added stress. 
As a company, we will continue to provide support to our 
customers, employees, and communities over the long term.
    In conclusion, I want to express my sincere gratitude to 
everyone at Wells Fargo who has continued to serve our 
customers, each other, and our communities through these 
challenging times. I appreciate their dedication and resiliency 
as we have worked to make Wells Fargo better.
    While we still have much more to do, our foundation is 
stronger, our business is more focused, we are driving cultural 
changes, and the changes we have made to the company are having 
a positive impact. I am confident that we have the management 
team in place to complete the work ahead.
    Thank you. I welcome your questions.
    [The prepared statement of Mr. Scharf can be found on page 
226 of the appendix.]
    Chairwoman Waters. Thank you very much, Mr. Scharf.
    I now recognize myself for 5 minutes for questions.
    Mr. Scharf, I recognize that you have only been the CEO for 
a little less than 3 years, and I remember the commitments that 
you have made, and I am listening to what you consider has been 
your progress since you have been there. Your commitment was to 
clean up the culture of corruption that existed in Wells Fargo.
    Since you last testified, the Office of the Comptroller of 
the Currency (OCC) fined your bank $250 million for violating a 
previous consent order regarding risk management and for 
engaging in unsafe and unsound practices related to serious 
deficiencies in your home lending loss mitigation program.
    In May 2022, The New York Times reported that current and 
former employees of Wells Fargo described hiring practices that 
led to fake job interviews so that internal diversity goals 
could be achieved.
    A 2021 report by the Committee for Better Banks found that 
Wells Fargo failed to sufficiently disclose employment 
diversity data, making it impossible to examine advancement 
opportunities for workers of color.
    One Wells Fargo employee, who is a call center worker in 
San Antonio, Texas, responded to the last report, saying, ``It 
is extremely deflating to be a person of color at Wells Fargo. 
In the past couple of years, I have watched a handful of Black 
managers at Wells Fargo get fired or leave.''
    Mr. Scharf, I know the bank has made various commitments to 
address the racial wealth gap, and you have finally agreed to 
do a racial equity audit.
    I also appreciate that Wells Fargo is one of the few banks 
that has maintained a presence in the Caribbean as a 
correspondent bank, while, of course, we had Citi who responded 
to us when we were in Barbados that they had closed their 
correspondent banking operations. So, I do appreciate it. But 
it is not at all clear that you are doing enough to finally 
break the pattern of repeat offenses.
    To take another example, a Bloomberg investigation found 
that Wells Fargo approved fewer than half of Black homeowners 
who applied for mortgage refinancing in 2020, the worst Black 
approval rate compared to other major lenders.
    I know you will point to things like FICO scores, and 
requirements of the Government-Sponsored Enterprises (GSEs), 
but this doesn't fully explain why your bank was comparatively 
worse in this market compared to other major lenders.
    When you look at this track record, and when you hear 
feedback like that from your own employees, what is your 
assessment of your performance since you last testified before 
us? You gave us some indication, but would you respond to the 
fines and the criticisms at this point?
    Mr. Scharf. Madam Chairwoman, first of all, thank you for 
the opportunity to address those things.
    I was brought in to bring about substantial change at Wells 
Fargo, and we have made tremendous changes.
    I have also been very clear since the day I arrived, 
including when I testified in front of this committee in March 
of 2020, that it was going to take multiple years to make all 
of the changes that were necessary so that the company was run 
in a way that I would be proud of, our regulators would be 
proud of, and you would be proud of.
    We have closed four consent orders since I have been there. 
We have returned our CRA rating to, ``Outstanding.'' We have 
plans in place for all of the remediation work that has to take 
place. And I firmly believe that we are making progress across 
that body of work.
    And as I said in my remarks, I am very confident that we 
have the team in place, but that we also have the processes, 
the discipline, and the sense of urgency to get done what is 
needed.
    Chairwoman Waters. If I may interrupt you, will you respond 
to the accusation of fake interviews? What does that mean to 
you? And I think you have heard this criticism.
    Mr. Scharf. Nobody should go through an interview without 
the belief that they could have a reasonable shot at getting 
that job. We firmly believe that having a policy in place that 
requires diverse candidates helps us attract the best 
candidate. We believe that with the policies we put in place, 
that is happening, and that is the reason why our diverse 
hiring is up substantially since we put these policies in 
place.
    And to the extent that anyone feels as if they have not 
been treated properly, that is something that is on our 
management team to ensure doesn't happen.
    Chairwoman Waters. Is it true that you interviewed an 
African-American employee for a position after you had already 
hired a White employee? Is that true?
    Mr. Scharf. We are in the middle of continuing an 
investigation to make sure that we understand every instance 
where people felt as if they were not treated fairly, and if we 
have findings, we will take appropriate action.
    Chairwoman Waters. Thank you very much.
    At this point in time, I will call on the gentleman from 
North Carolina, Mr. McHenry, who is the ranking member of the 
committee.
    You are now recognized for 5 minutes, Mr. McHenry.
    Mr. McHenry. Thank you for your testimony.
    Let's talk about the main thing. The main thing here is the 
economy, the state of the economy. We see a changing rate 
environment that has a severe impact on financial institutions 
and families. We see it first for the housing market, with 7 
months of receding home sales, in a time where we need more 
housing units in America. We see inflation eroding families' 
budgets on a weekly, and monthly basis, made worse by policies 
out of Washington.
    Let's talk about inflation. I want to know the impact, as 
you see it.
    Ms. Fraser, you have a global footprint. You are in 
jurisdictions that have rampant, persistent inflation, where 
there is huge pressure placed on consumers and businesses in 
that environment. What are the economic consequences and 
challenges of a high-inflation environment?
    Ms. Fraser. Thank you very much for the question, 
Congressman.
    We are very concerned about the high prices that consumers 
are facing in America and indeed around the world. We certainly 
have lived through very unusual times, through the pandemic, 
through the recovery from that, and thenz, the impact was 
greatly exacerbated by the war in Ukraine.
    The impact of the higher rates that are required to try and 
tame the inflation is likely to be moderating growth in America 
and around the world and will be putting pressure on many of 
the drivers of the recovery that we have been looking for.
    Mr. McHenry. You have this backdrop of the economy, and all 
of you are making decisions for your institutions.
    In our economic system in America, banks are a key piece of 
our economic system, and the multiplier effect that you all 
provide and the lending and the risk that you take in our 
economy.
    Let's talk about regulatory capital and what that would do.
    Truist. In the regional banks are--we have heard from 
Federal bank regulators about additional long-term debt 
requirements potentially placed on institutions like yours.
    Mr. Rogers, what effect would that new layer of capital 
requirement have on an institution like yours and your 
customers?
    Mr. Rogers. Ranking Member McHenry, thank you for that 
question.
    First and foremost, we think that regulation ought to be 
tailored and follow the risk of individual institutions, and I 
think that is consistent with the philosophy that we all 
support.
    Additional capital at a higher cost caused us to actually 
potentially impair lending or slow down our lending. It may 
cause us to do other things from a competitive standpoint to 
cover the costs of additional capital.
    Mr. McHenry. Is that what U.S. Bank thinks, Mr. Cecere?
    Mr. Cecere. Thank you.
    We continue to have a very simple business model, and 
although we are larger than we were a few years ago, the 
businesses that we are in are substantially the same. Our 
capital levels since 2007 are actually 3 times what they were 
at that time. So, we believe we have a very strong capital 
rating, which is reflected in our high debt rating. Additional 
capital will increase the cost of debt.
    Mr. McHenry. Mr. Dimon, you spoke yesterday about 
additional requirements for regulatory capital and liquidity 
standards and the impact it would have on the marketplace. Will 
you speak to that?
    Mr. Dimon. Yes, sir.
    To give credit where credit is due, Dodd-Frank accomplished 
a lot of what needed to be accomplished. Lehman Brothers would 
not happen again. I think the regulators should take a victory 
lap for that.
    Having said that, as often happens, things went a little 
bit too far. It is not just capital; liquidity requirements, 
international requirements, Basel requirements, et cetera, do 
restrict lending, raise the cost of lending, damage markets a 
little bit, and reduce mortgage lending on the part of some of 
our banks.
    We want good regulations. But I think we need to spend a 
little more time recalibrating the effect of these regulations 
across the whole financial system.
    Mr. McHenry. So, there is a cost to this, and there is an 
economic cost, and it changes behavior at the institution, 
which means you don't lend as aggressively on the margins?
    Mr. Dimon. Yes. And unfortunately, some of that is going to 
happen when things get worse. So, JPMorgan will be sitting with 
a trillion dollars, unable to deploy it to help our clients to 
meet intermediate markets at precisely the wrong time.
    You all saw Treasury markets, and other markets get very 
rattled in March 2020, going back to 2019, and part of the 
reason was the inability of very well-capitalized, very liquid 
banks to do what they really should be doing.
    Mr. McHenry. Which means you can't provide liquidity in the 
system at end of quarter, end of year, and so we are going to 
have choppier markets as a result of regulatory policies that 
impair your ability to make markets.
    Is that how you see it, Mr. Moynihan, with Bank of America?
    Mr. Moynihan. There is no question that increasing capital 
for us 1 percent makes us not be able to lend $160 billion of 
loans into the economy. It is that straightforward. It is a 
simple calculation.
    Mr. McHenry. So, there is an economic cost to regulatory 
capital requirements that is beyond economic historic needs for 
your institutions.
    Thank you for your testimony.
    Chairwoman Waters. Thank you very much.
    The gentlewoman from New York, Mrs. Maloney, who is also 
the Chair of the House Committee on Oversight and Reform, is 
now recognized for 5 minutes.
    Mrs. Maloney. Thank you so much, Chairwoman Waters, for 
calling this important hearing.
    And to our panelists, I thank all of you for your comments, 
particularly those who talked about wanting to reduce the 
overdraft fees that drain billions of dollars from America's 
poor and working-class communities every year.
    The Consumer Financial Protection Bureau (CFPB) has found 
that overdraft fees cost our consumers over $15 billion in 2019 
alone, and these fees disproportionately target and penalize 
low-income consumers. They found that almost 80 percent of 
overdraft and nonsufficient fund fees are borne by only 9 
percent of consumers, and they are all financially vulnerable.
    While I am glad to see some banks have taken some 
initiative by eliminating or moving in that direction, it is 
concerning to me that it has taken this long and that many 
banks still have yet to make any voluntary changes.
    And with banks enacting different policies, consumers are 
left with little consistency. They are very confused by these 
different policies.
    We must ensure that we have a comprehensive permanent 
solution and act to protect consumers, and that is why I have 
introduced the Overdraft Protection Act, which has been 
reported out of the committee. It builds on the Credit Card 
Bill of Rights which passed in 2009 and, according to the CFPB, 
has saved consumers over $16 billion a year by just keeping 
fees in their pockets, in the consumers' pockets.
    I want to ask Bank of America and Citibank, because in your 
testimony you talked about your actions to eliminate fees, can 
you elaborate on what product offerings you have changed to 
reduce or eliminate the overdraft fees? And can you speak to 
how your consumer banking division has remained profitable in 
light of all of these changes?
    First, Mr. Moynihan, and then, Ms. Fraser.
    Mr. Moynihan. I think you heard many of my colleagues talk 
about this, and this is a product in the industry. The first is 
a no-overdraft product, especially for students and younger 
people. We have formulated those, and I think if you total it 
up, across-the-board, that product allows people to have no 
overdraft capacity.
    Then, you have the other products for people to opt into. 
And what we've done is reduced our overdraft per-occurrence fee 
from $35 to $10. We've reduced the no-ability-to-have-the-NSF-
type-fees, the numbers of occurrences.
    All of that totals up that we're down 60 percent second 
quarter, last year's second quarter. This year, it'll fall 
further because a lot of those changes took place. And we 
recently announced that it's down 90 percent.
    But we're able to do that because of the scale and 
capabilities of our team in consumer banking. And these larger 
banks--a variety of banks participate in our system; there's a 
variety of business models. But one of the things that will be 
consistent is the scale we've been able to achieve. And our 
company and these companies at this table have allowed us to 
pass through those benefits to the consumers and still remain 
profitable.
    Mrs. Maloney. Thank you.
    Ms. Fraser?
    Ms. Fraser. Thank you very much, Representative. It's 
lovely to see you.
    At Citi, we are proud to have eliminated overdraft fees and 
NSF. This was the right decision for our bank and is reflective 
of a multiyear commitment to having a customer-friendly 
approach to fees.
    Similar to my colleague, Mr. Moynihan, we also have a 
product, called the Access product. It accounts for almost 20 
percent of all of our accounts. In addition to the no-
overdraft, it also is a very low-cost, customer-friendly 
account that has grown substantially over the last few years 
and played a very important role during the pandemic for those 
who were most affected. It's something that we're committed to 
continuing to grow.
    Thank you.
    Mrs. Maloney. Are there any other banks that can commit to 
eliminating overdraft fees altogether by 2025? Anyone else on 
the panel who can follow the leadership of these two banks?
    Then, I'd like to move to the interest rates that are 
rising and causing problems or challenges with the housing 
market and making it harder for first-time homebuyers to be 
able to take out mortgages.
    Again, I'd like to ask both Bank of America and Citibank 
what you have done. Do you have any programs or ideas of how we 
can help facilitate homeownership, even with the challenges of 
increased interest rates? Would moving the 30-year mortgage to 
sort of a 50-year mortgage to lower the interest-rate payments 
per month--would that help?
    I welcome any ideas that you may have. And after them, 
anyone else's ideas are also welcome. First Mr. Moynihan, then 
Ms. Fraser.
    Mr. Moynihan. I think we have programs that provide down 
payment assistance and grants for that if you get HUD 
counseling. We have programs to develop housing in our 
community development program. We do $6 billion a year in low-
income housing development and other types of housing 
development.
    It's a multifaceted thing, but I think at the end of the 
day, the amount of adjustment will go on as rates adjust, as 
intended, to attack the inflation, and it will take a period of 
time for that to sort through.
    Chairwoman Waters. Thank you.
    The gentlewoman's time has expired.
    Mrs. Maloney. Thank you. I yield back.
    Chairwoman Waters. The gentlewoman from Missouri, Mrs. 
Wagner, is now recognized for 5 minutes.
    Mrs. Wagner. Thank you, Madam Chairwoman.
    I'd first like to note that this is our third time hearing 
from these witnesses, the second time this Congress, and the 
Majority is likely to make the same assertions that they did 
last time to name-and-shame just to try and score political 
points.
    Meanwhile, we have an SEC Chair moving at breakneck speed 
to propose an historic number of rules--more than the SEC 
proposed even after the 2008 financial crisis. Yet, this 
committee refuses--refuses--to conduct any oversight. Why is 
the Majority unable or unwilling to bring in SEC Chair Gensler? 
The Senate Banking Committee didn't seem to have a problem 
getting him to testify.
    Inflation has outpaced workers' wages for 17 months in a 
row under President Biden's watch, and America's workforce is 
paying the price. The majority of U.S. workers' income has 
fallen behind rising costs. Everyday items, across-the-board, 
keep rising in price. The cost of eggs is up 40 percent; 
chicken, 25 percent; bread, 16 percent.
    Instead of addressing this 40-year-high inflation crisis, 
President Biden and the House Democrats spent last week 
celebrating their reckless spending and failed agenda, which 
ironically coincided with the stock market crashing and erasing 
retirement savings for millions of hardworking Americans.
    The very same day, the Consumer Price Index numbers jumped 
to 8.3 percent over last year, and the White House celebrated 
with James Taylor singing, ``Fire and Rain.'' Let me tell you 
what, the only fire that's raining down on my constituents in 
Missouri's Second Congressional District is the cost of putting 
food on their table, putting gas in their tanks, and paying 
their utilities. One in every six Americans, over 20 million of 
them, are in arrears on their utility bills, and we haven't 
even hit winter yet.
    Why aren't we having hearings to address the drivers of 
inflation: the effect that the $5 trillion in Democrat 
government spending over the last year-and-a-half has had; the 
lack of our energy independence; or perhaps the overregulatory 
burden of President Biden's administrative state that, 
honestly, adversely affects small community banks even more 
harshly than those before us today?
    The recent Consumer Price Index numbers show that inflation 
is not going away any time in the near future. Everything costs 
more now. And low- to middle-income Americans are hurt the 
most.
    Mr. Cecere, and Ms. Fraser, in your opinion--I know that 
the ranking member touched on some of the implications of 
sustained inflation, particularly on consumers' credit and the 
economy. But in terms of the level of savings and credit card 
debt, what are you seeing on the ground, from your customers, 
your clients?
    Mr. Cecere?
    Mr. Cecere. Thank you, Representative. You are correct that 
inflation is impacting those who can afford it the least.
    While consumers' spend levels in total are about 10 percent 
above last year, the things that people are spending money on 
have changed substantially from discretionary to 
nondiscretionary items like food and gas, as you mentioned.
    And I think it's appropriate that we're very focused on 
inflation, because, again, it is most harmful for those who can 
afford it the least.
    Mrs. Wagner. And are you seeing, in fact, credit card debt 
go up and savings go down?
    Mr. Cecere. Savings levels continue to be above pre-
pandemic levels across all stratas of deposit levels, from 2 to 
4 times. However, they're stabilized, where for 18 months they 
were growing each and every month, and they've stabilized in 
the last 3 months.
    Credit card spend rates continue to be high, and payment 
rates are actually starting to normalize, but are still well 
above pre-pandemic levels.
    Mrs. Wagner. Thank you.
    Ms. Fraser, please?
    Ms. Fraser. Thank you very much.
    I would say that it's early days still, in terms of seeing 
the impact of high interest rates on the consumer in the 
States. Fortunately, they entered this period with pretty 
strong balance sheets, but we would anticipate that if interest 
rates remain high in order to tame inflation, we will see 
greater stress, particularly in lower FICO scores, in credit, 
and that we will also see the savings rates coming down further 
than we have done.
    I think we're fortunate to have had the consumer in good 
health entering into this, but we do expect we're going to be 
in for tougher times ahead.
    Mrs. Wagner. Thank you. I've run out of time.
    And I yield back.
    Chairwoman Waters. Thank you very much.
    The gentleman from California, Mr. Sherman, who is also the 
Chair of our Subcommittee on Investor Protection, 
Entrepreneurship, and Capital Markets, is now recognized for 5 
minutes. He's also an accountant who understands that inflation 
is a worldwide phenomenon.
    Mr. Sherman. Thank you.
    For the 2\1/2\ decades I've been on this committee, we've 
brought the SEC forward to push them because they weren't 
writing the regulations that the law required them to write. 
And I want to commend the SEC for beginning to deal with that 
backlog. I don't criticize them for working too hard.
    The Inflation Reduction Act reduced the Federal deficit by 
$300 billion, partially ameliorating the inflationary effect of 
the Trump tax cut, which added $2 trillion to our deficit by 
cutting taxes for the wealthy and large corporations. And, of 
course, the Inflation Reduction Act provides tax cuts designed 
to reduce global warming.
    I have a lot of questions. We have a lot of witnesses, so 
my questions are designed to be yes-or-no questions.
    ESG investing is for those who want to contribute to 
society and to any improvement of the environment, which is 
kind of the exact opposite of giving money to Vladimir Putin.
    Mr. Dimon, back in March, Politico reported that you were 
going to mull over the possibility of removing Russia from your 
ESG fund suite. Has JPMorgan removed Russia from its ESG fund 
suite?
    Mr. Dimon. Probably.
    Mr. Sherman. Can you get back to us with a definitive 
answer on that, Mr. Dimon?
    Mr. Dimon. I would be happy to do that.
    Mr. Sherman. We clearly have sanctions on Russia and 
Belarus. There is a loophole in those sanctions that we don't 
have in Iran or North Korea sanctions, which is that the 
subsidiaries of U.S. corporations are not legally-bound. My 
hope is that the institutions here wouldn't be exploiting that 
loophole.
    This House of Representatives in May passed my bill, the 
Russia and Belarus Financial Sanctions Act, which would block 
that loophole. Unfortunately, the Senate remains somewhat 
dysfunctional.
    The question is, are you going to exploit that loophole? 
But I'll be more specific.
    Mr. Dimon, has JPMorgan cut its ties with Gazprom and 
Vitol?
    Mr. Dimon. First of all, I wouldn't call those loopholes. 
The American Government, the Secretary of the Treasury--
    Mr. Sherman. Wait, wait, wait. Please don't respond--I 
didn't ask you to respond to my editorialization. Just a 
specific question: Have you cut the ties to Gazprom and Vitol?
    Mr. Dimon. We are following the instructions of the 
American Government, as they asked us to do it, and I think 
they're doing a great job.
    Mr. Sherman. Mr. Dimon, it's a yes-or-no question. You have 
not cut your ties to Gazprom and Vitol.
    Do you continue to own a major stake in the Russian bank, 
Sberbank?
    Mr. Dimon. No, we do not own a stake in Sberbank. I think 
that's in a--
    Mr. Sherman. Thank you.
    Mr. Dimon. --somewhere.
    Mr. Sherman. But I--
    Mr. Dimon. And we've materially cut out some of the 
relationships with--
    Mr. Sherman. --I would hope you would cut all your ties to 
Gazprom and Vitol.
    Let me go on to Citigroup. Have you cut your ties with 
Lukoil and Vitol?
    Mr. Dimon. Can I just add one other thing?
    Mr. Sherman. Not on my time, you can't.
    Mr. Dimon. No one is doing--
    Mr. Sherman. Reclaiming my time--
    Mr. Dimon. No one--
    Mr. Sherman. --Mr. Dimon.
    Chairwoman Waters. The time belongs to the gentleman from 
California.
    Mr. Sherman. You can do a press conference afterwards and 
comment as you like. Not on my time.
    Ms. Fraser, has Citigroup cut its ties to Lukoil and Vitol?
    Ms. Fraser. Similar to Mr. Dimon, we have been working down 
our exposures in Russia and--
    Mr. Sherman. So, you have not cut your ties yet.
    Let's move on.
    A number of the banks here have said that you're going to 
cut investment in new coal-fired electric plants. The question, 
though, is, are you going to finance crypto mining, which 
creates electricity that is then wasted on something that 
doesn't keep anybody's lights on, and doesn't cook anybody's 
food?
    Ms. Fraser, are you going to be financing crypto mining?
    Ms. Fraser. I do not believe so.
    Mr. Sherman. Mr. Moynihan?
    Mr. Moynihan. We do not have any.
    Mr. Sherman. Mr. Scharf?
    Mr. Scharf. I'm not aware of any financing like that.
    Mr. Sherman. Okay.
    Finally, a capital markets question.
    We have limits on margin lending designed to protect the 
lender--and, in this case, the lender is you, and you're 
systemically important to us. It's designed to protect the 
investor, but, most importantly, it's designed to protect the 
capital markets. That's why on equity investments we only allow 
a one-to-one margin.
    But the total default swap is a loophole that allowed 
Archegos to get a nine-to-one margin. Can you commit now to 
follow the rule that we provide only a one-to-one margin? Or do 
you want to use loopholes to provide the nine-to-one margin?
    I might add that, with Archegos, the lenders lost well over 
$5 billion.
    Mr. Cecere?
    Mr. Cecere. We have no relationship with that firm and do 
not have--
    Mr. Sherman. Do you use credit default--these swaps to 
avoid the margin limit requirements?
    Mr. Cecere. Not that I'm aware of, sir.
    Mr. Sherman. I believe my time has expired.
    Chairwoman Waters. Thank you very much.
    The gentleman from Michigan, Mr. Huizenga, is now 
recognized for 5 minutes.
    Mr. Huizenga. Sorry, Madam Chairwoman. It was my 
understanding that my colleague, Mr. Posey, was going to be 
next? He's on the screen. Just clarifying before we get going 
on the time.
    Chairwoman Waters. The gentleman has 5 minutes.
    Mr. Huizenga. But my colleague who is onscreen was supposed 
to be next in line and is ready. He's in between--
    Chairwoman Waters. The gentleman from Florida, Mr. Posey, 
is now recognized for 5 minutes.
    Mr. Posey. Thank you, Madam Chairwoman.
    Mr. Dimon, in late May, you told stakeholders to, ``brace 
yourselves,'' for an economic hurricane. What's your current 
outlook along those lines?
    Mr. Dimon. Sir, I think you've heard that the American 
consumer is still actually in rather good shape. They're 
spending money, 10 percent more than in the prior year. They 
have a good balance sheet. Their debt balances are low. Their 
confidence level is going up. Jobs are plentiful. I think it's 
a good thing that wages have gone up for the lower end. That's 
all the good news.
    That's being met by other forces which we don't know the 
full effect of: war in Ukraine; oil prices going up; interest 
rates going up; inflation. And the worst possible outcome is 
stagflation. Those things will absolutely cause a slowdown and, 
at some point, increase unemployment. And we don't know the 
full outcome.
    Mr. Posey. In your opinion, what is the most urgent 
regulatory reform that this committee could make in terms of 
improving our nation's economic and financial well-being?
    Mr. Dimon. I think when you're looking at something like 
inflation, there are really three things to do. Rates will have 
to go up. That will reduce demand. I think spending less money 
reduces demand. And we should also focus on the supply side.
    And there is evidence in certain areas--mortgages, small-
business regulation, some capital regulation--that regulations 
could actually reduce the burden on businesses and get people 
to hire more employees and produce more products and services.
    Mr. Posey. What role did monetary and fiscal policy, 
especially the Fed's financing of congressional deficit 
spending, play in our spiraling inflation, particularly in food 
and shelter prices and other components of the Core CPI?
    Mr. Dimon. To give credit where credit is due, I think the 
government did the right thing early on in the crisis by taking 
dramatic action to reduce the pain of the pandemic. Remember, 
unemployment went from 4 percent to 15 percent in 3 or 4 
months.
    But since then, in total, fiscal spending has been $6 
trillion, 30 percent of the GDP, which is bigger than any time 
in history other than World War II. And QE probably went on for 
too long, another $3 or $4 trillion, and we are paying the 
price of too much fiscal monetary stimulus.
    I don't want to second-guess all of the people doing that. 
That might have been predictable at the time. They're taking 
the right action to reverse it. But I don't think you could 
spend $6 trillion and not expect inflation.
    And I don't like to cry over spilled milk. Let's do the 
things we have to do to fix all that and then move forward, and 
grow the economy, which is the best way to reduce inflation and 
help all of our citizens.
    Mr. Posey. How likely do you believe it is that the Fed 
will achieve a so-called, ``soft landing''--reducing inflation 
without an unacceptable decline in economic activity?
    Mr. Dimon. I do not like to make forecasts. I don't think 
I've ever seen anyone forecast the future properly. I look at 
probabilities. I think there's a chance, not a big chance, a 
small chance, of a soft landing. There's a chance of a mild 
recession, a chance of a harder recession.
    Because of the war in Ukraine and the uncertainty that it 
causes in the global energy supply and food supply, there's a 
chance it could be worse. And I think policymakers should be 
prepared for the worst, so that we take the right actions, if 
and when that happens.
    Mr. Posey. Are ESG ratings useful in terms of supplying 
investors with enough information to make intelligent tradeoff 
decisions among economic rates of return and environmental, 
social, and government (ESG) objectives? Or are they merely a 
rating of past ESG performance?
    Mr. Dimon. I think we need more work to make it clearer 
what these ratings are and what they mean.
    Mr. Posey. What do you think our nation's near-term energy 
strategy should be in terms of traditional energy sources like 
oil and gas?
    Mr. Dimon. We aren't getting this one right. The world 
needs 100 million barrels, effectively, of oil and gas every 
day, and it'll be needed for 10 years. To do that, we need 
proper investing in the oil and gas complex. Investing in the 
oil and gas complex is good for reducing CO2. Because what 
we've all seen is that, because of the high-priced oil and gas, 
particularly for the rest of the world, you've seen everyone 
going back to coal, not just poor nations like India, China, 
Indonesia, and Vietnam, but also wealthy nations like Germany, 
France, and the Netherlands. CO2 is getting worse.
    We need to have proper rules and regulations and government 
policy to have an effective transition to reduce CO2, keeping 
energy secure. We've all learned that energy supply globally is 
not secure, is still precarious. The United States is self-
sufficient. We use and produce 10 million barrels of oil a day. 
Many countries don't. And their sense of energy-insecurity is 
enormous. It is quite dangerous for them. And you see that in 
Germany and the war of Russia and Ukraine.
    Mr. Posey. Thank you for that frank response.
    My time has expired, and I yield back. Thank you, Madam 
Chairwoman.
    Chairwoman Waters. Thank you very much.
    The gentleman from New York, Mr. Meeks, who is also the 
Chair of the House Committee on Foreign Affairs, is now 
recognized for 5 minutes.
    Mr. Meeks. Thank you, Madam Chairwoman.
    Let me address my first question to Mr. Dimon.
    JPMorgan has committed to releasing a report on its racial 
equity audit by the end of this year. And I think that's a 
critical audit. I want to focus on two aspects of your racial 
equity audit.
    JPMorgan has noted on its website that workforce will be 
included in the audit. But it simply states, ``build a more 
equitable and representative workforce and hold executives 
accountable.''
    Can you please explain what that entails? Is JPMorgan 
conducting this particular piece of the audit? And what are 
your plans to ensure that people of color hired at entry-level 
positions will be supported in achieving higher-ranking 
positions and being able to move up the ladder?
    Mr. Dimon. Yes. I'm extremely proud of our efforts in 
diversity. And I think the racial equity, the $30-billion 
commitment, that's what's being audited. That's $8 billion in 
mortgages to minorities, $12 billion for affordable housing, 
$500 million of small businesses, and a lot of education. 
Twenty-five percent of the new branches are in LMI communities.
    That's what the audit is for. There are other diversity 
efforts, like hiring, training, and recruiting, which are not 
part of the audit, which we do report on, so you will get to 
see our progress in that.
    Mr. Meeks. Also, will the audit examine JPMorgan's 
partnerships with diverse-owned asset managers and firms to 
build stronger portfolios? And do you have any specific goals 
or accountability measures currently in place?
    Mr. Dimon. There are, in the racial equity, the $30 
billion, there are vendor efforts that are in that. There are 
also vendor efforts outside of that. One is being audited; one 
isn't. And we'd be happy to report on that too.
    Mr. Meeks. I look forward to having both of those reports.
    Mr. Dimon. Thank you.
    Mr. Meeks. One other thing that's extremely important to 
me--I wouldn't be here today--is that the greatest investment 
that takes place by the average American, but especially the 
largest for African Americans, is homeownership, which I 
believe is extremely important.
    Mr. Scharf, I'll just ask you this question. It has been 
reported that Wells Fargo, along with other banks, is looking 
to reduce its mortgage lending business, including in areas 
like FHA lending.
    Can you please explain the factors that Wells Fargo 
considered in making this decision to shrink its mortgage 
lending business? And how do you believe it will impact 
communities of color and vulnerable communities, who are 
already struggling to access affordable mortgage programs?
    Mr. Scharf. Thank you, Congressman.
    I think it's important to--first of all, we are committed 
to the home lending business, and we're deeply committed to 
doing our part to increase Black homeownership through our home 
lending business.
    But it's important to note that the mortgage market has 
changed dramatically. And if you were to turn the clock back 
probably 10 or 15 years, you would find most of the banks up 
here as the largest mortgage lenders in the country. That's not 
even close to true today. I believe we were the number-one 
mortgage lender in the country, and we're now number six.
    And it's not because we have purposely deemphasized the 
business. Regulations are inconsistent between banks and 
nonbanks, and cost structures are different. And the nonbanks 
have taken an increasingly larger share of the market as we 
have continued to try to focus on providing home lending 
products both for our customers but in the communities that we 
serve.
    To the extent that our mortgage business does get smaller 
from here, I can assure you, that we're going to do everything 
that we can to ensure that we're continuing to lend to those 
most in need, whether they are within communities of color or 
those which are more racially- and ethnically-diverse. That's 
something that we're going to track and we're very, very aware 
of.
    Mr. Meeks. And let me just emphasize how important, because 
I am focused on closing the wealth gap. And the way you close 
the wealth gap, starting out, is homeownership.
    In our area, we talk about how in most markets, owning a 
home is an appreciating asset, so you buy the house and rent 
the car, because one is an appreciating asset and the other is 
a depreciating asset.
    So, making sure that opportunity continues in our 
communities is extremely important. And to hear that the banks 
are shrinking that is concerning to me. And that opens up to 
where else you can get a mortgage on an equitable basis.
    I'm almost out of time, but Mr. Moynihan, I was concerned 
about climate change and the reporting of Scope 1 and Scope 2 
emissions and, where material--I think that your comment letter 
said that you would support Scope 1, Scope 2, and, where 
material, Scope 3.
    And I'm out of time, so I'm not going to get a chance to 
get to it, but I would like to get an answer from you in 
writing. Can you please explain what Bank of America's position 
is with respect to materiality of Scope 3 emissions and what 
the relevant safe harbors should include? Just do that in 
writing. I would appreciate it.
    Chairwoman Waters. The gentleman's time has expired.
    Thank you.
    The gentleman from Michigan, Mr. Huizenga, is now 
recognized for 5 minutes.
    Mr. Huizenga. Thank you, Madam Chairwoman.
    And to our newbies, welcome.
    To our frequent flyers--Mr. Scharf, Mr. Moynihan, Mr. 
Dimon, and Ms. Fraser--welcome back. One more punch on the 
punchcard and I think you get a free cup of coffee. 
Interestingly enough, you've actually been here more than SEC 
Chair Gary Gensler has.
    I wish we would pay as much attention to the actual 
regulators--the folks, by the way, whom we have a 
constitutional duty to have oversight of--than those that the 
regulators are supposed to regulate.
    Mr. Dimon, and Ms. Fraser, I want to give you a very quick, 
brief moment. Do you comply with U.S. and international 
sanctions? I think that was what the implication was earlier 
when you were interrupted. Very quickly.
    Mr. Dimon. Absolutely.
    Mr. Huizenga. Okay.
    Ms. Fraser?
    Ms. Fraser. Absolutely.
    Mr. Huizenga. Okay. Those are U.S. and international 
sanctions. Got it.
    Last time, those of you who are returning Members and 
returning players will remember that I asked everybody what the 
one issue was that they thought was going to be the biggest 
barrier.
    Mr. Moynihan, you said the economy.
    Ms. Fraser, you touched on cybersecurity.
    Mr. Scharf, you hit on cyber as well.
    Mr. Dimon, you talked about public policy. And I'd like to 
give you a moment to clarify that. This is multifaceted, the 
various elements to that. But if you could just lend a little 
color to that, I'd appreciate it.
    Mr. Dimon. It would be a pleasure.
    Public policy--I think America, in the last 20 years, we've 
grown 2 percent. It should have been 3 percent. We should 
aspire to do more. That lack of growth has hurt, I think, 
household income by $15,000 or $20,000. By the end of the 20 
years, it would have lifted up all of our citizens, and it 
would have paid for a lot of programs we want.
    We don't strive for growth. If you look at why it wasn't 3 
percent--which is why I was exploring public policy--it's our 
bad infrastructure planning, it's our inner-city school 
education, it's excess regulation, it's expensive healthcare. 
We have the best healthcare in the world; we also have the most 
expensive, and 50 million people are uninsured. It's excessive 
litigation, which is 1 percent more than the rest of the world, 
ans I can go on and on and on.
    It's mortgages. You want to make mortgages more accessible 
to minorities and lower mortgages? Reduce the burden of 
regulation. It'll bring down the cost and make it more 
accessible--
    Mr. Huizenga. And then, reclaiming my time on that, as a 
former, long-ago licensed REALTOR, and someone whose family is 
still involved in housing and construction, please, for the 
love of everything that is holy, do not offer a 50-year 
mortgage. Okay. This will do nothing, absolutely nothing, to 
build wealth or build equity. All you will be doing is having a 
long-term rental, because you folks are going to be getting all 
of the interest.
    So, homeownership is the key, and I agree with my friend 
from New York on this. But it is not just extending payments. 
We have to get at the root cause of why housing is not 
affordable.
    Mr. Dimon, very quickly, you said in your testimony, ``Our 
success and accomplishments are founded on our commitment to 
our shareholders.''
    Obviously, that seems to have been shifting. I would say 
that the Securities and Exchange Commission and others, who 
have done an about-face on shareholder proposals with new staff 
guidance and those kind of things, seem to have a different 
take.
    I'm curious, how are you balancing--is there a shift in 
this? And you have 15 seconds.
    Mr. Dimon. We will still focus on building the best company 
by serving shareholders, employees, and customers, and we'll 
have to navigate whatever the new SEC rules may be.
    Mr. Huizenga. Okay.
    Mr. Rogers, we're going to touch on mergers. I would, by 
the way, posit that mergers are more because of Dodd-Frank than 
greed or nefarious motives.
    And, in fact, I think, Mr. Dimon, you, on a shareholder 
call at one point, said that Dodd-Frank was good for your 
business, and the consolidation that was going on.
    Mr. Rogers, would you agree that retail banking is a 
highly-competitive business?
    Mr. Rogers. It is. Yes, Representative. It's very 
competitive.
    Mr. Huizenga. Okay. And your bank, Truist, is the result of 
a merger in 2019, correct?
    Mr. Rogers. That's correct.
    Mr. Huizenga. Do you believe that merger allowed you to 
increase or decrease the accessibility to banking for your 
customers?
    Mr. Rogers. I think the merger has afforded us a great 
opportunity to increase accessibility for our customers.
    And that was never more apparent than during the pandemic, 
when we were able to do $17-billion worth of loans, and be the 
4th-largest PPP lender, doing 120,000 loans and 80,000 to small 
businesses. We wouldn't have been able to do that with our 
prior scale.
    Mr. Huizenga. Okay. I appreciate that.
    I only have seconds remaining here. I do believe that the 
policies that we've had as a Federal Government, including and 
leading with the spending that we have done, have led the Fed 
to this spot, where they probably need to do a 100-point basis 
increase, if not--certainly that 75 points. Otherwise, we are 
going to find ourselves in a worse inflationary situation. And 
we have to stop the spending and get our policy house in order.
    With that, I yield back.
    Chairwoman Waters. The gentleman from Georgia, Mr. Scott, 
who is also the Chair of the House Agriculture Committee, is 
now recognized for 5 minutes, and he knows a lot about Dodd-
Frank.
    Mr. Scott. Thank you very much for your kind remarks, Madam 
Chairwoman.
    Protecting our consumers from online fraud and theft has 
now become the number-one issue facing the security of our 
great financial system. One of the things that several of us 
have been working on in this committee is to bring together 
public-private partnerships to address this, because this 
technology is overwhelming, and you can see how so many of our 
consumers have become victims.
    I'm delighted to know about the public-private partnership 
that is going on now between FS and the Wharton School of 
Finance at the University of Pennsylvania over in Philadelphia.
    Mr. Rogers, you have expressed your support for public-
private-sector collaborations to help us protect our customers 
from things like this electric payment scam.
    Would you mind telling us, how do you see our public bank 
regulators and our private-sector financial institutions 
working together to ensure that we have Federal laws that will 
provide electronic transfer protection for our defrauded 
consumers in our great nation?
    Mr. Rogers. Thank you, Representative Scott, and thank you 
for leading on this very important issue of the fraud that has 
been experienced by our consumers. It's being perpetuated by 
organized criminal activity, and that got exacerbated and 
accentuated during the pandemic.
    I think we have some existing role models in cybersecurity 
already, where we coordinate as banking institutions and we 
work with our various agencies so that when something happens 
on a cyber case, we communicate that immediately. And I think 
we have that same opportunity with fraud.
    Mr. Scott. Very good.
    Tell me exactly how you would propose that we reimburse 
victims who have been scammed into initiating an electronic 
payment transfer?
    Mr. Rogers. We do reimburse today. We do reimburse those 
who have been scammed, and particularly those who have been 
scammed with our bank's name used in particular. We're very 
consistent in that.
    But I think, in addition to reimbursement, we need to be 
focused on eliminating the fraud and fighting the criminal 
activity.
    Mr. Scott. Mr. Dimon, may I come to you, please?
    One of my biggest priorities has been reducing the number 
of unbanked families in our nation. What is your institution 
doing to get more of the unbanked population into the 
traditional, regulated banking system?
    Mr. Dimon. Sir, we have 25 percent of our branches in LMI 
neighborhoods. We have a new thing called a community branch, 
which is much larger; we invite in the population. We have 
things like community management, where we walk down the 
street.
    We have financial education seminars about mortgages, 
saving money, and opening checking accounts. We invite the 
community in, tell them to come as you are, and learn about 
these services. These seem to be working quite well. They're 
part of the OCC Bank On program, and the Roundtable for 
Economic Access and Change (REACh) program. And I do think 
these programs are starting to actually have an effect.
    Mr. Scott. And, also, let me ask you this: What is your 
institution, JPMorgan Chase, doing to overcome the mistrust 
that many people--one of our biggest known problems with 
decreasing the number of unbanked families in our nation is 
mistrust of traditional banks like each of yours. What is your 
institution doing to overcome this mistrust of large banks?
    And if there are any of you who are addressing this issue, 
please pipe in.
    Mr. Dimon. I would love you to come visit some of those 
community branches in Harlem, the south side of Chicago, 
Crenshaw, and New Orleans, Ward 5, and Ward 6 over there, and 
you'll see what we're doing.
    Local vendors, local folks, they're all coming in. We do 
tens of thousands of seminars. We try to make people very 
comfortable. We have products specifically designed with very 
low fees, no overdraft, and things like that.
    And I totally agree with you. That is part of the job.
    Mr. Scott. Thank you.
    And I really appreciate this hearing.
    Chairwoman Waters. Thank you very much.
    The gentleman from Oklahoma, Mr. Lucas, is now recognized 
for 5 minutes.
    Mr. Lucas. Thank you, Madam Chairwoman, for holding this 
hearing.
    And thank you to the witnesses for appearing today.
    The financial institutions you all represent and the U.S. 
banking system at large plays a vital role in the communities 
by protecting savings, delivering quick and secure payments, 
and providing access to credit. Banks will have to help their 
communities, their businesses, and their consumers weather the 
intense economic uncertainty we're now in today.
    Inflation remains at a 40-year high. Businesses and 
consumers are still grappling with commodity price swings, 
elevated energy prices, a tight labor market, and supply-chain 
disruptions. U.S. real GDP declined in the first and second 
quarters of 2022. The Federal Reserve will again raise interest 
rates today, I suspect, which is designed to discourage 
consumption and business activity. How are you advising your 
customers on how to prepare for these conditions?
    And I'll start with you, Mr. Moynihan. What are you telling 
your folks out there?
    Mr. Moynihan. I think, with the amount of uncertainty, job 
number one is to deal with inflation. Inflation has impacts, as 
my colleagues said, on the people who can least afford it.
    And while the impact on the mortgage market of raising 
rates doesn't feel good, it needs to be done to slow down 
housing appreciation, because 20-percent-per-year housing 
appreciation is not a good thing for people to keep up with. 
That's job number one.
    And when we talk to our clients, it's the same thing. The 
Fed will raise rates to get inflation. And then, as an 
operating entity, as a consumer, as a company, as a small 
business, you'll understand what that impact is. It's going to 
have an impact of slowing demand; it's going to have an impact 
of raising your cost-to-debt. And you should be making sure 
your business plans and personal plans adjust to that.
    Mr. Lucas. Does anyone else wish to touch on that?
    Okay.
    I remember the economic suffering we endured in the early 
1980s. I was in college and just beginning to farm on my own 
when the Fed had to strangle--and that's the appropriate word--
high inflation out of the economy. And I worry that the 
reckless policies and excessive stimulus we've seen make the 
Fed's job even more difficult.
    But turning to question number two: During a recent speech, 
the Fed Vice Chairman for Supervision, Michael Barr, discussed 
how the Federal Reserve is considering how to develop and 
implement risk-related scenario analysis.
    I worry that the regulations could begin to use climate 
stress tests to shape and enhance capital requirements, which 
could have negative, long-term economic consequences.
    Climate-scenario design and associated data remain 
considerable obstacles, as well as the high potential for 
politicization.
    Mr. Dimon, could you discuss your perspective on the 
argument that the Fed should tie climate risks with increased 
capital requirements, please?
    Mr. Dimon. Just for the folks here, we do 100 stress tests 
a week. We are quite worried about it. We always have been. We 
always did it. The Fed does one a year, and it's only one type. 
We do multiple different types.
    Among the stresses we've always had were hurricanes, 
storms, floods, and things like that. So, to the extent it's 
real like that, I'd say yes. To the extent it's for social/
public purposes, to have banks do something different on how 
they [inaudible] oil and gas, absolutely not. And if they did 
that, it would have an effect.
    Mr. Lucas. It does kind of come back to the old principle 
that banks are about collecting capital, pricing it and 
distributing it appropriately, and pricing it fairly.
    One last question. The state-owned Chinese banks continue 
to play a large international role. And the Chinese Community 
Party (CCP) is intimately involved in the banking system and 
has the ability to influence banks' lending activities and 
credit allocations. Could you discuss the challenges this 
creates in terms of global competition for U.S. institutions?
    Back to you, Mr. Dimon.
    Mr. Dimon. Yes, that's a very good point. We have to 
compete with global Chinese banks. The four largest are now the 
largest in the world in terms of assets. They also operate in 
50 or 60 countries, which they didn't do 20 or 30 years ago. 
They have less capital requirements than we do. They enjoy 
government support. Their government wants them to succeed. And 
I do look at that not as today's competition but as tomorrow's 
competition.
    All of the banks here play a different role in the 
ecosystem, but to bank big companies in countries around the 
world, you need big banks. If you want to bank Boeing, you have 
to operate in the 50 countries in which they operate.
    I'm going to do everything in my power to make sure we can 
compete with the best Chinese banks in the world. It's very 
important to the future of America that America maintain its 
financial supremacy, just like almost anything else.
    Mr. Lucas. Thank you.
    Madam Chairwoman, I yield back the balance of my time.
    Chairwoman Waters. Thank you very much.
    The gentleman from Texas, Mr. Green, who is also the Chair 
of our Subcommittee on Oversight and Investigations, is now 
recognized for 5 minutes.
    Mr. Green. Thank you, Madam Chairwoman.
    Madam Chairwoman, the great Maya Angelou summarized the 
essence of my very existence when she proclaimed, ``Bringing 
the gifts my ancestors gave, I am the dream and the hope of the 
slave.'' I proudly say that I am a descendant of enslaved 
people. Slavery existed in this country for some 246 years. The 
value of 246 years of unpaid slave labor has been estimated to 
be as much as $14.2 trillion.
    Let's examine for just a moment each megabank's involvement 
in financing slavery.
    Truist Financial Corporation has assets of approximately 
$532 billion. Five predecessor institutions engaged in 
financing slavery.
    PNC Financial Services Corporation has assets of 
approximately $534 billion. A predecessor loaned $135,000 to a 
railroad company that used slave labor in 1852.
    U.S. Bancorp has assets of approximately $582 billion. A 
predecessor institution made a loan secured by enslaved people.
    Wells Fargo has assets of approximately $1.71 trillion. A 
predecessor bank accepted enslaved people as collateral in at 
least 24 transactions, took temporary possession of enslaved 
people from defaults on loans, and conducted business with the 
Confederacy.
    Citicorp has assets of approximately $1.72 trillion. They 
provided a chart of mergers and acquisitions over a course of 
210 years, pursuant to a request that we made, that is lengthy 
and complex, but didn't give us a detailed report. Staff has 
asked for more information, but hasn't received it to this 
date. More to be said on that at a later time.
    Bank of America has assets of approximately $244 trillion. 
A predecessor bank secured a mortgage with real and personal 
property. The borrower's property included 13 enslaved people. 
A predecessor bank agreed to a $10,000 mortgage to U.S. 
Secretary of State John Forsyth, with 40 enslaved people as 
collateral.
    JPMorgan Chase has assets of approximately $3.38 trillion. 
Predecessor banks accepted 13,000 enslaved people as collateral 
for loans, and they came into possession of 1,250 enslaved 
people from defaults on loans.
    In the case of JPMorgan Chase, there has been an apology 
publicly made and an announcement of a $5-million scholarship, 
which amounts to about $384.61 per enslaved person. These 
scholarships went to persons in Louisiana.
    I have a question for each of you. The question is this: If 
you believe your bank has done enough to atone for your 
involvement with slavery, kindly raise a hand into the air.
    Let the record reflect that no hand has been raised.
    Next question: Will you publicly publish an atonement plan 
on or before your next appearance before the committee? An 
atonement plan. You have indicated that you have not done 
enough. Will you publish an atonement plan on or before your 
next visit? If so, raise your hand.
    Let the record reflect that not one bank has proposed an 
atonement plan.
    Let's quickly on move to another area. I don't perceive any 
of you to be a person of color. Have any of you self-identified 
as a person of color? Raise your hand.
    Not one person raises their hand.
    In the next 10 years, will there be a person of color to 
head your institution? If so, raise your hand.
    Truist Bank, and that is the only one, I think.
    Thank you. I yield back.
    Chairwoman Waters. Thank you very much.
    The gentleman from Kentucky, Mr. Barr, is now recognized 
for 5 minutes.
    Mr. Barr. Thank you, Madam Chairwoman.
    Mr. Dimon, in your April letter to shareholders, you called 
for a new Marshall Plan to ensure energy security for the 
United States and our European allies who are overly dependent 
on Russian energy.
    I couldn't agree more, which is why I am so skeptical of 
ESG and the weaponization of financial regulation designed to 
discriminate against American energy companies. It's why I 
oppose the imposition of European-style climate stress tests on 
U.S. banks, requiring banks to hold more capital when lending 
to fossil-energy- or carbon-intensive firms, and the SEC's 
flawed climate disclosure rule, which would politicize capital 
allocation, redirect capital away from American energy firms, 
and steer retail investors into higher-fee, less-diversified, 
and lower-return ESG investments.
    I commend you for recognizing in your letter that, 
``National security demands energy security for ourselves and 
our allies overseas,'' and for rejecting the demands of climate 
alarmists who have called on you to immediately cut off 
financing for fossil energy firms.
    But my specific question relates to coal, since coal still 
accounts for 22 percent of all electricity generation in the 
United States. And you write in your letter that, ``using gas 
to diminish coal consumption is an actionable way to reduce CO2 
emissions expeditiously.''
    Mr. Dimon, do you believe that a coal company with a strong 
balance sheet, little or no debt, and a demonstrable track 
record of creditworthiness should have the same access to 
conventional bank financing as a natural gas company with 
similar financial characteristics?
    Mr. Dimon. Yes.
    Mr. Barr. And will your institution commit to the continued 
financing of American coal producers, who are still needed and 
will be for some time, to supply the most affordable, reliable 
source of base-load power to the American economy?
    Mr. Dimon. We are working with responsible coal producers 
and utility companies--many of whom, by the way, dramatically 
reduced the CO2--as we speak.
    Mr. Barr. Mr. Moynihan, I'll spare you similar questions, 
as you and I have discussed this, and notwithstanding your net-
zero commitment, I appreciate your focus that job number one is 
on addressing inflation.
    And to lower the rate of inflation, we cannot rely 
exclusively on Fed tightening. We must also address the supply 
side. And that means more, not less, financing of American 
energy exploration and production. And I urge all of the CEOs 
here to adopt a similarly-measured approach to financing fossil 
energy.
    Mr. Moynihan, my question pertains to the FDIC's March 
request for information on the regulatory framework that 
applies to merger transactions involving one or more insured 
depository institutions.
    The FDIC's action signals a heightened regulatory 
resistance to bank mergers, presumably on the grounds that 
consolidation of the banking industry, which has significantly 
reduced the number of smaller banking organizations and 
increased the number of large and systemically important 
banking organizations, is a threat to financial stability.
    My question, Mr. Moynihan, is, which of the following 
institutions is a more formidable competitor to Bank of 
America? Is it SunTrust operating alone? Is it BB&T operating 
alone? Or is it the combination of the two institutions, now 
known as Truist?
    Mr. Moynihan. Undoubtedly, the combination of the two 
institutions, sir, is a more formidable competitor.
    Mr. Barr. And, Mr. Rogers, since I invoked the name of your 
institution, would you care to comment?
    Mr. Rogers. I'm proud that Mr. Moynihan named me as a 
strong competitor to his business.
    Mr. Barr. I take it from the responses of both of these 
gentlemen that an overly-aggressive resistance to mergers by 
the FDIC could actually diminish competition at the G-SIB level 
and therefore undermine financial stability.
    Final question to all of you, for anyone who wants to chime 
in is, do you assess the impact of a central bank digital 
currency (CBDC) as positive or negative for our credit market? 
Specifically, how would a CBDC impact your deposit base and 
therefore your ability to deploy capital into the real 
econoomy.
    Mr. Dimon?
    Mr. Dimon. If it's properly done, it'll be fine, but I 
don't trust that it'll be properly done. You're not going to 
have the Federal Reserve running call centers. There's a lot 
more banking services than the actual token that moves the 
money. There are fraud risk alert services, call centers, bank 
branches, ATMs, and the CRA.
    Properly done, it's not a problem. Improperly done, we'll 
have an issue.
    Mr. Barr. And, Ms. Fraser, in my remaining time, Vice Chair 
Barr suggests that he wants to review increased capital 
requirements. What would that do to the ability of your 
customers to repair supply chains, and your ability to deploy 
capital and fix inflation?
    Ms. Fraser. Given that we passed our stress test, which 
should be a test of whether we have sufficient capital, which 
is important for safety and stability, then the question 
becomes when you increase capital above that limit. And that 
can have a very detrimental effect on one's ability to lend 
right at the point when the capital markets shut them down.
    Mr. Barr. Thank you.
    I yield back.
    Chairwoman Waters. The gentleman's time has expired.
    The gentleman from Missouri, Mr. Cleaver, who is also the 
Chair of our Subcommittee on Housing, Community Development, 
and Insurance, is now recognized for 5 minutes.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    Let me just express some appreciation for the fact that 
some of you have already taken steps to make corrections as it 
relates to banking in distressed communities.
    As all of you probably know, in 1977, Congress passed the 
Community Reinvestment Act (CRA). And we did so because we were 
concerned about banks that were using deposits, even in some 
distressed neighborhoods, to fund out-of-State, and in some 
cases, international lending activities at the expense of 
addressing the local areas.
    So, the CRA was created. And we have not had any upgrades 
to the CRA since 1995, I think. Is there anyone of you who 
believes that we do not need to update the CRA?
    You have made me happier now, because I'm going to keep 
going toward happiness.
    Are all of you interested in and willing to look at ways in 
which we can increase CRA, even to the extent that you can get 
CRA credit for housing, affordable housing in urban areas? Is 
anyone willing to, and very, very, very interested in doing 
that kind of program?
    My joy level is continuing to rise.
    Ms. Fraser. Yes.
    Mr. Cleaver. Thank you very much.
    Now, to jump over a little bit, the role of non-bank 
lenders has increased, as you all know--and we have to deal 
with it--dramatically since our 2008 economic collapse. Non-
bank lenders now originate more mortgages in the United 
States--it was almost 69 percent of all mortgages in 2020.
    Nonbanks also originate four out of every five FHA loans, 
which are more likely to be originated in low- and moderate-
income communities. Between 2010 and 2016, the FHA share of 
loans originated by the 3 largest banks fell from 43 percent to 
5 percent.
    Are any of you willing to explain the retreat from FHA 
loans? And what are your banks doing to extend mortgages to 
low- and moderate-income borrowers? Is anyone's bank--yes?
    Mr. Moynihan. Having learned our lesson in FHA/VA practice, 
a lot of us have brought our percentages down, as you said. But 
we replaced it with programs that we put on our own balance 
sheet that are safe and sound for the consumer, that provide 
down payment assistance up to $17,000 on a loan. And that's 
what we did to offset it. So, I wouldn't look at FHA/VA as the 
only indicia of loans going into the communities, et cetera. 
But the risk of doing that business--the put-back risks, the 
servicing--it just wasn't worth it, honestly.
    And we still do 5, 6 percent of our loans in the FHA/VA 
program to help us with first-time homeowners, but we built 
programs outside where we can work with the consumer, and build 
great programs that will actually do more for the consumer, we 
believe.
    Mr. Demchak. Congressman, we work with FHA and have done 
so. We also put those loans on our own balance sheet.
    FHA, in my view, needs to be revamped. Today, there is a 
limit, because we become something called an, ``interested 
party,'' where we are only able to contribute 6 percent of the 
proceeds of the loan either in closing costs or in down payment 
assistance, by their regulation. When we do that, if we go 
beyond that, we balance-sheet it on our own. We don't actually 
participate in their program. They ought to change that.
    Mr. Cleaver. My time is running out--yes. I heard it is.
    Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you very much.
    We will now take a brief recess and resume in 10 minutes. 
The committee now stands in recess.
    [recess]
    Chairwoman Waters. The committee will come to order.
    The gentleman from Missouri, Mr. Luetkemeyer, is now 
recognized for 5 minutes.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman.
    And welcome back, witnesses.
    I'd like to focus on a larger issue today that affects 
every U.S. consumer and consumers all over the world, which is 
heavy investment in volatile and unfriendly countries, such as 
Russia and China.
    Ms. Fraser, Mr. Dimon, Mr. Moynihan, each of your banks has 
significant investments in Russia, which you drew down after 
Putin's invasion of Ukraine. While American sanctions were an 
impetus for those actions, it should be said that you did the 
right thing by shrinking your assets there.
    We learned two important lessons during the period. Number 
one, there is a large risk in investing in volatile nations 
with dictatorial governments. And number two, your investments 
play a significant role in supporting those nations' economies.
    In recent months, China has continually threatened our 
ally, Taiwan, with military exercises and violent rhetoric. 
Should the CCP follow through on its threat to invade Taiwan, 
are your banks prepared to pull your investments out of China?
    Mr. Moynihan, do you want to start?
    Mr. Moynihan. Sure. I think we'll follow the government's 
guidance, which has been, for decades, to work with China. And 
if they change that position, we'll immediately change it, as 
we did in Russia.
    Mr. Luetkemeyer. Ms. Fraser?
    Ms. Fraser. Yes, we would do likewise. We would follow the 
government guidance on that. We very much hope it doesn't 
happen.
    Mr. Luetkemeyer. Mr. Dimon?
    Mr. Dimon. Yes. We would absolutely salute and follow 
whatever the American government said, which is you all, and 
what you want us to do.
    Mr. Luetkemeyer. I appreciate your willingness to follow 
U.S. law, but you and your banks have made decisions that have 
gone well beyond U.S. law and entered the realm of moral 
judgments. For example, in 2018, Citi and Bank of America 
announced lending restrictions to certain gun manufacturers and 
retailers. In 2019, JPMorgan publicly announced that it will 
not fund private prisons. None of these decisions were made 
because of a law passed by Congress.
    Mr. Dimon, would an invasion of an American ally be enough 
for JPMorgan to make the moral determination to stop doing 
business with the Chinese?
    Mr. Dimon. I missed your question.
    Mr. Luetkemeyer. I asked if an invasion of an American ally 
would be enough for JPMorgan to make the bold determination to 
stop doing business with the Chinese Communist Party?
    Mr. Dimon. We'll have to decide when that happens.
    Mr. Luetkemeyer. You're not going to commit to pulling 
assets out of China if they invade Taiwan. That is what you 
just said.
    Mr. Dimon. The first thing I would do is call the American 
Government and ask for guidance. That's what I would do. That's 
what they would expect me to do.
    Mr. Luetkemeyer. Mr. Moynihan?
    Mr. Moynihan. It would be the same in terms of the 
decision. But we always look at clients and risk. And, in fact, 
you would find that before the Russia situation took place in 
Ukraine, we made adjustments to our risk, and we do that all 
the time in every country that is volatile, irrespective of--
    Mr. Luetkemeyer. Ms. Fraser?
    Mr. Moynihan. Clearly, it would be driven by the 
government. In an occasion that you're talking about, that 
would be driven by the government rules and regulations and 
laws and Congress' desire.
    Mr. Luetkemeyer. Ms. Fraser?
    Ms. Fraser. Similar to both Mr. Dimon and Mr. Moynihan, the 
first call would be to the U.S. Government to understand what 
they would be expecting and wanting us to do and the timeframe 
to do so.
    Mr. Luetkemeyer. Suppose the government said it's up to you 
to make your own decision, it's a business decision on your 
part. What would you say?
    Ms. Fraser. It's highly likely that we would have a 
materially-reduced presence, if any at all, in the country.
    Mr. Luetkemeyer. So if the business decision were left up 
to you, you would probably pull out or reduce some assets?
    Ms. Fraser. It's a hypothetical question, but it is highly 
likely that we would have a reduced presence.
    Mr. Luetkemeyer. Okay. Each of your banks has published 
statements pledging your commitment to supporting and 
protecting human rights around the globe. According to the 
State Department's 2021 report, genocide and crimes against 
humanity occurred in China last year. Those crimes include 
arbitrary and unlawful killings by the government, arbitrary 
imprisonment, forced sterilization, and rape and torture of a 
large number of those arbitrarily detained.
    Mr. Moynihan, do you condemn the Chinese Communist Party 
for those horrible acts that they regularly carry out?
    Mr. Moynihan. We look at any client we do business with, to 
their operations in any matter, and we make that decision. The 
governmental condemnation isn't the important thing of whom we 
do business with in China. It's actually the company that we 
underwrite. It's client selection, is what we call it, sir.
    Mr. Luetkemeyer. Would you explain that again? I missed 
that. I'm sorry.
    Mr. Moynihan. I think the question is, when we look at what 
we do in a country, it's individual clients. It's not a 
theoretical concept. We look at that client, if that client--
    Mr. Luetkemeyer. Mr. Moynihan, with all due respect, the 
government of China is the Communist Party. The Communist Party 
of China is the government. If you're doing business in that 
country, you're doing it willingly, with respect to them 
allowing you to be there, and you're doing it under their laws, 
which the last time you were here, one of you three actually 
made that comment.
    If they're committing these atrocities, are you okay with 
that? Are you willing to continue to do business with people 
who are committing these kinds of atrocities, when you say in 
other statements that that's a bad deal?
    Mr. Moynihan. We don't do business with companies that we 
believe are doing atrocities or something like that. You're 
asking a hypothetical question.
    Mr. Luetkemeyer. [inaudible] Under the protection and 
auspices of this government. That's my point.
    Ms. Fraser?
    Ms. Fraser. We obviously take any accusations of human 
rights abuses very, very seriously. Similar to Mr. Moynihan, we 
do not do any activity with companies that are involved in 
forced labor or the like.
    Mr. Luetkemeyer. It's okay to do business with the 
government?
    Ms. Fraser. We do business with the Chinese government.
    Mr. Luetkemeyer. Even though they commit those atrocities?
    Thank you. I yield back.
    Chairwoman Waters. The gentleman from Colorado, Mr. 
Perlmutter, who is also the Chair of our Subcommittee on 
Consumer Protection and Financial Institutions, is now 
recognized for 5 minutes.
    Mr. Perlmutter. Thanks, Madam Chairwoman.
    My questions are going to be a little simpler than that.
    Mr. Moynihan, Bank of America has some of the best 
economists in the world working for it. I have had a chance to 
meet with a couple of them. And I guess I'm coming at things a 
little differently than my Republican colleagues, and some of 
you.
    Looking at the last few months, from May on, prices have 
held steady or dropped. The University of Michigan anticipates 
prices to drop over the course of the next year.
    In conversations with your economists, what do they 
predict? What do they think is going to happen?
    Mr. Moynihan. Our economists have this quarter, third 
quarter of 2022, as a positive GDP, negative for the fourth 
quarter of this year, negative for the first quarter of next 
year, and I think negative for the second quarter of next year, 
and then moving positive and ending up at a 2-percent year-
over-year growth rate in the fourth quarter of 2022. That's the 
estimates they have.
    Mr. Perlmutter. Thank you. I dealt with them at the 
beginning of COVID--I don't know if you recall--just to kind of 
get their analysis of what they expected COVID to do to the 
economy if we did nothing, if we just held steady, if 
everything went--of we didn't do PPP, we didn't do 
unemployment, we didn't do any of that. And they said, well, 
then, we're going to have trouble.
    Thank goodness, from my point of view, we did a lot to keep 
the economy moving. And obviously, there is a year-over-year 
increase in prices, but if we go forward on an annualized 
basis, just based on August, it's 1.2 percent for the next 
year. And if you look at the whole summer, it's less than that.
    What I'm worried about is an overreaction by the Federal 
Reserve. The last time we saw them increase interest rates like 
this was back in the 1980s and early 1990s. And I can tell you 
that Colorado got clobbered. The housing market just stopped, 
as did everything else.
    And so, Mr. Demchak, I'm going to turn to you, because PNC 
had a pretty good-sized subsidiary called the Kissel Company 
back in those days; I don't know if you're familiar with it. 
But it suffered a lot of foreclosures back in the 1980s and 
1990s, as did some predecessors to U.S. Bank, and certainly 
JPMorgan. And Citi had the same issues.
    What do you see? What does your bank see on the horizon in 
terms of foreclosures? If Mr. Dimon is correct and we get hit 
hard because of Ukraine and this and that--I think most of what 
we're facing is supply chain disruptions caused by COVID, and 
that's why we have seen some prices go up.
    But are you prepared, is your bank prepared to handle a lot 
of foreclosures if the bottom falls out, as is a potential 
problem here?
    Mr. Demchak. Thank you for the question.
    I would suggest that I think inflation is going to be a 
little bit stickier than we would like, and I think as a result 
of that, interest rates are going to be a little bit higher 
than we would like for longer than we would like.
    The impact of that on housing is clearly already felt in 
the creation of new homes and the sale of homes. The impact of 
that on existing homeowners in LMI communities, in their 
inability to make payments as a function of inflation absorbing 
a greater percentage of their income, is a real issue.
    We work with government-funded programs, State-funded 
programs, and PNC-funded programs to make sure people stay in 
their homes.
    Mr. Perlmutter. Have you seen delinquencies rise?
    Mr. Demchak. We have not, at this point.
    Mr. Perlmutter. You have not seen delinquencies.
    Have any of the banks seen delinquencies rise or rising on 
home mortgages?
    Nope.
    Mr. Dimon and I have disagreed over the years on the amount 
of capital that should be retained, and part of this comes--my 
dad was on a bank board of a predecessor bank to U.S. Bank, and 
he was operating under a memorandum of understanding (MOU) 
during those years when the Fed took the interest rate up 
dramatically, back in the 1980s and early 1990s.
    Mr. Dimon, if you get your worst-case scenario that you 
kind of outlined, is JPMorgan capitalized to take such an 
economy?
    Mr. Dimon. Absolutely.
    Mr. Perlmutter. Does everybody else feel you're well-
capitalized?
    Mr. Demchak. Yes.
    Ms. Fraser. Yes.
    Mr. Perlmutter. Wells Fargo? Truist?
    Mr. Rogers. Yes.
    Mr. Perlmutter. Even if Mr. Dimon's worst predictions 
come--he didn't make a prediction; he was just saying it's a 
possibility.
    Mr. Rogers. Yes, sir. I think our stress tests are beyond 
Mr. Dimon's predictions.
    Mr. Perlmutter. Bank of America?
    Mr. Moynihan. Yes. You don't have to take our word for it. 
Look at the stress tests. For 10 years in a row, they have been 
stress testing under scenarios that have the worst indicator of 
every element that has occurred, so the highest residential 
real estate prices, the highest commercial real estate prices, 
the highest unemployment, the highest stock market, and look at 
the results.
    Mr. Perlmutter. Thank you.
    I yield back.
    Chairwoman Waters. Thank you.
    The gentleman from Texas, Mr. Williams, is now recognized 
for 5 minutes.
    Mr. Williams of Texas. Thank you, Madam Chairwoman.
    And I thank all of you for being here today. I appreciate 
it.
    Last week, a new merchant category code (MCC) was approved 
for gun and ammunition sellers. My Republican colleagues and I 
have expressed concerns that this will make it easier to track, 
expose, and limit the constitutional rights of millions of law-
abiding gun owners.
    Progressives are already cheering that this will be a huge 
step forward in monitoring suspicious gun purchases.
    After the left claimed victory, Visa came out with a 
statement about how they had been dragged into the political 
arena, and it reads, ``We do not believe private companies 
should serve as moral arbitrators. Asking private companies to 
decide what legal products or services can or cannot be bought 
and from what store sets a dangerous precedent. Further, it 
would be an invasion of consumers' privacy for banks and 
payment networks to know each of our most personal purchasing 
habits. Visa is firmly against this.''
    So even though I think the credit card company should 
disregard the new code, I do agree with the statement released 
by Visa.
    The problem with these new classification codes is that 
determining what is suspicious is a subjective exercise. And 
anyone who is against the rights of gun owners will want your 
institutions to flag every single transaction with a gun MCC to 
law enforcement.
    Before I continue, I want to quickly get a yes-or-no answer 
from each of you on two things: first, if you agree with 
implementing this new MCC for guns; and second, if you agree 
with Visa's public statement?
    We can start with you, Mr. Scharf.
    Mr. Scharf. Would you just please repeat Visa's public 
statement?
    Mr. Williams of Texas. Read the public statement that I 
just read?
    Mr. Scharf. Yes. Could you just repeat it? I didn't follow 
it.
    Mr. Williams of Texas. I can read it, but it's going to cut 
into our time. It just says they don't need to be in the 
political business and they want to get out of it, so--
    Mr. Scharf. To answer your question, we don't set the 
merchant category codes. The International Organization for 
Standardization (ISO) sets them, and we're instructed to follow 
them. So, what we think is not really relevant at this point.
    Mr. Williams of Texas. Okay.
    Mr. Rogers?
    Mr. Rogers. We'll certainly follow the rules set by the 
credit card companies' intermediaries, but we'll also abide by 
the laws for bank privacy and privacy of our clients.
    Mr. Williams of Texas. Do you agree with Visa's public 
statement?
    Mr. Rogers. We'll protect the privacy of our clients 
according to the law.
    Mr. Williams of Texas. Mr. Moynihan?
    Mr. Moynihan. As my two colleagues have said, the rules of 
the ISO are not up to us. We just have to implement them. But 
we believe in the privacy of our customer data, and we have 
held that true for many years.
    I'm not sure I agree with Visa's public statement at all, 
but it's their statement. I'm not sure I don't agree with it. I 
just really don't reflect on other people's statements, 
frankly.
    Mr. Williams of Texas. Ms. Fraser?
    Ms. Fraser. Similar to Mr. Moynihan, I can only speak for 
our own bank. We do not intend to use the code to limit sales 
of firearms for our individual card holders.
    Mr. Williams of Texas. You said you do not?
    Ms. Fraser. We do not intend to limit the purchase of 
firearms by our individual card holders as a result of the 
code.
    Mr. Williams of Texas. Mr. Dimon?
    Mr. Dimon. We actually don't know what they use it for, and 
we don't want to be in the business of telling American 
citizens what they can do with their money. But we understand 
your concerns over the issue.
    Mr. Williams of Texas. Okay. Thanks.
    Mr. Demchak?
    Mr. Demchak. I have nothing new to add. I think everybody 
has covered it.
    Mr. Williams of Texas. Okay.
    Mr. Cecere. We will abide by the rules and protect the 
privacy of the customers.
    Mr. Williams of Texas. Thanks for those answers.
    Ms. Fraser, what are the criteria that Citibank will use 
when determining if they should flag a suspicious transaction 
with this new code?
    Ms. Fraser. We will follow the regulatory requirements in 
terms of them filing suspicious activity reports (SARs) as we 
always do. But at first blush, in looking at this, we don't 
think it will be a factor in filing a SAR.
    Mr. Williams of Texas. Okay.
    Mr. Moynihan, on a similar note, how would Bank of America 
determine if a customer's first-time gun purchase warrants a 
SAR filing or is it just someone who recently became interested 
in hunting?
    Mr. Moynihan. Again, as my colleagues have said, if they 
purchase a gun at a shop, the fact that they purchased it has 
nothing to do with a SAR filing.
    Mr. Williams of Texas. My last question, when I talk to 
business owners in Texas, where I'm from, there doesn't seem to 
be any debate about whether or not we're in a recession, and 
they're concerned about it.
    And I'll be quick with this question, Mr. Dimon.
    Early this summer, you said that you believe there is a 
strong possibility of a recession, and a 20 to 30 percent 
chance of something much worse.
    Can you describe the economic hurricane that we could be 
seeing, and if you think we can avoid further economic damage?
    Mr. Dimon. Yes. Just that a strong American economy, strong 
consumers being offset by high rates, stagflation, inflation, 
war, QT, which we have never had before. And those are meeting 
as we speak, and they will meet for the next 6 to 9 months. We 
don't know the outcome.
    Mr. Williams of Texas. Thank you.
    I yield back.
    Chairwoman Waters. Thank you.
    The gentleman from Connecticut, Mr. Himes, who is also the 
Chair of our Subcommittee on National Security, International 
Development and Monetary Policy, is now recognized for 5 
minutes.
    Mr. Himes. Thank you, Madam Chairwoman.
    And thank you all for being here.
    I first sat in this room in the first quarter of 2009, when 
the economy was contracting at an annualized rate of 10 
percent, and I really did worry that a number of your 
institutions weren't going to survive the week. We have come a 
long way.
    Mr. Dimon, thank you for acknowledging, I think you said 
where credit is due, that Dodd-Frank was a big part of that. I 
was assured at the time by people on my side of the aisle that 
Dodd-Frank would crumble like a sand castle in a hurricane. I 
was assured by my friends on the other side of the aisle that 
it would obliterate the banking sector. None of those things 
proved anywhere close to being correct.
    Credit where credit is due, we got through the mother of 
all stress tests in these last 2 years because of Dodd-Frank, 
but also because of your stewardship of the institutions that 
you run. And thank you for that, not just for not creating 
systemic problems, but for actually getting the PPP, which was 
so important to so many businesses in my district.
    I say all that just because I will forever focus on risk, 
and I have three questions about risk in 4 minutes.
    Mr. Dimon, 70-percent-plus of the mortgage origination 
market has migrated outside of a banking environment. We have a 
lot less visibility. Take a minute to talk about whether we 
should be focused on that risk.
    Mr. Moynihan, I'm going to ask you in a minute or so for 
nonobvious risks that Mr. Dimon doesn't cover.
    And then, Ms. Fraser, I'm going to close with you with a 
minute on, because of your global footprint, what risks are out 
there that we may not have jurisdiction over, whether it's Asia 
or Europe, that could get transmitted into our system here.
    Mr. Dimon, the mortgage origination market.
    Mr. Dimon. I wouldn't call it systemic risk. It is riskier 
because the smaller companies cannot finance and advance funds 
to securitization when there is a crisis--we could--and that we 
need to--we do need to reform it for the sake of the industry 
so that people can get mortgages at all times.
    Mr. Himes. Mr. Moynihan, what risks are we not thinking 
about? What's the bullet we're not seeing right now?
    Mr. Moynihan. Are you talking about in the mortgage 
business?
    Mr. Himes. No, no, no, generally.
    Mr. Moynihan. I think--
    Mr. Himes. Inside or outside of the banking sector. 
Sometimes, I worry just as much about what's happening outside 
of the banking sector than what's happening inside.
    Mr. Moynihan. I think when you think about the economy and 
where it goes to create risk versus leverage, and honestly, 
there is more of that outside the banking system than inside. 
And that's something I think the Financial Stability Oversight 
Council (FSOC) and others should be carefully watching now in 
terms of funds, private lending funds, private lending funds 
that have leverage in them, private lending funds that lend at 
high-leverage multiples.
    Our industry, because of the examination practices in, 
frankly, the way the companies are run, does not participate in 
them. That's where I'd say a risk is. But it's always going to 
be about the economy and the demand--
    Mr. Himes. Let me ask you to be just a little bit more 
specific. When you say private lending funds, are we talking 
about collateralized loan obligations (CLOs)? Are we talking 
about the high-yield market? What are you talking about and 
what should we be focused on?
    Mr. Moynihan. It would be all of them. In other words, the 
amount of private credit, not only in mortgage but every single 
asset class, more than half of it is sitting outside our 
industry. And if you look at where the leverage multiples and 
individual deals get done, they tend to get done outside our 
industry at higher multiples due to the regulatory.
    Mr. Himes. Okay. And I think you have all said this morning 
that you feel like your institutions are either adequately 
capitalized or perhaps overcapitalized. Are you saying that 
there are private nonbanks that are undercapitalized relative 
to the lending they're doing?
    Mr. Moynihan. Yes, but they will have net asset value--in 
other words, their liabilities are interest in those funds that 
will be mark-to-market, so you won't have the same kind of 
stress.
    But the impact on the economy of liquidating those 
companies by people who don't work the same way the banking 
system works with the companies could cause more damage than 
if--we build reserves. We work out companies. This is what we 
have done for literally hundreds of years.
    Other people don't have the staff to do that. Therefore, 
they just sell them, and the liquidation process can cause more 
ongoing damage to the economy.
    Mr. Himes. Okay. Thank you.
    Ms. Fraser, let me close with you. Again, we have 
jurisdiction over some stuff but not over lots of stuff. What 
do we need to be wary of internationally?
    Ms. Fraser. When we look internationally, I think that what 
has happened from the pandemic and the war is that it has 
highlighted a lot of fragility in the global economy. And, 
therefore, we have to increase our concern around energy 
security, food security, and cybersecurity, which will not 
necessarily all have an impact in the U.S., but there could 
well be a spillover effect.
    For example, in Europe the supply shocks in the energy 
market that they are facing could well be a factor affecting 
the U.S. economy next year as demand slows and they enter a 
highly likely recession.
    So, the interdependencies and these fragilities are going 
to be the pieces we have to keep an eye on.
    Mr. Himes. Connect that for me. You identified energy and 
food. What's the mechanism of transmission--I get the economy, 
if there is an economic slowdown--by which global energy or 
food markets actually create a prudential problem for you?
    Ms. Fraser. It could result in--if there is a material 
energy shock continued in Europe, you could see industrial 
production shutting down this winter. You could see people who 
are cold. And that can have discontent from their populations, 
which could then translate into lower demand and, therefore, 
lower demand for American goods and services and that would 
impact the U.S. economy.
    So, that's where the main mechanism would come from.
    Mr. Himes. Thank you. My time has expired.
    Thank you, Madam Chairwoman.
    Chairwoman Waters. Thank you very much.
    The gentleman from Arkansas, Mr. Hill, is now recognized 
for 5 minutes.
    Mr. Hill. Thank you, Madam Chairwoman.
    And thank you all for taking time away from your day jobs 
to spend a day with us. I'm glad to know you had a comfort 
break a few moments ago. That was kind of you, Madam 
Chairwoman. Thank you. And I hope each of you got a little cup 
of water and a cracker maybe to go with that.
    This is a good discussion. I thought Mr. Lucas raised the 
discussion quite well on climate stress testing. I saw where 
Mr. Barr, our new Vice Chair of the Fed, thinks this is a 
priority. And some of you are complying with that in Europe, 
are you not?
    Ms. Fraser, are you complying with a climate stress test 
over in your operations in Europe?
    Ms. Fraser. Yes, we have had to conduct those in compliance 
with the legal requirements.
    Mr. Hill. What do you think that costs the company, pre-
tax, to do that?
    Ms. Fraser. I would have to get back to you with a number. 
I don't--
    Mr. Hill. Similarly, if you don't mind, if you would 
respond in writing on that.
    Ms. Fraser. I will.
    Mr. Hill. You all just passed the stress test that the Fed 
imposed. And in that analysis of sharp declines in unemployment 
and sharp failures in performing assets, when you look at those 
performing assets, you take climate into account when you make 
a loan to build a tower on Miami Beach?
    Mr. Moynihan, do you not do that?
    Mr. Moynihan. Sure. Leaving aside the stress test, you have 
to take into account the risk in the project to borrow or the 
person. Of course, we do.
    Mr. Hill. Mr. Casten has a bill that he's introduced here 
for the Majority, H.R. 3571, the Climate Change Financial Risk 
Act, that would require climate stress testing, and would add 
capital requirements to anyone who fails that stress test based 
on a panel of scientific experts advising the Fed.
    Is this a good idea? Who would like to answer that 
question?
    I'd be happy to call on Ms. Fraser again.
    Is that a good idea? Do you like that idea?
    Ms. Fraser. The challenge with that idea at the moment is 
we just don't have the data.
    Mr. Hill. Right. It's not comparable, is it? These 
proposals are not comparable within an industry or between 
industries. Is that a fair statement of what I read in the 
Financial Disclosure Task Force?
    Yes. The record shows they're nodding.
    Mr. Moynihan, privacy. You comply with the European General 
Data Protection Regulation (GDPR) privacy rules, is that 
correct, in Bank of America's operations in Europe?
    Mr. Moynihan. Yes, we do.
    Mr. Hill. And you are a big bank in California, so you 
comply with California's privacy law, right?
    Mr. Moynihan. We have to obviously.
    Mr. Hill. And you do, I'm sure, a magnificent job there.
    Do you think we need a Federal preemption and a Federal 
privacy law? Would that aid the financial services industry 
generally?
    Mr. Moynihan. I think the financial services industry has 
had 30 years of privacy regulation that other industries 
haven't, and I think we do a pretty good job of it. We're 
examined on it. It's very different from other industries. We 
have an ongoing examination process.
    I think--and, frankly, we are exempted from some of those 
rules because of that long history.
    Mr. Hill. Yes. So, Gramm-Leach-Bliley is pretty powerful 
for privacy?
    Mr. Moynihan. Yes, sir.
    Mr. Hill. I hope, Madam Chairwoman, that maybe in the next 
Congress we can work with the House Energy and Commerce 
Committee and make sure we're all on the same page on privacy.
    Mr. Scharf of Wells Fargo, you made some good comments 
about the mortgage banking, and there were comments today that 
mortgage banking has shifted to the non-bank sector.
    Do you think regulation had anything to do with that?
    Mr. Scharf. Congressman, I did say that there is a 
difference between the way banks and nonbanks are regulated. 
And there is no question that degree of regulation will impact 
your cost base, what you want to do inside your company.
    Mr. Hill. So when Dodd-Frank said that banks and bank 
holding companies couldn't do mortgage servicing rights, was 
that a bad provision in Dodd-Frank?
    Mr. Scharf. Congressman, I'm not aware of that provision.
    Mr. Hill. It caused all of you to divest your mortgage 
servicing portfolios, even though you're the largest one- to 
four-family mortgage lenders in the country. You had a natural 
hedge. But after the financial crisis, all of you were asked to 
lower that so you wouldn't be charged a capital surcharge on 
that.
    Was that a good idea or not? Does anybody else want to 
respond to that?
    Mr. Scharf. Congressman, I'll just keep going. We still 
have a large mortgage servicing asset.
    Mr. Hill. But you can't grow it.
    Mr. Scharf. The capital requirements are very specific on 
it. But it's up to us to determine how much of our capital we 
choose to put into [inaudible] versus something else.
    Mr. Hill. Okay. Thank you. If you have more on that, please 
follow up in writing.
    Mr. Dimon, the Fed has a dual mandate, price stability and 
growth of the economy, and we have had a proposal by the 
Majority here to add equity to the Fed's mandate.
    Should the Fed focus on its price stability mandate?
    Mr. Dimon. In my opinion, yes.
    Mr. Hill. And, Mr. Cecere at U.S. Bank, can you write a 
memo persuasively that you should have a living will, or do you 
think that's not necessary for a bank your size?
    Mr. Cecere. We have a living will on the resolution plan 
that has been reviewed by the FDIC for the past 10 years.
    Mr. Hill. And do you think the Fed should just leave it at 
that, or should they impose something different?
    Mr. Cecere. I think it's been successful. We have a very 
simple operation; 99 percent of our bank is within the holding 
company.
    Mr. Hill. Thank you very much.
    I yield back, Madam Chairwoman. Thank you.
    Chairwoman Waters. Thank you.
    The gentleman from Illinois, Mr. Foster, who is also the 
Chair of our Task Force on Artificial Intelligence, is now 
recognized for 5 minutes.
    Mr. Foster. Thank you, Madam Chairwoman.
    I would just like to touch briefly again on regulatory 
capital levels. I'm amazed at how consistent that your industry 
is; when you come to us, it is almost always with some 
elaborate set of logic to try to convince us that you should be 
allowed to lever out more.
    And it's interesting because if you--you probably have all 
been forced to learn all about the Modigliani-Miller theorem 
which says that the return on equity is independent of capital 
structure and, in particular, independent of leverage. So, why 
is it that you are always demanding higher levels of leverage?
    And I think part of the answer was well-analyzed at the end 
of the financial crisis, that you all benefit from having the 
Federal Government and the Federal taxpayer as the insurer of 
last resort.
    Under an extreme disaster, if one of the cities you do 
business with gets nuked, you're all insolvent, and you will be 
bailed out by the government. Now, that's okay, but the 
question is, how far out on the tail the government should 
assume that risk?
    And so the game that you will always be in is trying to 
allow you to lever up and expose the taxpayer to that risk, and 
our job will always be to push back against that and demand 
enough levels of regulatory capital that it's very unlikely 
that the taxpayer will be called upon to do that.
    Just a quick question: Do any of you believe that the 
higher capital, regulatory capital levels of Dodd-Frank have 
prevented you from having an extraordinarily-profitable decade?
    Let the record show that no one has indicated such. I think 
that's a very significant conclusion from the whole debate 
here.
    And I'd like to spend some time talking about secure 
digital ID and Know Your Customer (KYC) requirements.
    Mr. Demchak spoke eloquently about the difficulties of 
dealing with financial fraud, and a lot of that is identity 
fraud.
    Mr. Moynihan had a very unpleasant experience with the 
failure of the Federal Government or State Governments to have 
any kind of secure, reliable way of authenticating that you are 
who you say you are online, and exposing you to very high 
levels of fraud and having to do something quick and dirty and 
unfortunate in trying to fix that.
    This experience wasn't shared in countries where they had a 
secure and reliable way of proving that you are who you say you 
are online.
    And the EU--probably most of you do business 
internationally, and you're probably aware the EU has a very 
comprehensive roadmap for a secure digital ID that would allow 
you to, if you want, open a bank account. You walk into a 
branch. You get out your cell phone. You say okay. You get your 
passport, or whatever it is, or your REAL ID-compliant driver's 
license if it's in the U.S. that's on your cell phone, convince 
your cell phone that it's really you and someone hasn't stolen 
your cell phone, and with a pretty quick interaction, have a 
very secure way of proving that you are a single, legally-
traceable person.
    And there is a roadmap that's actually going to be rolled 
out by a number of States. Ironically, the technical standards 
behind those were all developed by the National Institute of 
Standards and Technology (NIST) in the United States, now 
adopted by ISO and being used in Europe.
    There are countries that you do business in, like Korea, 
where this is a reality today, you can use modern technology, 
use your cell phone effectively like a security dongle.
    What is your stance on this? What are the differences you 
see in the different countries in which you operate, some of 
which have secure digital IDs, and some of which are moving 
toward it? And what is your feeling about where the United 
States should be going on this?
    Mr. Demchak, we'll start with you.
    Mr. Demchak. Thank you for the question and for the thought 
that you clearly put into this.
    It is a big problem in our country, and I think we should 
move towards a digital ID. It's something that the banking 
industry is actually working towards today with a product 
called Authentify, where once you authenticate yourself with 
one bank, we can share that ID in any other service that you 
might want to use electronically.
    We have to get this sorted. Fraud is a massive problem. And 
our methods or historical ways to deal with this aren't 
working.
    Mr. Foster. Yes. And that's a very noble approach to deal 
with a serious problem.
    But I think that there is ultimately a real government 
function in issuing that authentication, and we have that in 
the REAL ID. We have that for physical ID. And there are 
standards that are being deployed in individual States.
    I'd just like to end with a shout-out to the Improving 
Digital Identity Act that we now have moving in both the House 
and the Senate. Senators Lummis and Gillibrand are behind it.
    And if we can get this across the finish line, at least on 
the government level, we will hopefully have something to avoid 
the nightmare that Mr. Moynihan's bank went through and at 
least have the government given a way to have citizens 
authenticate themselves.
    Thank you. I yield back.
    Chairwoman Waters. Thank you.
    The gentleman from Texas, Mr. Sessions, is now recognized 
for 5 minutes.
    Mr. Sessions. Madam Chairwoman, thank you very much.
    And to the panel that's in front of us, thank you for 
taking time to be here.
    Mr. Dimon, it's good to see you again.
    The opportunity that I think you have today has shown some 
light about how complex your businesses are, the varying 
attacks against you, the things that have happened to our 
country economically, the changes that are going on, and your 
ability to work with industry and others who are needing 
capital, and needing reassurance from you.
    During the pandemic, your employees did not close down 
their chance to go to work. Maybe some of you had different 
restrictions based upon where you live. But your employees went 
to work. People kept the business running. There was not a run 
on the bank. There was thoughtfulness that went on by each of 
you in your own way. The trillions of dollars that flowed 
through systems that you had to take and understand who your 
customers were and are.
    We are going through instances of monetary and fiscal 
policy changes too. We are watching with great caution what is 
going to happen next.
    But I want to take this time and tell you that I'm 
impressed. I'm glad we have big banks. I'm glad we have stable 
people. I'm glad we have professionals who get up and go to 
work, take care of the free enterprise system, and take care of 
large companies and small companies.
    I'm from Waco, Texas. Many of you are in Waco, Texas. It is 
now a destination of choice where people are moving. They're 
even opening up wealth offices there because people with money 
are moving there.
    But I want to thank you, because we need to hear from you 
as we are hearing today. And there are some specific 
questions--Mr. Foster had some questions, and others do. But we 
really look to you to be the capitalist leaders of our country. 
We look to you to stand for America.
    And I know certainly Citi and other people have done 
business in China for decades. You see things. You see a bigger 
viewpoint than we do.
    When you get in your car and leave today, I want you to 
feel like there are people who respect you. There are people 
who know you're in a tough place. There are people who know 
you're having trouble getting people to not just come to work 
but to learn the business.
    I appreciate you. I appreciate the hard work that you do. I 
know that what you do is picked at and looked at in different 
ways and second-guessed.
    Mr. Dimon, I know you've been the object of some 
challenges, and each of you have in your own way. But please 
know that we need you, that we should not run you out of 
business, we should not be onerous in what we do to you. We 
should give you the latitude.
    But you showing up today to me is an example of what kind 
of professionals you are, what kind of men and women are in the 
organizations that you represent, who represent you, who will 
be there tomorrow, and who do care about the challenges.
    And sox, we need to hear from you again. I hope you'll come 
back next year, and instead of putting us on the witness side, 
we'll put you on the witness side, but you'll really tell us: 
Here's the way we see the world and here's where we need to be 
the leading edge, the continued supporter of the dollar, and 
here are the things that we need to hear from you.
    So, I appreciate each of you.
    I want to thank the gentlewoman, the young chairwoman of 
our committee. I want to thank the gentleman from Arkansas for 
sitting in.
    But I want you to go back today and I want you to know that 
we need you, that you are the basis of how our nation can 
operate, and that we have so many other people in the financial 
services industry who are there because we need them too.
    So no questions, but a big thank you. I hope you'll go back 
and tell your employees that you appreciate them, just like I 
do my employees, at a time when America needs them the most.
    I yield back my time.
    Chairwoman Waters. Thank you very much. I thank the elderly 
gentleman for his participation.
    The gentlewoman from Iowa, Mrs. Axne, who is also the Vice 
Chair of our Subcommittee on Housing, Community Development, 
and Insurance, is now recognized for 5 minutes.
    Mrs. Axne. Thank you, Madam Chairwoman.
    And guaranteed I'll be asking some questions here, so get 
ready.
    I really appreciate all of you being here. Of course, it's 
nice to see you.
    But Mr. Scharf, I'm going to be concentrating on you today 
as you were here in March of last year, I believe. Now, you've 
been in that role for a period of time. So it's good to hear 
that we're going to be able to have a good conversation here.
    I want to focus on the 13,000 Wells Fargo employees in our 
district. We spoke here last year, as you mentioned. You said 
that you were going to make those folks a priority. We talked a 
little bit about some of the organizational structure pieces 
you were going to put in place and the ways you were going to 
engage employees. And I was very excited to hear about those 
things.
    But the news is very disconcerting at this time. There have 
been nine rounds of layoffs--notices--to more than 350 Iowans 
since April. From what I understand, that is due to a slow 
mortgage industry. Is that correct?
    Mr. Scharf. I believe that is correct, Congresswoman, yes.
    Mrs. Axne. Okay. Thank you.
    And last month, Bloomberg reported that Wells Fargo is 
planning a major retreat from its mortgage business, which, 
boy, I do not like the sound of those words. Those mortgage 
operations are, of course, one of the primary businesses in 
Iowa.
    Can you confirm whether that story is accurate? And can you 
discuss what will happen with the 13,000 Iowans that Wells 
employs if you shrink mortgage operations?
    Mr. Scharf. Congresswoman, first of all, as we have 
discussed, Iowa, Des Moines specifically, is a very, very 
important location for us. It has been for a long time, and I 
see that continuing to be the case for a long time to come. I 
don't see that changing.
    We do operate within businesses that are susceptible to 
market conditions. Volumes go up and volumes go down. The 
changes that we have seen in the mortgage business are the most 
significant changes we have seen, in the shortest amount of 
time, given the move in rates. So we, like all other mortgage 
companies, have had to take a look at our own infrastructure 
and ensure that it's sized properly.
    The first thing we do is we try and figure out if there are 
other roles inside the company that impacted employees can 
play. And I know that we have moved a significant number of 
employees from one division to another as we have gone through 
these changes in the mortgage business.
    The other thing I should just point out is the mortgage--
Des Moines began--I shouldn't say began. I think when we 
acquired a company that was in Des Moines way back, it was a 
mortgage business. And for quite a number of years, the only 
thing that we had in Des Moines was mortgage.
    That's not true today. We have large parts of the company 
that reside there. So, if you live there and you want a role 
elsewhere, it's quite likely that you'll be able to stay in Des 
Moines and play that other role.
    Mrs. Axne. That's good to hear. You still haven't answered 
the question.
    Can you confirm whether that is accurate, that you will be 
seeing a major retreat from the mortgage business?
    Mr. Scharf. Congresswoman, we have--
    Mrs. Axne. Yes or no?
    Mr. Scharf. Well, I don't--
    Mrs. Axne. Is it accurate?
    Mr. Scharf. I don't know how to define what a major retreat 
is.
    Mrs. Axne. Was Bloomberg correct when they said you're 
planning a major retreat out of the mortgage business? This is 
a really easy question.
    Mr. Scharf. No, it's not, Congresswoman--
    Mrs. Axne. Yes or no?
    Mr. Scharf. The mortgage market is substantially lower 
today than it was, and so we are significantly--
    Mrs. Axne. Okay. So, I'm not getting an answer.
    What I did think I heard from you is that with the 13,000 
Iowans, if I'm hearing you correctly, you will do everything in 
your possible power to find another job for them within the 
other parts of Wells Fargo that are located in Iowa. Is that 
correct?
    Mr. Scharf. Congresswoman, that is something that we do 
across the whole country, not just within Iowa.
    Mrs. Axne. Okay. We're going to have to follow up on this, 
because I'm still not getting a straight answer on what's going 
to happen to the tons of people in our district since you won't 
answer this question about what's happening. And what I don't 
want to see is all of a sudden, we wake up, and in the Des 
Moines Register, I have a thousand people lining up to make 
sure that they can get unemployment.
    And the other thing I want to make sure that we do is 
address Trade Adjustment Assistance (TAA) if there is going to 
be any conversation about moving jobs out of this country. 
Okay? We'll be in touch with you about that.
    Next, I just want to move on a bit, and this was good to 
hear. I saw some stories suggesting Wells would cover travel 
expenses for employees seeking abortion care.
    Our Iowa Governor Reynolds is attempting to push her ban 
through that she pushed through last time and was shot down, 
but she will now because of Roe v. Wade.
    Can you confirm if Wells is covering those expenses and how 
that will work for the workers?
    Mr. Scharf. Congresswoman, we have changed our plans so 
that abortion is consistent with other healthcare options, so 
that we will pay for the expenses of someone to cross State 
lines to get a legal procedure. And we have not worked out 
specifically, to my knowledge, exactly how that will work, but 
we can certainly share that with you.
    Mrs. Axne. Thank you.
    And one last question. Can you clarify if your commitment 
to remaining neutral and not interfering with employees on 
unionizing will be upheld?
    Mr. Scharf. Do you want me to answer that? Time is up?
    Chairwoman Waters. The gentlelady's time has expired.
    Mrs. Axne. Would he be able to answer that, Madam 
Chairwoman?
    Chairwoman Waters. We're going to continue with the rules 
that we have used all day.
    Mrs. Axne. Thank you. I'll follow up on that.
    Chairwoman Waters. The gentleman from Georgia, Mr. 
Loudermilk, is now recognized for 5 minutes.
    Mr. Loudermilk. Thank you, Madam Chairwoman.
    And thank you all for being here. I know that you have been 
anticipating and looking forward to this day for quite a while. 
We do thank you for taking time to be here.
    One of the issues that is paramount to me, and I think it 
is to a lot of people, is cybersecurity. Especially as we move 
more into a digital age, it becomes more and more imperative 
that we protect data, especially data of citizens, your 
customers.
    I come from an intelligence background in the military 
where I had a very high security clearance. We had one 
principle that we lived by, which is the best, that if you 
don't need data, don't keep it, because you only have to 
protect what you have. So if you don't absolutely need 
information, then you are to dispose of it.
    Part of my concern is the amount of data that you are 
required, not only to keep, but to pass on to the Federal 
Government, which, from what we have learned, becomes the weak 
leak in the cybersecurity protection chain. And that is a 
discussion for another day, whether it's revisions of the BSA 
and CTRs and SARs.
    The massive amount of data that is passed along that you're 
required to give to the Federal Government, the majority of 
which is never looked at, becomes a cybersecurity issue.
    But at the last several hearings that we have had with you 
and the CEOs of large banks, I have been one of the few 
Members, if not the only one, to bring up cybersecurity. And 
the reason I bring this up is not just with my interest, but 
I'm hearing from you that that is one of your top issues and 
concerns.
    Mr. Cecere, can you give us an update on cybersecurity 
threats in the banking industry that you're facing and maybe 
some things you're doing to address those?
    Mr. Cecere. Certainly. And I agree that cyber is one of the 
significant risks that we are all facing. I will also say that 
we're all working very well together. If we see a node that was 
attacking one of us, we make sure that we communicate with each 
other to make sure we're shutting it down as quickly as 
possible.
    I know that we all, including U.S. Bank, have made 
significant investments in cybersecurity, both from a personnel 
standpoint as well as an investment standpoint. We have doubled 
the staff in the last 2 years within our cyber group as well as 
the investment in spend.
    The reason for that is because it is such a significant 
risk. And I think it requires coordination among the banks, the 
regulators, and the government, and we're working hard on it.
    Mr. Loudermilk. Okay. Thank you.
    Mr. Rogers, I know that this is an area of concern for 
Truist, and if I may interject that that is the name of the 
home park of the World Series Atlanta Braves, but that aside, I 
know that cybersecurity is a serious concern for Truist as 
well.
    Can you discuss the threats that you're seeing and what 
Truist is doing?
    Mr. Rogers. Thank you for your focus on this, 
Representative. And I can add now playoff-bound Atlanta Braves, 
just to add to that distinction.
    It has been a big focus, and one of the reasons we merged 
was to create additional capacity to invest in things that are 
relevant for our clients, and relevant for our communities, but 
also in the protection of important data that we preserve for 
our clients.
    We have multiple, multiple thresholds that we analyze every 
day related to cyber. We hire third parties to come in and test 
and actually try to invade us at any particular time and test 
our particular forces. We participate in all of the industry 
things, including horizontal reviews by our regulators who are 
constantly looking at where we are relative to cyber.
    We have the capability to bring in talent and capacity that 
has exceeded what we could do before the merger.
    Cyber is clearly a focus for us, and one of the reasons we 
merged was to create a stronger shield for our clients.
    Mr. Loudermilk. Thank you for that.
    And while I have you, one of the things that Republicans 
have been working on and we're currently accepting feedback on 
is a draft bill that would finally establish a national 
consumer data privacy standard. We have to positively identify 
what data belongs to the consumer, what data belongs to the 
financial institution, et cetera, and protect that.
    Mr. Rogers, can you discuss why a national data privacy 
standard would help provide consumers with clarity about who 
owns their data, as well as those privacy issues?
    Mr. Rogers. Representative, I'm not exactly familiar with 
all of the intricacies of that particular bill. But the 
important part of data being owned by the client is critical, 
and that is how we approach data, is it's the client's data, 
not ours. It's our duty to protect the data.
    Mr. Loudermilk. Okay.
    Thank you, Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you.
    The gentlewoman from Ohio, Mrs. Beatty, who is also the 
Chair of our Subcommittee on Diversity and Inclusion, is now 
recognized for 5 minutes.
    Mrs. Beatty. First of all, let me say thank you, Madam 
Chairwoman, not only for this committee hearing, but for 
entrusting me to chair the Diversity and Inclusion 
Subcommittee.
    And let me say thank you to all of the witnesses, faces 
that I know. But for the record, my comments and questions are 
not divisive, nor are they a part of any political elections 
coming up.
    And I can clearly say that, because anyone who has followed 
me, met with me, or known me, using your words, I find myself 
to be the guardian of Dodd-Frank, especially Section 342, as 
well as diversity and inclusion, MDIs, especially coupled with 
protege banks, equity for those who are unbanked, racial 
disparity; the wealth gap, narrowing it, looking at CRA, and 
external contracts with asset managers, lawyers, et cetera.
    With that said, it was reported on April 20, 2022 by the 
GAO that there are some 7 million U.S. households that don't 
have bank accounts, and they gave three primary reasons.
    Does anybody know what those three reasons are?
    Let me share them with you. Number one, people believe that 
they don't have enough money. Number two, people believe that 
the fees are too excessive or complicated or they don't know 
how to access it.
    But number three is the lack of trust. And oftentimes that 
is because people don't see people who look like them or their 
community. That supports what I believe in.
    Now, let me tell you some good news. Every one of you 
sitting here has met with me. On June 16th, I had the 
opportunity to spend more than an hour with every one of you. 
In addition to that, many of you, as recently as yesterday, 
brought staff, and walked me through your changes.
    I'm going to applaud you for that, and let me tell you why. 
But for this chairwoman pushing the envelope, maybe having 
subpoena power, but making sure that she was consistent. If 
we're going to talk about justice, if we're going to talk about 
democracy and fairness, then we can't get to all of the other 
things, whether it's intelligence, whether it's cybersecurity, 
if you don't reflect the people who put all those dollars into 
your bank.
    Buying homes, and everything that they are doing comes back 
to what I believe in and what I stand for.
    You have moved the needle, and that's what I asked you to 
do. You sucked before that. And many of you still have a lot of 
work to do.
    But I am going to give you credit, because I really don't 
believe but for this committee, you would have been in here. I 
really don't believe that you would have been as serious and 
intentional, not just the window dressing that you've done for 
years, not impressed with us saying, go hire people, and then 
you go hire 40 or 50 people. And none of those people report to 
you. None of those people have an opportunity to go into the 
boardroom. But now, we are moving the needle.
    Now, don't get too excited. We have a lot more work to do. 
But I do believe in rewarding people who are moving the needle, 
because that's what I asked you to do.
    It gets much tougher as we go along because once you move 
the needle--I'm a clinical psychologist by trade--it means that 
now I should be able to look at your board and see that same 
type of diversity.
    Congressman Green asked you about the future, and that was 
really good, but I want to talk about the present. How many 
people have someone who would represent diversity, who reports 
to you?
    We didn't have that, Chairwoman Waters, before you 
established this subcommittee.
    How many people have taken a D&I or someone into their 
board of trustees room and did a report on D&I? We did not have 
that before this committee.
    So if you could move the needle now, part two, which starts 
tomorrow, is that I'm going to give you a bigger needle to 
move.
    But I want to say thank you for being here. And I'm going 
to tell you something. We aren't just beating up on you and 
asking you to do these good things. You are making America 
better. And it means you can do much more.
    We have done the same thing to asset managers. Yesterday, 
we brought in the largest insurance investment companies, and 
they did not do so well.
    So, we're going to use you as a benchmark. Now, we will set 
the needle higher.
    And I want to know how many people are going to make a 
commitment to come back, to continue to do this and to continue 
to move that needle.
    Let the record show, Mr. Green, that they all raised their 
hands, and I'm going to hold them accountable.
    Thank you. And I yield back.
    Chairwoman Waters. Thank you very much.
    The gentleman from West Virginia, Mr. Mooney, is now 
recognized for 5 minutes.
    Mr. Mooney. Thank you, Madam Chairwoman.
    Despite its initial resistance, leftist activists 
successfully pressured the International Organization for 
Standardization and major credit card companies to adopt a new 
merchant category code for firearm retailers which they say can 
be used to flag lawful gun purchases and target law-abiding 
citizens.
    Merchant category codes, or MCCs, are typically used to 
identify merchants by the goods or services they provide.
    West Virginia, the State I'm blessed to represent, is one 
of the most pro-Second Amendment States in the country. Nearly 
60 percent of West Virginians have firearms in their homes--
which is, frankly, why it's one of the safest States in the 
country, because guns actually protect and save lives, despite 
what the left says about it.
    Mr. Rogers, I would just say, Truist Bank services over 
260,000 West Virginians. There has also been talk of using this 
new data to flag what they call, ``suspicious purchases.''
    To me, it seems like a straightforward way to target gun 
owners without actually helping to prevent crime. In fact, the 
opposite is true. The more folks avail themselves of their 
constitutional right to the Second Amendment, the less crime 
you have.
    My question is what, in your mind, constitutes a, 
``suspicious transaction?'' And what additional information 
does this new code really provide for you to make that 
determination?
    Mr. Rogers. Thank you, Representative, for that question.
    As we discussed earlier, this is a developing area at this 
particular time. Our positions will follow the rules that are a 
part of this system. But as of today, we'll also protect all 
the laws, and protect the rights of our consumers in terms of 
reporting.
    I can't speak to exactly what will be required in terms of 
reporting, but it won't be something that we'll do on a 
voluntary basis.
    Mr. Mooney. Thank you for that response.
    A follow-up question: My constituents now may consider 
purchasing firearms with cash instead of a credit card out of 
fear of what the Federal Government might do with their data.
    Who decides which merchants fall under a merchant category 
code? And does Truist Bank plan to go back and re-code 
businesses and past purchases that may now most closely fall 
under the new merchant category code?
    Mr. Rogers. Representative, we don't control the merchant 
codes. That's not actually a decision that Truist makes.
    Mr. Mooney. Okay. Great.
    In closing, I just want to say that never before have we 
seen an Administration weaponize financial regulators and 
pressure lenders to push its agenda like we've seen with the 
Biden Administration. I fear this is one step closer to a 
backdoor gun registry. Banks and corporations must resist this 
political pressure.
    The best thing we can do to help our constituents and all 
Americans is competition, free-market competition between your 
banks, and between small banks. That's the way you get better 
service for all.
    We have to make a choice in this country. My mother fled a 
communist country. She left Cuba when she was 19-years-old. And 
you have a choice between--in this country, some are pushing 
socialism. And what socialist countries like Russia do is they 
invade other countries, because their economy is a total 
disaster, because socialism does not work. So, they go try to 
gobble up other countries.
    We have to make a basic choice between freedom and free 
markets and capitalism in this country or socialism. There are 
those pushing socialism constantly. It has failed everywhere it 
has been tried.
    I think our role as Americans should be to push free 
markets; reject socialism; reject, frankly, government control 
of people. Let people be free to make their own choices. Don't 
target them.
    Thank you for your participation today.
    And I yield back.
    Chairwoman Waters. The gentleman from Florida, Mr. Lawson, 
is now recognized for 5 minutes.
    Mr. Lawson. Thank you very much, Madam Chairwoman.
    And I'd like to again, as everyone else has, welcome all of 
the witnesses to our committee today.
    And my first question is to the whole panel.
    For the U.S. to be strong economically, and to compete 
globally, we need a strong U.S. financial system. When you 
compare U.S. banks to the rest of the world using International 
Financial Reporting Standards (IFRS), the largest four banks 
are all Chinese. And they are working around the globe to 
expand their strength and influence.
    What are some of the most significant challenges that U.S. 
banks face when trying to compete with banks around the globe? 
And this is to the whole panel.
    Chairwoman Waters. Mr. Lawson, are you addressing that to 
any of our witnesses?
    Mr. Lawson. I'll just say to the whole panel.
    Mr. Moynihan. Why don't I start, Madam Chairwoman?
    As Mr. Dimon said earlier, the near-term competitiveness of 
the Chinese banking system is an issue, but the longer-term 
competitiveness is the real issue.
    These institutions are the top four in the world. They 
decide the economic issues in the country of China right now. 
They've made substantial amounts of money. And they are 
developing the techniques to compete on a worldwide basis to 
support, in particular, the multinational client base of the 
world outside the country of China.
    I think it is something to be concerned about. And frankly, 
they can operate in the U.S. under the current rule set, and 
they could acquire many of us without much problem, in terms of 
financial resources to do it.
    Mr. Lawson. Is there anyone else who would like to comment 
on that before I go to another question?
    Ms. Fraser. I would.
    Mr. Lawson. Go ahead.
    Ms. Fraser. It's Jane Fraser from Citi. Thank you very much 
for the question, Congressman.
    I would add in that, when our banks are brought abroad, 
many of us are supporting American multinationals abroad and 
their competitiveness. Scale matters in supporting these 
companies. And they also result in jobs in America and the 
support of the economy here.
    So, for that not to be operating on American rails could be 
problematic in terms of safety, security, cyber, privacy, and 
many of the themes that we've been discussing at today's 
hearing. It's better on American rails than on others'.
    Mr. Lawson. Okay. Thank you very much.
    And I have another question for the panel.
    In 2021, a report from Freddie Mac demonstrated that homes 
in Black and Hispanic neighborhoods are much more likely to 
receive appraisal values below the ones that are in majority 
White neighborhoods.
    After taking into account the differences in home and 
neighborhood quality, racial biases lead to the valuation of 
homes in majority Black neighborhoods at 23 percent less than 
those in other neighborhoods with fewer or no Black residents.
    Are any of your banks using alternative traditional 
appraisals, like automated valuation models, as a means of 
reducing the prevalence or the impact on appraisal values?
    And I want to say this to you. In a lot of the--and I'll 
just use as an example an area in Florida, and break it down a 
little bit to the area--and I need to hurry up, because I'll 
probably run out, because I want to have y'all--and, let's say, 
in the area of Tallahassee in Florida, many of the young 
graduates who are coming out of school seem to go into Black 
neighborhoods to try to rebuild them, but they are having a 
problem because the banks don't want to finance those 
mortgages, and say, why don't you go someplace else, so to 
speak. But that's how you can improve the community.
    But I just want to know, are you all using any alternative 
valuation model for appraisals so that the young ones coming 
out--and I'm going to just cut it right there--will be able to 
get mortgage financing?
    Mr. Demchak. Thank you, Congressman. I'll speak to that 
very quickly.
    We use alternative models, alternative sources of payment 
where we see past rental payments and so forth, to do that. 
That's easier to do when we own the mortgage or the home 
equity, whatever the case may be, than it is to do inside of 
the Fannie Mae, Freddie Mac, or Ginnie Mae programs. The 
government programs don't support that.
    Mr. Lawson. Okay.
    With that, Madam Chairwoman, I yield back. I have a lot 
more questions, but I'll just submit them for the record.
    Chairwoman Waters. Thank you very much.
    The gentleman from Ohio, Mr. Davidson, is now recognized 
for 5 minutes.
    Mr. Davidson. Thank you, Madam Chairwoman. And thanks to 
our witnesses and to my colleagues. I appreciate having this 
hearing.
    A few years ago, we saw a few large banks adopt a policy of 
refusing cash deposits. Is accepting cash deposits a liability? 
And, if so, is it more of a market risk or a regulatory bank 
secrecy risk?
    Anyone?
    Mr. Dimon?
    Mr. Dimon. You're reminding me of something from years ago. 
I do believe it was a regulatory risk that made us very 
cautious about accepting cash deposits, particularly 
interstate.
    Mr. Davidson. Mr. Scharf?
    Mr. Scharf. I don't have anything to add.
    Mr. Davidson. The regulators have intimidated the banks--
the megabanks, as my chairwoman likes to refer to y'all--to the 
point where no one will even speak about taking cash.
    Are permissionless payments a risk to this financial 
system? Permissionless, like cash, like I can give a person 
cash. Whether it's cash or some sort of electronic payment, is 
a permissionless, peer-to-peer transaction some sort of threat 
to the financial system?
    Mr. Dimon. No.
    Mr. Davidson. No? Okay. That's good to hear. I was getting 
a little nervous.
    And it's hard, because a lot of people still deal in cash. 
When we talk to people who don't necessarily use your bank 
about some of the barriers to people using the financial sector 
at any size or scale, they're still transacting in the cash 
economy.
    And as people become more nervous about whether it's 
government or just surveillance capitalism, the idea that 
everybody needs to know everything about every transaction and 
everyone else--we have a couple of colleagues who are really 
passionate about digital identity. You basically have to 
background-check somebody to even talk to them. People are kind 
of opting out of that, and they're choosing using cash.
    I think that's a big factor in the crypto space. And just 
by a show of hands, does your bank custody any crypto assets 
for any level of client?
    Not much.
    So, not much change there. There are a lot of regulatory 
challenges that have made that hard as well. And certainly, 
we've worked, some of us have, for years to remedy that.
    Our financial markets--we are home to about 5 percent of 
the world's population, almost 25 percent of the world's GDP, 
but roughly 50 percent of the world's invested capital in 
capital markets. Unfortunately, in the crypto space, roughly 70 
percent of the liquidities are offshore. I think that's a 
burden for this body here in Congress, to provide regulatory 
clarity in those things.
    And I'd just note the, I guess, hesitancy for titans of 
industry, people in the financial sector, literally atop the 
sector, to address some of these issues. And I think it's a 
concern when we look at regulators, the power the regulators 
have over the sector.
    And, frankly, one that I think was a win of sorts was not 
seeing Saule Omarova confirmed for the Office of the 
Comptroller of the Currency. No one made President Biden 
nominate her, or Senator Sherrod Brown give her high praise and 
walk her around the Senate and try to get her confirmed. But 
she's someone who described herself as radical and held 
fundamentally different views on the banking industry, going so 
far as to suggest that the Federal Reserve or even the Postal 
Service should be retail banking outlets.
    Mr. Dimon, do folks who have no industry experience and 
only academic experience have a hard time understanding 
soundness and risk in the private sector?
    Mr. Dimon. I would love to see the Federal Reserve be in 
the retail banking business and running call centers and 
operating centers and ATMs and branches and hiring and all that 
kind of stuff.
    And I would love to see more people who are not academics 
and lawyers and economists in a lot of jobs in Washington, D.C. 
There's a great quote: ``In theory, practice and theory are the 
same. In practice, they're not.'' I think the country would 
benefit greatly from something like that.
    Mr. Davidson. Yes, I have been concerned, because I think 
the median--there was a study that showed the median years of 
private-sector experience in the Biden Administration is zero. 
And hopefully, the next few years change that.
    Ms. Fraser, as I have just a few moments left, your bank 
does a lot with sanctions--as do all of yours. But, if you look 
at the international aspects of it, the Office of Foreign 
Assets Control (OFAC), when you look at the opportunity to 
improve that, the way that the system is done causes a little 
bit of collateral damage for domestic companies.
    Do you have any ideas on how we could reform that? And if 
you can't finish your answer, could you please send something 
in writing to our office about your experience?
    Ms. Fraser. I'd be delighted to. It will involve 
international collaboration.
    Mr. Davidson. Thank you.
    Chairwoman Waters. I wish we had time for more correction 
of information that's being given about the banks and cash. 
However, we must move on.
    The gentlewoman from North Carolina, Ms. Adams, is now 
recognized for 5 minutes.
    Ms. Adams. Thank you, Madam Chairwoman. And thank you for 
hosting today's hearing.
    To our witnesses, thank you. I am particularly glad to see 
some folks from back home: Charlie Scharf from Wells; Bill 
Rogers from Truist; and Brian Moynihan from Bank of America. 
Thank you all for being here, and everyone else as well.
    But I do want to get right to it. And I'd like to ask you 
to keep your remarks around 30 seconds so we can hear from 
everyone. And this question is to each of the witnesses.
    As you all may know, I am founder and co-Chair of the 
Bipartisan Historically Black Colleges and Universities (HBCU) 
Caucus, and through that caucus, and through the Congressional 
Black Caucus (CBC), we've helped secure historic wins for 
Historically Black Colleges and Universities (HBCUs). So, I'm 
grateful that several of you here today have taken our 
Partnership Challenge. Some of you, like Truist and Wells 
Fargo, have endorsed our signature legislation, the IGNITE HBCU 
Excellence Act. Thank you for doing that.
    This, by the way, is HBCU Week, and the White House 
initiative is pushing that as well.
    But my question is, I want to know--and please be as 
detailed as you can--what is your long-term plan to engage 
with, to support, and to recruit from HBCUs? And how are you 
evaluating the effectiveness of your external recruiting 
efforts and internal pipeline programs?
    Mr. Scharf, let's start with you.
    Mr. Scharf. Sure. Thank you, Congresswoman, and thank you 
for your leadership in this area. It's extraordinarily-
important work, and we're proud to be a part of a lot of your 
leadership efforts.
    The HBCUs, for us, are just an incredibly important 
relationship. And it's multifold, from the things that we do to 
support the HBCUs, to the things that we get out of the HBCUs, 
including just the broad-based talent in locations across the 
country. And we have had just outstanding experiences with some 
of our incredibly senior folks across the company who are 
products of the HBCU system.
    Ultimately, what we will look at is the success factor that 
we have in keeping the folks that we bring on from the HBCUs, 
and, ultimately, the level of seniority and the scope of the 
roles that they carry inside our company.
    Ms. Adams. Okay.
    Let me move on. Mr. Rogers? And we want to really keep it 
to 30 seconds if we can, okay? Thank you.
    Mr. Rogers. Again, thank you for your great leadership in 
this area as well.
    And, similarly, we are investing--and we've invested as 
much as $20 million recently--in HBCUs in terms of direct 
investment, but also in the important work that we do in hiring 
HBCU graduates, and we're committed to increase our hiring of 
HBCU graduates.
    And then, working on using the resources that we have in 
our company. And as you have participated in our Leadership 
Institute, using it to help educate and provide leadership 
training in the HBCU community. And things like the Tech 
Summit, which we've supported together.
    So, using our own resources and working in partnership with 
HBCUs, I think is what's important to me.
    Ms. Adams. Great. Thank you.
    Mr. Dimon?
    Mr. Dimon. I've been going to HBCUs for 30 years. We hire 
100 kids a year now. We just recruited four. We now recruited 
20. We help finance them, we help grow them, and we hire a lot 
of their kids.
    I would tell anyone that the talent is unbelievable. I've 
been to many of them, I've been to six or seven now--
extraordinary talent. And my advice to anyone who's looking for 
young Black kids who want to be successful, go to an HBCU if 
you think you can't find any.
    Ms. Adams. That is where you can find them.
    Ms. Fraser?
    Ms. Fraser. Thank you very much for the question.
    I think, like our other colleagues on the panel today, 
we're very proud to be working with the HBCUs. Our CFO at Citi 
is the Vice Chair at Howard and puts tremendous passion into 
making sure that we have broader programs to bring in and 
recruit and grow and develop the talent that we bring in from 
the HBCUs. And I think, similar to what you've heard today, 
it's wonderful talent. And we're proud to give opportunities in 
our company, to the benefit of the company as much as the 
individuals.
    Ms. Adams. Thank you, ma'am.
    Mr. Moynihan, we just have a few more seconds.
    Mr. Moynihan. Sure.
    I think, along with the hiring that we have continued to 
increase across time, along with the fiscal support of 
contributions to HBCUs, endowments and budgets for helping 
build them out, which was $25 million over the last few years, 
on top of that, the other thing we've done is created an 
entrepreneurial center in Atlanta between the two HBCUs, 
Spelman and Morehouse, which, to get them to work together was 
kind of interesting, but we were able to create an 
entrepreneurial center that's--
    Ms. Adams. Thank you, sir.
    Mr. Moynihan. --going to be quite successful.
    Ms. Adams. I apologize. I'm out of time. And we'll be 
watching.
    Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you so very much for all of the 
work you do with the HBCUs, Ms. Adams. We appreciate that. And 
the proof of the pudding is in the eating. Thank you.
    The gentleman from Ohio, Mr. Gonzalez, is now recognized 
for 5 minutes.
    Mr. Gonzalez of Ohio. Thank you, Madam Chairwoman.
    I'm going to do a little macro/micro. Mr. Dimon, I'm going 
to ask you some macro questions; and Mr. Moynihan, more on the 
micro side.
    Mr. Dimon, you've been outspoken about the state of the 
economy, global economy, and some of concerns.
    I'm going to define a soft landing, just for the purposes 
of this, as a mild recession with limited financial stability 
risks, and a hard landing as a prolonged recession, two-plus 
quarters, with heightened stability risks. Keep that in mind.
    From a policy standpoint, what are you most concerned about 
or what do you believe needs to happen to avoid the hard-
landing scenario?
    Mr. Dimon. I think the sooner that the Federal Reserve gets 
their hand around inflation so we avoid stagflation--that is 
the worst outcome, is inflation with no growth and 
unemployment. And that hurts the most people and the most 
businesses, et cetera.
    And second is to make sure we have a secure energy policy 
so that oil prices don't skyrocket. Energy is precarious. If we 
see it at 150, it will cause a global recession.
    Mr. Gonzalez of Ohio. How confident are you in the Fed's 
ability do that?
    Mr. Dimon. I'm keeping my fingers crossed.
    Mr. Gonzalez of Ohio. Yes. Me, too.
    In the event of a hard landing, where do you believe the 
economy is most vulnerable, from a financial stability 
standpoint?
    Mr. Dimon. The consumer, going into a recession, is 
actually in rather good shape, particularly compared to 2008 
and 2009, and businesses are in rather good shape. I think if 
you have a hard landing, you'll see a fairly traditional effect 
on financial stability.
    I don't think that's the issue. I think the real issue is 
global stability relating to Ukraine and China and kind of more 
forward-looking. The financial industry here can easily handle 
the hard landing.
    Mr. Gonzalez of Ohio. I agree with you on--and this is a 
comment now for everybody, I guess--the China piece for sure. I 
would encourage your banks to be a lot more thoughtful about 
the role that you all play in facilitating the Chinese economy.
    They rely on U.S. capital markets to grow their economy. We 
know that they are no friend of ours. And when you talk about 
global stability, it's Russia and China that are posing the 
greatest threats, by far, and I don't believe it's even close.
    Mr. Moynihan, I want to switch to you, and get back to the 
consumer. Your retail consumers, how do you feel they are today 
from a health standpoint? And then, in the event of a hard 
landing, what are you most concerned about at, sort of, the 
retail level?
    Mr. Moynihan. Sure.
    If you look at where the consumer stands today, they have 
more money in their accounts, as my colleague said earlier, 
they have borrowing capacity left, the employment rate is very 
low, and their wages are rising. Working against them are 
inflation price increases that will eat up part of that 
increase, and also unemployment. At the end of the day, we 
haven't seen unemployment move.
    The question is, can the Fed tighten strongly enough to 
choke off inflation without creating such high levels of 
unemployment? And that's the discussion you have in the 
probability of having a hard landing and a soft landing.
    And the view is, we all hope that the balance can be 
restored to the system. But it needs to be restored, because 
right now it's not in proper balance after the last couple of 
years and the fiscal stimulus and monetary stimulus and all of 
those things.
    The consumer is spending 10 percent more in September than 
they did last September, and they have multiples of money in 
their accounts now than pre-pandemic, and they're employed, and 
they're earning more. Right now, it's okay. The question is, 
what happens to them?
    And that's always going to come down to: If they're 
working, they'll be fine. At the end of the day, no matter what 
kind of loan they have--car, home, credit card, you pick it--if 
they're working, they're fine.
    And I think the issue is to actually get labor markets to 
be less tight. You're going to have to work--the Fed knows that 
the unemployment is probably going to rise, so the question is, 
can they guide it to the right place and not have it go too 
far?
    Mr. Gonzalez of Ohio. Yes. And that's the disaster 
scenario, right? That's, definitionally, the hard landing. The 
only tool the Fed has right now is to destroy demand, which 
would drive inflation up--or, I'm sorry, unemployment up and 
put the consumer at enormous risk.
    Mr. Dimon, back to you for one final macro question. The 
Fed has a dual mandate, as you know--maximum employment and 
stable prices. Do you have an opinion on whether the dual 
mandate is appropriate? Or would you consider moving us to 
simply stable prices?
    Mr. Dimon. I would say it's appropriate, but it should be 
monitored.
    Mr. Gonzalez of Ohio. Thank you.
    With that, I yield back.
    Chairwoman Waters. Thank you very much.
    At this time, we will take a brief recess to--
    Mr. Green. Madam Chairwoman?
    Chairwoman Waters. Yes?
    Mr. Green. I have a unanimous consent request. I have a 
special purchase credit program question that I'd like to 
submit to all of the members of the panel.
    Chairwoman Waters. Without objection, it is so ordered.
    Mr. Green. Thank you.
    Chairwoman Waters. We will take a brief recess to allow 
Members to vote on the House Floor. We will resume immediately 
following votes.
    And let me just say to all of the witnesses, I appreciate 
your patience with the work that we are doing today. You may 
want to take this as a time to grab some lunch.
    The committee will stand in recess. Thank you.
    [recess]
    Mr. Lynch. [presiding]. The committee will come to order.
    The Chair now recognizes the gentleman from Guam, Mr. San 
Nicolas.
    You're recognized for 5 minutes. Welcome.
    Mr. San Nicolas. Thank you so much, Mr. Chairman. Can you 
hear me okay?
    Mr. Lynch. Loud and clear, yes. Thank you.
    Mr. San Nicolas. Thank you, Mr. Chairman.
    I want to first begin by recognizing Ms. Fraser and 
Citigroup. The conversation I'm going to have actually involves 
all of the panelists, but I wanted to begin with her company 
and herself, as, based on our research, it looks like Citigroup 
pays 5 times more in interest to its depositors than the rest 
of the individuals sitting at the table.
    Ms. Fraser, is it correct that your deposits are currently 
yielding a .05-percent interest rate?
    Ms. Fraser. We have a variety of different deposit 
products, and we believe them to be competitive and fair.
    Mr. San Nicolas. The information I have here on your basic 
account package is a .05-percent interest rate. Is that 
correct?
    Ms. Fraser. We do have one of our deposit products that has 
that. That is correct.
    Mr. San Nicolas. And for the rest of the panel, is it fair 
to say that my numbers here are accurate, that the remainder of 
you are paying about 0.01 percent on deposits?
    Mr. Demchak. That is inaccurate.
    Mr. San Nicolas. Could you please clarify, then, for me the 
figure?
    Mr. Demchak. Yes. Our base account pays about the same as 
Citigroup's, at 5 basis points or so, but we have many products 
that pay substantially more, and it varies. But I don't know of 
any that pay zero.
    Mr. San Nicolas. Okay. Can we just clarify this? Just go 
across the panel from left to right? And just on the record for 
the American people, tell us what your basic standard savings 
deposit is currently yielding in your institutions.
    Mr. Chairman? I'm waiting for the panel to respond.
    Mr. Lynch. Let's go from left to right.
    Mr. Cecere?
    Mr. Cecere. We have a variety of products that range from 5 
basis points to over 200 basis points, depending upon the size 
of the deposit as well as the tenor of the deposit.
    Mr. San Nicolas. Yes, but the general public accounts is 
what I'm talking about. The majority of your deposits, what are 
they yielding right now?
    Mr. Cecere. The general retail deposit would be at that 
lower end of that range. And then, there are also CDs available 
for term deposits that approach 3 percent.
    Mr. San Nicolas. Sure.
    I don't have a lot of time. Can we just go across the 
panel, please, Mr. Chairman?
    Mr. Lynch. Okay.
    Mr. Demchak?
    Mr. Demchak. We're the same. Five basis points at the lower 
end, with different products yielding more, depending on 
several factors.
    Mr. Lynch. Thank you.
    Mr. Dimon?
    Mr. Dimon. We're pretty much the same as everybody else 
here.
    Mr. Lynch. Ms. Fraser?
    Ms. Fraser. Yes, we're in the same range.
    Mr. Lynch. Mr. Moynihan?
    Mr. Moynihan. We have a range of products that would cover 
the same ranges as my colleagues have spoken about.
    Mr. Lynch. Mr. Rogers?
    Mr. Rogers. We have a very similar approach.
    Mr. Lynch. Mr. Scharf?
    Mr. Scharf. I believe we're in the same range.
    Mr. San Nicolas. Thank you. Thank you so much, Mr. 
Chairman.
    As inflation is battering our public, and as interest rates 
are rising and causing credit card interest rates to go up and 
general consumer interest rates to go up, it's just an across-
the-board devastation for the American public.
    We have had it on the record earlier today that there is, 
``more money in their accounts,'' in all of these financial 
institutions. In other words, there are a lot more deposits 
being held by these financial institutions as interest rates 
are rising.
    One of the only silver linings in a rising-interest-rate 
environment is that savers are supposed to be rewarded for 
their savings. They're supposed to see the interest that they 
earn on their savings accounts go up.
    And yet, what we have here is a Fed Funds Rate that is 
currently, Mr. Chairman, at 2.5 percent--on the record, a Fed 
Funds Rate of 2.5 percent--with our depository institutions 
paying between .01 percent and .05 percent, which means that on 
risk-free money being put to the Fed, they're making anywhere 
between 2.45 percent interest to 2.49 percent interest on the 
deposits of their customers.
    And so, I wanted ask quickly, Mr. Chairman, can they 
confirm whether or not they are going to be increasing the 
interest rate that they're paying to their depositors any time 
soon?
    Mr. Lynch. Mr. Cecere, you heard the question?
    Mr. Cecere. Yes, I did. Thank you.
    We would expect to continue to monitor rates and raise 
rates as appropriate given what's going on with the Fed as well 
as our competition.
    Mr. Lynch. Mr. Demchak?
    Mr. Demchak. The same. We'd expect us to raise them over 
time.
    Mr. Lynch. Mr. Dimon?
    Mr. Dimon. We expect them to go up soon.
    Mr. Lynch. Ms. Fraser?
    Ms. Fraser. Yes, we will.
    Mr. Lynch. Mr. Moynihan?
    Mr. Moynihan. Rates will go up in the future with this rate 
structure.
    Mr. Lynch. Thank you.
    Mr. Rogers?
    Mr. Rogers. Yes, we'll be raising them.
    Mr. Lynch. And Mr. Scharf?
    Mr. Scharf. Yes, the same.
    Mr. Lynch. Thank you.
    Mr. San Nicolas. I yield back, Mr. Chairman. Thank you.
    Mr. Lynch. Thank you.
    The gentleman's time has expired.
    The Chair now recognizes the gentleman from North Carolina, 
Mr. Budd, for 5 minutes.
    Mr. Budd. I thank the Chair.
    On, ``60 Minutes,'' on Sunday, President Biden tried to 
downplay the negative impact of 40-year-high inflation. He 
basically said that 8.3 percent inflation isn't that bad 
because it hasn't spiked recently.
    As you also know, the second quarter's GDP was negative for 
the second consecutive quarter, which is the textbook 
definition of a recession. Of course, President Biden is trying 
to deny this as well.
    Now, as the leaders of financial institutions that deal 
directly with American consumers every day, I'd like to ask you 
some brief questions to gauge the financial health of the 
average American consumer. And I'll just stick with the--for a 
lack of time, I'll stick with the North Carolina institutions, 
if you would, please, Mr. Rogers of Truist, and Mr. Moynihan of 
Bank of America. And just brief answers, if you would. It could 
be yes or no or just a sentence or less.
    Are consumers' savings decreasing?
    Mr. Rogers. Consumer savings are actually stable at this 
particular juncture, after having grown for quite a few months.
    Mr. Budd. Mr. Moynihan?
    Mr. Moynihan. The consumer deposits are stable.
    Mr. Budd. Are they using more credit now than they were a 
year ago?
    Mr. Rogers. Consumers are starting to access more credit, 
particularly in their credit cards.
    Mr. Budd. Mr. Moynihan?
    Mr. Moynihan. Credit card balances have grown since the 
last year but aren't back to pre-pandemic levels yet.
    Mr. Budd. So, when you factor in inflation, are consumers' 
real wages down?
    Mr. Rogers?
    Mr. Rogers. If you factor in inflation, for most consumers, 
I believe real wages would be down.
    Mr. Budd. Real wages are down. Thank you.
    Mr. Moynihan?
    Mr. Moynihan. On a 1-year basis, the inflation rate exceeds 
the wage growth.
    Mr. Budd. Okay.
    Has the number of consumers with access to, say, $1,000 for 
an emergency, gone up or down?
    Mr. Rogers. Consumers currently have more in their checking 
accounts, and the opportunity to have an emergency savings 
account has actually increased during the last few years.
    Mr. Budd. Mr. Moynihan?
    Mr. Moynihan. Consumer deposits in their accounts are 
multiples of where they were pre-pandemic.
    Mr. Budd. Do you think the economy will get worse before it 
gets better?
    Mr. Moynihan? Let's switch it around. Mr. Moynihan first.
    Mr. Moynihan. I said earlier that our experts have positive 
GDP growth for this quarter, and then negative GDP growth for 
the next couple of quarters. That's their base assumption, of 
the research team that we have.
    Mr. Budd. Mr. Rogers?
    Mr. Rogers. We have a very similar forecast.
    Mr. Budd. Thank you.
    We see that the state of our economy is not good. President 
Biden's failed economic policies have made life worse for 
working families in North Carolina and across the country.
    According to the Federal Reserve Bank of St. Louis, the 
personal savings rate has been declining since March of last 
year, and it's the lowest since 2008.
    A recent survey said that 60 percent of respondents have 
been in more credit card debt over the last year.
    And, according to the Federal Reserve Bank of New York, 
household debt surpassed $16 trillion for the first time ever 
in the second quarter.
    According to the Census Bureau, median household incomes 
have remained stagnant or have declined 2 years in a row.
    According to Bankrate, 56 percent of Americans cannot cover 
a $1,000 emergency expense with savings anymore.
    A recent ABC News poll found that 69 percent of respondents 
said that they think the U.S. economy is getting worse.
    Bottom line: Americans are buying less, earning less, and 
saving less, while paying more for their daily lives. It's what 
I see in all 100 counties in North Carolina. Life seems to have 
gotten worse under President Biden, and I believe that it's 
time that he admits it.
    Thank you all for your time.
    I yield back.
    Chairwoman Waters. Thank you.
    The gentleman from Illinois, Mr. Casten, who is also the 
Vice Chair of our Subcommittee on Investor Protection, 
Entrepreneurship, and Capital Markets, is now recognized for 5 
minutes.
    Mr. Casten. Thank you, Madam Chairwoman.
    And thank you all for being here on this long day.
    I want to just start with a statement that I think is 
obvious, but all of you do a wonderful job. And I appreciate 
your work to minimize the risk of loss to your equity capital 
while still honoring your obligations to shareholders to 
maximize return. If any of you disagree with that statement, 
please chime in. But I want to start, just because I want to 
focus on risk and return.
    Two years ago, Mr. Dimon, Ms. Fraser, Mr. Moynihan, and Mr. 
Scharf, in a Senate Banking Committee hearing, Senator Warren 
asked you, and you all, I believe, essentially acknowledged 
that you were, ``using new tools and services to gauge climate 
risk to your portfolios.''
    I could put the question to all of you, but I want to focus 
on you, Mr. Scharf, because I think you have the largest 
mortgage book. In the 2 years since, have you changed your 
lending, your diligence standards for properties that are 
exposed to climate risk--wildfires, forest fires? You've had 2 
years to gauge those risks. Have you changed your lending 
standards in those regions?
    Mr. Scharf. Congressman, it's something that we talk a lot 
about, and we've always factored some of those risks into the 
properties that we've financed. And it continues to be 
something that we talk about. Whether or not we've specifically 
changed the magnitude of that, I can't answer right now.
    Mr. Casten. Okay. And I don't mean it as a critical 
question. There's been some data suggesting that there's a 
disproportionate flow of those mortgages to Fannie Mae and 
Freddie Mac in those high-risk areas. And if you don't know off 
the top of your head, we can follow up offline. But there has 
been a lot of reporting on that, and I'd like to see the data, 
because it's obviously a concern if we're moving risks onto the 
taxpayers.
    Mr. Scharf. We can certainly go back and look at the data 
and share it with you.
    Mr. Casten. Okay.
    Shifting to the return side of the question, Mr. Dimon--
this might be a dumb question, but I'm sure you'll tell me if 
it is--would you support legislation that compelled you to 
preferentially invest in industries that were struggling to 
attract capital?
    Mr. Dimon. I would not.
    Mr. Casten. Okay. I assumed that would be your answer.
    I ask that because, over the last 12 years, the entire oil 
and gas E&P sector is running at about a seven-times multiple. 
And NextEra Energy, Tesla, FirstEnergy, all of the sort of 
leading lights of the clean-energy space, are running at 10 
times that number, for the most part. And yet, we are seeing a 
lot of my colleagues suggest that we should prevent the 
financial sector from investing in areas that are getting high 
returns, out of some completely bastardized theory of, ``woke 
capitalism,'' whatever that means.
    The State Financial Officers Foundation, a right-wing-
backed group, is intentionally promoting that. They are pushing 
State legislation across the country. And as recently as July, 
West Virginia's treasurer announced that he was canceling 
hundreds of millions of dollars in State contracts to five 
banks, including yours and Wells Fargo.
    I think you said that their analysis was disconnected from 
the facts. And I think Wells Fargo said that they disagreed 
with the decision.
    Subsequent to that, Federated Hermes has announced that 
they are no longer going to fund this group. As of a few weeks 
ago, JPMorgan and Wells Fargo were both funding the State 
Financial Officers Foundation. It's not listed on the website 
anymore.
    Are you still providing resources to this organization that 
is spreading policies that are encouraging you to invest in 
places that are struggling to attract capital?
    Mr. Dimon. I don't know the answer to that, but I'll be 
happy to get back to you, and I'll look at it if I can.
    Mr. Casten. Okay.
    Mr. Scharf, is Wells Fargo still supporting the State 
Financial Officers Foundation?
    Mr. Scharf. I don't know the answer, but I'm glad to take a 
look at it.
    Mr. Casten. Can either of you commit, while we're here, 
that you will not continue to fund an organization that is 
spreading disinformation, that is blocking the capital sector 
from freely allocating capital?
    Mr. Dimon. I won't commit until I read something, but if 
that is true, we probably would cancel it.
    Mr. Casten. Mr. Scharf?
    Mr. Scharf. I agree with Mr. Dimon.
    Mr. Casten. Okay. As we look at their website today, the 
only people supporting this are groups with active agendas.
    I want to see you continue to minimize equity risk. I want 
to see you continue to earn shareholder returns. And I want to 
leave a better planet for our kids than the one that our 
parents left us. And I would hope that you'd all work together 
with us on that.
    Thank you, and I yield back.
    Chairwoman Waters. The gentleman from Indiana, Mr. 
Hollingsworth, is now recognized for 5 minutes.
    Mr. Hollingsworth. Good afternoon. I'm excited to be here 
with each of you.
    Before I get started on my questions, Mr. Moynihan, I 
wanted to let you know--Sruthi? Raise your hand, Sruthi. She 
has been my team member for a couple of years now, but on 
Monday she becomes a Bank of America team member, about which 
she is very, very excited. So, I hope you'll take good care of 
her and know and recognize the talent that she has shown 
already in our office. I'm sure she'll do the same at Bank of 
America.
    Mr. Moynihan. We will do that. And her father already works 
for us, so--
    Mr. Hollingsworth. Oh.
    Mr. Moynihan. --he'll take care of her.
    Mr. Hollingsworth. You should have told us. Well, good.
    I appreciate the opportunity to chat about some of these 
issues today. What I'm really interested in is the state of the 
economy, and Mr. Budd touched a little bit upon this, but I 
want to delve deeper into this.
    We are, as of today, at a truly unprecedented pace 
unwinding the quantitative easing as well as the accommodative 
monetary policies of the last couple of years. Although the Fed 
continues to talk about soft landing, I worry that this pace 
will lead to a harder landing than perhaps they are yet 
forecasting.
    But there are a couple of ballasts to that: first, very, 
very strong corporate balance sheets. Earnings have been 
relatively resilient, but balance sheets are better than 
they've ever been in the S&P 500. Second, household balance 
sheets are better than they have quite literally ever been. And 
you all touched on this a little bit, but one thing that I 
continue to notice is the tremendous amount of savings that 
households have in excess of the savings they had in 2019.
    Have you begun to see households mobilizing that or not 
begun to see them mobilizing that? Because I think this is 
really important to real, underlying economic demand going 
forward. In the face of some of the extra costs that are being 
incurred, are we seeing them dip into those savings?
    And, with all due respect to Mr. Budd, there's a difference 
between a decline in savings rate and a decline in the level of 
savings.
    I'm curious, and maybe I'll start with you, Mr. Moynihan, 
and then I'll ask Mr. Dimon and Ms. Fraser about the same 
thing.
    Mr. Moynihan. The consumers at Bank of America have 
multiples of the amount of money they had pre-pandemic and that 
amount is stable right now. It had been growing for the last 
year-and-a-half. Since the last stimulus, it grew, and kept 
growing. It went up a little bit in tax time, came down a 
little bit after tax time, came down a little bit when they 
paid for vacations, and now it's back up. So, it's basically 
stable.
    Mr. Hollingsworth. Understood.
    Mr. Moynihan. And we measure that and we put out data about 
it from our institute every month so that you can see it.
    Mr. Hollingsworth. Understood. Thank you.
    Mr. Dimon?
    Mr. Dimon. The consumer currently is in very good shape.
    Mr. Hollingsworth. Yes.
    Mr. Dimon. High savings. Jobs available. Wages going up at 
the lower end. Even with debt going up a little bit, it's so 
much lower than it was before. Debt-service ratios are lower 
than they've been in 50 years.
    So, even if we go into a recession--but you have to ask 
later, not right now. That's the good news, which is now. The 
bad news is later.
    Mr. Hollingsworth. Right.
    Mr. Dimon. And it's coming.
    Mr. Hollingsworth. Got it.
    Ms. Fraser?
    Ms. Fraser. I think, similarly, it's always a little 
dangerous to talk about averages rather than what we see across 
the spectrum. But stability in the deposits, still elevated 
levels of spending, and, equally importantly, still low credit 
losses across-the-board.
    Mr. Hollingsworth. I would assume any controller or CFO 
worth their salt has spent the last couple of years locking in 
very low rates and extending out their maturity ladders to 
ensure they don't face upcoming maturities.
    Are any of you seeing any stress in corporates yet with 
higher rates? No? Not even in PE, sponsor, kind of high-
leverage scenarios?
    Mr. Dimon. Not actual stress, but spreads are way up. And 
the markets. The markets--
    Mr. Hollingsworth. Yes.
    Ms. Fraser. Again, I--
    Mr. Moynihan. --for those types of credits, but--
    Mr. Hollingsworth. It's harder to transact today?
    Mr. Moynihan. Yes.
    Mr. Hollingsworth. Okay.
    One of the things that we continue to talk about up here is 
ensuring that we are investing enough in research and 
development. We want to maintain the significant competitive 
advantage we have in developing new technologies, whether 
that's at research institutions across the country or in very 
innovative, smart companies across the country.
    One of the things we have noticed is that venture capital 
funding is declining dramatically. In some estimates, there's a 
trillion-dollar gap between what we've funded in the last 5 
years and what we're likely to fund in the next 5 years. And 
some of that is reluctance of companies to recognize valuations 
today versus what they might have been even 6 months ago.
    But I wondered if you've seen an uptick in earlier-stage 
venture-backed funds seeking loans instead of equity, given 
some of the transactions and the values that they're seeing 
versus what they were before?
    Does anybody want to comment on that?
    Ms. Fraser. We haven't seen evidence of it yet, but it is 
early days.
    Mr. Hollingsworth. Yes.
    Mr. Dimon. They generally don't borrow money. So, you're 
not going to see a lot of that.
    Mr. Hollingsworth. Indeed, but I had heard that more were 
inclined to do so rather than recognize significant down-rounds 
in their equity valuations.
    With that, I yield back, Madam Chairwoman.
    Chairwoman Waters. Thank you.
    The gentlewoman from Massachusetts, Ms. Pressley, who is 
also the Vice Chair of our Subcommittee on Consumer Protection 
and Financial Institutions, is now recognized for 5 minutes.
    Ms. Pressley. Thank you, Madam Chairwoman, for holding this 
critical hearing and for ensuring that oversight remains a 
priority for this committee.
    While we have the CEOs in front of us, I do want to take 
just a moment, for the official record, to center on that which 
is most important, and that is the workers, from the bank 
tellers who wear a smile day in and day out, processing 
hundreds of transactions, to the custodial staff who keep 
facilities clean and safe. Too often, I think their labor is 
lost in these hearings, or, worse, used as cover-up talking 
points. Your workers deserve better, and they deserve to be 
respected.
    Mr. Scharf, workers at Wells Fargo have been advocating for 
a greater voice on the job for years. For the record, will you 
commit to neutrality in the workers' organizing effort and 
ensure that workers who speak out do not face retaliation? And 
I'm looking for a yes-or-no response.
    Mr. Scharf. We believe that we're best--
    Ms. Pressley. Yes or no?
    Mr. Scharf. --having a direct relationship with them.
    Ms. Pressley. Is that a yes or a no?
    Mr. Scharf. That is--
    Ms. Pressley. Will you commit to neutrality in the workers' 
organizing effort and ensure that workers who speak out--
    Mr. Scharf. We will--
    Ms. Pressley. --do not face retaliation? It's really easy. 
Yes or no?
    Mr. Scharf. We will follow the law--
    Ms. Pressley. Okay.
    Mr. Scharf. --but we will encourage our--
    Ms. Pressley. I'm going to reclaim my time. I was looking 
for a yes or no on whether or not you would commit to 
neutrality in the workers' organizing efforts and ensure that 
workers who speak out do not face retaliation.
    After years of scandals and billions of dollars in fines, 
you owe your employees accountability. If there had been a 
union at Wells Fargo, then perhaps the toxic policies and 
behaviors driving these scandals would not have gone unchecked 
for so long.
    I introduced the Greater Supervision in Banking Act to 
shine a light on working conditions for employees, from pay 
equity to accountability for workplace harassment. Congress 
must pass this bill to support workers. My bill would also 
require transparency on meaningful consumer protections.
    Now, I've been having a hard time really keeping track of 
the various illegal actions that have taken place by those 
represented here on this panel, including your own bank, Mr. 
Cecere, so let's establish a few things for the record.
    On July 28th of this year, the Consumer Financial 
Protection Bureau (CFPB) announced that your bank had illegally 
accessed customers' credit reports and opened checking and 
savings accounts, credit cards, and lines of credit without 
those customers' permission.
    Mr. Cecere, how many accounts were opened without 
customers' permission?
    Mr. Cecere. Thank you for the question.
    First, we sincerely regret and take full responsibility 
that even one customer account would've been opened in an 
inappropriate fashion. It's against not only our standards and 
procedures but it's against our core ethics as an organization.
    This relates to a 5-year opportunity with the CFPB that 
dates back to 2010. And, during that timeframe, we've 
identified 342 accounts--
    Ms. Pressley. Thank you.
    Mr. Cecere. --which represents .001 percent of accounts 
opened in--
    Ms. Pressley. So, 342 accounts. Okay.
    Mr. Cecere. Yes.
    Ms. Pressley. And that was actually going to be my next 
question. Do you take full responsibility for these violations 
of the law?
    Mr. Cecere. We do. It's not what--
    Ms. Pressley. Thank you.
    Mr. Cecere. --we seek to do. And we've remediated almost--
    Ms. Pressley. Thank you. You should. Thank you.
    As the CFPB's investigation certainly did tell a disturbing 
top-down story of failure, your bank imposed sales goals on 
employees as part of their job requirements while knowing that 
this pressure was leading employees to unlawful behavior.
    Based on reports, I believe if your employees had had the 
opportunity to collectively bargain and improve their working 
conditions, consumers would not have been exploited. And that's 
not limited to just your recent scandal. It goes for every bank 
present.
    Again, for the record, I would like a response from the 
entire panel. For all witnesses, please raise your hand if you 
are willing to commit to noninterference in any of your 
employees' efforts to organize a union.
    And I'll begin from right to left here, my right.
    Mr. Cecere, yes or no?
    Mr. Cecere. We believe in dealing directly with the 
employees. And we welcome feedback--
    Ms. Pressley. Sir, could you just raise a hand? I'm sorry, 
I'm running out of time, 50 seconds. Will you raise a hand if 
you agree to not interfere.
    Mr. Cecere. We would not retaliate or interfere.
    Ms. Pressley. Okay. You can raise your hand then.
    Mr. Demchak, can you raise your hand if you're willing to 
commit to noninterference in any of your employees' efforts to 
organize a union.
    I don't need to go one person at a time. This is an easy, 
easy, easy question. Please raise your hand--
    Mr. Demchak. I don't think I can raise my hand to that. We 
wouldn't interfere with our--
    Ms. Pressley. Okay. I'll keep going.
    Mr. Cecere--
    Mr. Demchak. --employees on anything. And, importantly--
    Ms. Pressley. --you're committing to noninterference.
    Mr. Demchak, you are not.
    Mr. Dimon?
    Mr. Dimon. I would interfere.
    Ms. Pressley. Okay. Thank you for your transparency on the 
record that you will interfere.
    Ms. Fraser, will you interfere? A show of hands or yes or 
no?
    Ms. Fraser. We certainly will not retaliate, but we will 
expect to have an active conversation with--
    Ms. Pressley. Okay. I'll take--
    Ms. Fraser. --with our employees.
    Ms. Pressley. --that as a yes. Thank you for your 
transparency for the record. Thank you, Ms. Fraser.
    Mr. Moynihan, will you interfere?
    Mr. Moynihan. We will deal directly--
    Ms. Pressley. Sorry. I'm running out time. Show of hands, 
gentlemen. Mr. Scharf, Mr. Rogers, Mr. Moynihan, could you 
raise your hand--
    Mr. Moynihan. We will not retaliate.
    Ms. Pressley. --if you agree to not interfere?
    Mr. Moynihan. I thought I answered the question. We will 
agree to abide by the law, and we will not retaliate against 
employees. And it's not a simple question.
    Ms. Pressley. Mr. Rogers?
    Mr. Rogers. We would listen to our teammates and not 
retaliate.
    Ms. Pressley. Mr. Scharf, yes or no?
    Mr. Scharf. We will listen and not retaliate.
    Ms. Pressley. Okay. Your workers are watching, and they 
deserve accountability.
    Thank you, Madam Chairwoman, and I yield back.
    Chairwoman Waters. Thank you.
    The gentleman from Tennessee, Mr. Rose, is now recognized 
for 5 minutes.
    Mr. Rose. Thank you, Chairwoman Waters, and Ranking Member 
McHenry, for holding this hearing.
    And I think it's important that we conduct oversight of the 
nation's largest banks, particularly in this climate where many 
are bending to progressive activists and declining to provide 
access to financial services for legally-operating businesses.
    Mr. Dimon, you previously testified before the committee in 
May 2021 that there are certain areas where you have, ``cut 
back,'' because, ``the risk, legal or regulatory, is too high 
to do business.''
    I have become aware of bank denial letters that JPMorgan 
and, for the record, others of the banks here today have sent 
to independent ATM operators, where JPMorgan states that they 
have a policy in place where the bank does not bank private ATM 
operators.
    And, Madam Chairwoman, I would like to enter into the 
record an article from The Wall Street Journal from February 
19th of this year that's entitled, ``Gas-Station ATMs Are a 
Banking Battleground.'' The subtitle: ``Banks worried about 
risk are turning away the owners of independent ATMs, a 
lifeline to the underbanked.''
    Chairwoman Waters. Without objection, it is so ordered.
    Mr. Rose. Thank you very much.
    A previous iteration of the Federal Financial Institutions 
Examination Council's (FFIEC's) Bank Secrecy Act Manual 
categorized the entire independent ATM industry as high risk.
    The new version, released in December 2021 after the 
hastening of many Members on a bipartisan basis of this 
committee, now states that, ``not all independent ATM owner or 
operator customers pose the same risk, and not all independent 
ATM owner or operator customers are automatically higher 
risk.''
    Additionally, as hopefully you're all aware, on July 6th, 
all of the FFIEC agencies issued a statement saying that 
independent ATM operators are not categorically high risk.
    And, again, Madam Chairwoman, I'd like to enter a copy of 
that statement for the record.
    Chairwoman Waters. Without objection, it is so ordered.
    Mr. Rose. Mr. Dimon, why is the bank still categorically 
denying access to financial services for an entire legally-
operating industry?
    Mr. Dimon. I don't like it when I hear that we're doing the 
whole industry, because I think that's a mistake. You should 
evaluate each customer one by one and determine whether risk is 
high. I don't know if that's true, and I have to get back to 
you on it. I do know there's one large one we stopped banking.
    Mr. Rose. Okay. I appreciate that.
    And I guess my next follow-up question was, would you 
commit to taking a look at the bank's policy with respect to 
this class of customers?
    Mr. Dimon. Of course.
    Mr. Rose. Thank you.
    And to save time, for the record, I would appreciate if the 
rest of you would also respond to the question of whether 
you'll take a fresh look, in light of this new guidance, at 
whatever policies you have in place with respect to this class 
of customers. Would you all commit to giving us a review of 
your policies on that?
    Very good.
    I'm concerned about this issue in a broader context, which 
is, other places where your banks are not banking legally-
operating businesses. It is an area of heightened concern. And 
I hope you all will be mindful of how important that is, 
particularly when you're serving customers and are lifelines to 
financial services for the underbanked. Thank you for that 
commitment.
    Mr. Moynihan, I want to shift gears for a moment. In 2019, 
at Fortune's inaugural Brainstorm Finance conference, you said 
that you want a cashless society and that Bank of America has 
more to gain than anybody if we were to eliminate cash as a 
payment option.
    Mr. Moynihan, this may be difficult for you to empathize 
with, but I can assure you that in my district, not everyone 
has access to financial services. I bet you have a bank 
account--I do, as well--and can readily access funds to pay for 
goods and services, but not everyone has that luxury. If you 
eliminate cash and cash options to pay for food and other 
necessities, you end up making it more difficult to survive for 
our most-vulnerable populations.
    I'm wondering if you and Bank of America--why do you think 
it is okay to make it more difficult to be poor? What would you 
tell someone who gets their pay in cash and who walks into a 
grocery store that does not accept cash under your ideal 
society?
    Mr. Moynihan. Sir, I think--a couple of things.
    One is, between today and tomorrow at this time, $200 
million will go out of the ATMs as our company cash. The idea 
of eliminating cash is when people don't need to use cash, and 
it's safer and more secure. And we have multiple means to do 
it.
    Anybody can get a bank account at Bank of America if they 
have proper identification, for $5 a month, which allows them 
to get cash out of the ATMs, to go into any branch, and to do 
anything you or I could do there.
    I think the context of that was, how do we save money in 
the industry for people like yourself or companies in terms of 
moving cash and accepting cash?
    Mr. Rose. Thank you.
    I yield back, Madam Chairwoman.
    Chairwoman Waters. The gentleman from New Jersey, Mr. 
Gottheimer, who is also the Vice Chair of our Subcommittee on 
National Security, International Development and Monetary 
Policy, is now recognized for 5 minutes.
    Mr. Gottheimer. Thank you, Madam Chairwoman.
    And thank you to all of the witnesses for being here.
    The financial services and banking industry directly 
supports more than 75,000 jobs in New Jersey, and provides 
local small businesses with the capital they need to create 
thousands more. I want you to know that I'm grateful, and I 
thank you for doing business in New Jersey.
    Mr. Dimon, if I can start with you, please. Thanks for 
being here and for all of the important work JPMorgan does to 
support thousands of New Jersey jobs.
    I believe more New Jersey residents who work in New York 
should have the option to stay and work in New Jersey if they 
can, to support our local small businesses, spend more time 
with family, and save on gas and parking in New York.
    Staying in New Jersey also means stopping New York's 
proposed outrageous congestion tax plan. The Metropolitan 
Transit Authority's (MTA's) congestion tax will cost commuters 
$23 a day and, by the MTA's own admission, shift pollution and 
congestion to New Jersey and the outer boroughs. This tax hike 
is unaffordable for many New Jersey residents and will hurt 
nurses, restaurant workers, and others in mass-transit deserts 
who have no choice but to commute into New York City.
    I just wanted to get your sense, if you would, on what you 
think of MTA's congestion tax proposal. And do you think 
there's something that we should reconsider, given how hard it 
will hit hardworking families?
    Mr. Dimon. I honestly have not really looked into it. I've 
read about it. And if it hurts certain groups 
disproportionately, we should look at it. It has worked in 
other citiies and there may be ways to ameliorate the people 
who get hurt by it.
    Mr. Gottheimer. I appreciate that. Yes. We're very 
concerned about the impact it's going to have on hardworking 
families, and that it will actually cause more congestion and 
pollution.
    Ms. Fraser, if I can turn to you for a second, I'm working 
with New Jersey legislators to create tax incentives for New 
York businesses to open up new regional hubs in northern New 
Jersey to allow workers who would normally commute to New York 
to stay and work in New Jersey.
    If the MTA moves forward with things like their proposed 
congestion tax hike, would you consider expanding your offices 
in New Jersey for this purpose of allowing people to have more 
regional flexibility to work?
    Ms. Fraser. We very much appreciate how expensive it's 
getting for our people to commute. We're very mindful around 
that, as well as being flexible for working families and 
providing them more options. Additional facilities and spaces 
for them to work, either at home or in New Jersey or in 
Connecticut, are certainly things that we've been looking at 
actively in the tri-State area.
    Mr. Gottheimer. Thank you. And thank you for the, I think, 
6,000 jobs you have in New Jersey. Thank you.
    Mr. Dimon, if I can ask you one other question, I'd like to 
ask about another topic that I've been very focused on, which 
is the rapid development of digital assets and related 
financial technology.
    I believe the United States should leave the development of 
emerging technologies like distributed ledgers and blockchain 
and the Federal Government should provide the certainty needed 
for the country to serve as a hub for financial innovation. And 
I've developed legislation to help define qualified 
stablecoins, which I know the chairwoman and the ranking member 
are also working on, and to select the appropriate regulator.
    I've read that you're a little skeptical of some of these 
new technologies, but what are the biggest things keeping you 
from being more active in this space? And do you worry that we 
would miss the boat and give other nations, like China, an 
opportunity to advance their digital currency and other payment 
systems that could undermine the U.S. dollar? I'd love to get 
some of your thoughts on that.
    Mr. Dimon. You have to separate blockchain, which is real; 
DeFi, which is real; ledgers; tokens that do something and 
deliver information, money, ideas, simplify smart contracts. 
That's one thing. I'm not a skeptic.
    I'm a major skeptic on crypto tokens, which you call 
currency, like bitcoin. They are decentralized Ponzi schemes, 
and the notion that that is good for anybody is unbelievable. 
We sit here in this room and talk about a lot of things, but $2 
billion has been lost? Every year, $30 billion in ransomware, 
AML, sex trafficking, and stealing. It's dangerous.
    There would be nothing wrong with a stablecoin that was 
properly regulated like a money market fund. You have some of 
them today and they are not.
    JPMorgan was a big user of blockchain. There's a JPMorgan 
coin, which is a token, but if you send it to us, we give you a 
U.S. dollar. It's a dollar deposit. It can be moved just the 
way cryptocurrencies can be moved. Stable value, very low cost.
    Mr. Gottheimer. Thank you so much.
    Mr. Scharf, I have a bill called the Stablecoin Innovation 
and Protection Act, which would create guardrails for 
stablecoins and ensure they're backed one-to-one with cash or 
equivalents to prevent runs like we saw with the so-called 
stablecoin, Terra, earlier this year.
    Do you think that might be a step in the right direction? 
Have you considered this?
    Mr. Scharf. That's certainly an option in order to ensure 
that people understand the underlying value of that stablecoin.
    Mr. Gottheimer. Mr. Dimon, how do you feel about 
protections like that more clearly defining what a stablecoin 
is, and making sure that it's backed one-to-one?
    Mr. Dimon. It's equivalent to a money market fund. You 
should look at it exactly the same way in terms of disclosure, 
backup, gates, and a whole bunch of different things.
    Mr. Gottheimer. Thank you.
    And thank you all, again, for being here. We are all very 
grateful. Thank you.
    Chairwoman Waters. Thank you very much.
    The gentleman from South Carolina, Mr. Timmons, is 
recognized for 5 minutes.
    Mr. Timmons. Thank you, Madam Chairwoman.
    And thank you all for being here. There are so many of you. 
And you are very kind to take time out of your busy, busy days 
to come and testify before us here today.
    Earlier in this hearing my colleague, Congressman 
Luetkemeyer, I thought took a pretty fascinating line of 
questioning with you all. I don't want to rehash that, but I do 
think it's worth discussing the economic relationship between 
the United States and China.
    Our two countries are obviously competing in a multitude of 
ways, economically, geopolitically, et cetera. But it really is 
more than that. It's also a clash of civilizations. And it's a 
clash of autocracy versus democracy. It's a clash between a 
command economy and capitalism. And I think we all realize the 
vastness of the Chinese market and how lucrative it may appear 
to you all, but there is a cost of doing business there.
    And as my colleague said earlier, for the time being, China 
is the CCP and the CCP is China. They control everything. 
Culturally, the Chinese Government views it as their obligation 
to give Chinese businesses a competitive advantage in the 
global economy through a variety of avenues.
    When you are doing business in China, in many, if not most 
instances, you are also doing business with the Chinese 
Communist Party.
    Mr. Dimon, can you speak to this competition between our 
country and the West more broadly with China, and what you see 
as your institution's role, and other similar global 
institutions in that competition being? And if China becomes 
the dominant economic power in the world, which is no doubt 
their goal, what do you think will be the consequences for free 
enterprise?
    Mr. Dimon. America--you have to do a full comparison--we 
have all of the food, water, and energy we need. They don't. We 
have the Atlantic and Pacific Oceans and wonderful neighbors in 
Canada and Mexico. They are the most complex region of the 
world. They have the negatives of autocracy. They have a huge 
amount of corruption. They don't have our financial system. 
They don't have our innovative society. They don't have the 
gifts the Founding Fathers called free enterprise.
    And so I think before Americans panic about it, we should 
be very thoughtful.
    But you are absolutely correct, this relationship for the 
next 50, 100 years is the most important in the world. And if 
America wants to make the next century our century, we have to 
be very careful around strategic, economic, trade, and all of 
those issues that really matter.
    I think it's very important that you understand that the 
American Government sets foreign policy. The American 
Government does not want American business to disengage from 
certain parts of the world because it probably would be a bad 
idea. And policy is diplomatic, development, aid, economic, and 
America should negotiate what it's very comfortable with.
    And almost everyone at this table will do what we are asked 
to by the American government. That's what we want to do. And 
we do, obviously, talk to them quite a bit about this issue, 
because it's just as important to me as it is to you and your 
constituents.
    Mr. Timmons. Sure. Thank you for that.
    Ms. Fraser, do you have any thoughts?
    Ms. Fraser. When we look at the clients that we serve, many 
of them are multinational clients in China. And we see that 
there is a high degree of interdependence, as we have 
experienced and the Europeans have experienced as they have 
tried to decouple the Russian economy from the Western 
economies.
    So I think as we look forward, we have to take a strategic 
view in America as to where it is that we need more strategic 
independence and to build that in a thoughtful manner, but also 
in a way that doesn't cause economic crises along the way.
    I'm obviously not in a position to comment on the broader 
factors.
    Mr. Timmons. Sure. Thank you.
    I just have serious concerns that the way that the Western 
world, the way that Western democracies united against the 
Russian aggression in Ukraine and the economic sanctions that 
were placed upon Russia and the military aid that was given to 
Ukraine--and things seem to be going in the right direction 
there--my concern is that China was watching and learned what 
the West is not going to tolerate, and that there is a way to 
try to thread the needle in a moment of what I would argue is 
weakness for our country.
    And I'm just afraid that if something happens in Taiwan, 
not only will the Western democracies not unite, but the global 
economy will not step forward and defend our allies in Taiwan.
    I'd just keep that in mind as developments progress over 
the coming months.
    And with that, Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you.
    The gentleman from New York, Mr. Torres, is now recognized 
for 5 minutes.
    Mr. Torres. Thank you, Madam Chairwoman.
    A few months ago, The New York Times wrote an article 
called, ``Fraud is Flourishing on Zelle. The Banks Say It's Not 
Their Problem.''
    The article features the story of Bruce Barth, who was in 
the hospital for COVID-19 when a thief stole his phone, 
accessed his digital wallet, ran up charges on his credit card, 
took cash out of the ATM, and made a money transfer via Zelle.
    Bank of America reimbursed Mr. Barth for losses associated 
with his credit card and the ATM, but not with the losses 
associated with Zelle. According to the article, after being 
contacted by The New York Times, Bank of America ultimately 
relented and reimbursed Mr. Barth for the losses associated 
with Zelle.
    Since the episode with Mr. Barth, my question for Bank of 
America is, has Bank of America adopted a policy of reimbursing 
Bank of America Zelle customers for losses caused by 
unauthorized users or fraud?
    Mr. Moynihan. We have a policy where we, if a client of 
ours sends money to another client in defraud, we will take 
care of that because we shouldn't have let the other person in. 
And, frankly, that's the kind of work we are doing as an 
industry.
    I think just--you weren't here earlier, but the context of 
Zelle fraud is it's lower than check at our company, claims for 
fraud.
    And so, we are working hard as an industry to take the 
fraud out of the system among all of us by working together, 
because inside the Zelle platform it's another bank customer, 
and we actually kick banks out of Zelle who don't have the 
capabilities to assess--
    Mr. Torres. I just want to make sure I'm understanding the 
answer, though. If there are losses caused by an unauthorized 
user or by fraud via Zelle to a Bank of America customer, in a 
situation like Mr. Barth's, would you reimburse them?
    Mr. Moynihan. If it's a situation of what they call Me-to-
Me, an account transfer between a customer and a customer, we 
will reimburse. And then across the industry, we work with our 
other colleague institutions to do the same thing.
    Mr. Torres. What if the victim is only a customer?
    Mr. Moynihan. Then, the other institution where the money 
went tries to recover it, and we work it through. We reimburse 
a lot of the fraud.
    Mr. Torres. The headline says: ``The Bank Says It's Not 
Their Problem.'' The headline suggests that the banks deny--
    Mr. Moynihan. I will tell you categorically--
    Mr. Torres. Let me ask my question. I have to reclaim my 
time.
    The article claims that the banks deny that it's their 
responsibility. I just want to ask all of the owners of Zelle, 
do you acknowledge that your bank, as a partial owner of Zelle, 
has a responsibility for combating fraud on Zelle and 
reimbursing Zelle customers for losses caused by unauthorized 
users and fraud?
    Mr. Moynihan. Let me be precise--
    Mr. Torres. I'm going to start with U.S. Bancorp.
    Mr. Cecere. Yes. If the customer's credentials were stolen, 
and they do not transact, we will reimburse in that situation.
    Mr. Torres. Thank you for that clear answer.
    PNC?
    Mr. Demchak. Yes. You are describing a traditional fraud 
that is covered under Reg E, and we would cover that, yes.
    Mr. Torres. JPMorgan?
    Mr. Dimon. Unauthorized is generally covered.
    Mr. Torres. And I don't think Citibank is an owner of 
Zelle, but do you want to try to give me a clear answer?
    Mr. Moynihan. I gave you one. Unauthorized transactions are 
covered. You asked for something else.
    Mr. Torres. Mr. Rogers?
    Mr. Rogers. Unauthorized transactions are covered.
    Mr. Torres. Mr. Scharf?
    Mr. Scharf. Same. Unauthorized transactions would be 
reimbursed.
    Mr. Torres. I have a question about cybersecurity.
    With the Russian invasion of Ukraine comes a high-end 
threat of cyber retaliation from Russia. Has your bank seen an 
escalation in cyber attacks on the financial services sector?
    I will start with U.S. Bancorp.
    Mr. Cecere. We have not. We heightened our alerts, but we 
have not seen any indication of an attack.
    Mr. Torres. PNC?
    Mr. Demchak. The same.
    Mr. Torres. JPMorgan?
    Mr. Dimon. I have to give the United States Government 
credit for working closely with the banks. We expected a lot, 
but we have not seen a lot, just a very little bit. But that 
doesn't mean it's over.
    Mr. Torres. Citigroup?
    Ms. Fraser. We have not seen that in the United States.
    Mr. Torres. Bank of America?
    Mr. Moynihan. We haven't seen a major increase, but the 
question is, what happens next?
    Mr. Torres. Truist?
    Mr. Rogers. We have not seen a major increase specifically 
related to that.
    Mr. Torres. Wells Fargo?
    Mr. Scharf. The same answer as my colleagues.
    Mr. Torres. And I'm just curious, what's the size of your 
budget for cybersecurity in each of your banks?
    PNC?
    Mr. Demchak. I don't know off the top of my head. I would 
assume it's close to the size of U.S. Bank's.
    Mr. Torres. JPMorgan?
    Mr. Dimon. $700 million directly, and a lot more 
indirectly.
    Mr. Torres. Citigroup?
    Ms. Fraser. I'm the same, almost $800 million.
    Mr. Torres. Bank of America?
    Mr. Moynihan. Roughly $1 billion, and a lot indirectly with 
our partners.
    Mr. Torres. Truist?
    Mr. Rogers. Several hundred million dollars, directly and 
indirectly.
    Mr. Torres. And Wells Fargo?
    Mr. Scharf. Approximately $700 million to $800 million.
    Mr. Torres. And my time is about to expire.
    Thank you.
    Chairwoman Waters. Thank you very much.
    The gentleman from Texas, Mr. Gooden, is now recognized for 
5 minutes.
    Mr. Gooden. Thank you, Madam Chairwoman.
    I want to start by thanking you all for being here.
    And, thank you, Mr. Scharf. The last time we had a Wells 
Fargo CEO come before us here, it didn't go well. You've done a 
tremendous job with your institution, and I want to 
congratulate you. Thank you.
    I had some follow-up to a lot of the conversations we had 
on China earlier today.
    I will start with you, Ms. Fraser.
    Citi's former global head of corporate and investment 
banking praised the Chinese Communist Party's Belt and Road 
Initiative. In fact, he said, ``Citi's strategy is directly 
associated with 32 of the 69 countries, which is more than any 
other global institution or any other financial institution, 
and Citi should play a leading role in this Belt and Road 
Initiative.''
    It's my belief that the Chinese Communist Party uses this 
initiative to give unfair advantages to Chinese companies and 
forces developing countries into debt traps, often with public 
corruption paving the way.
    I witnessed this on a trip to the Middle East with my great 
chairwoman, Maxine Waters, where we were told of extreme 
corruption that the Chinese companies have been involved in 
across the African continent. And by participating in the Belt 
and Road Initiative, you are supporting significant risk to our 
national security and global economy.
    Ms. Fraser, Citi's support of the Belt and Road Initiative 
presents a serious conflict of interest by helping our 
strongest adversary expand across the globe.
    Do you understand that Citi's support of the Belt and Road 
Initiative is directly opposed to the national security 
interests of the United States?
    Ms. Fraser. Thank you very much for the opportunity to 
answer the question.
    I do not believe, certainly since I took over as CEO, but I 
don't believe before that either that we have played a 
meaningful role, if any role, in the Chinese Belt and Road 
Initiative.
    Mr. Gooden. That is wonderful to hear. And if that has 
changed, I celebrate that. But that was, I believe, recently 
that the head of corporate strategy said that.
    With respect to Russia, I will continue with you, Ms. 
Fraser. You recently stated that you want Citi to be a bank 
with a soul. Would you explain to me or justify perhaps how 
financing Russian oil and gas giant, Lukoil, while pledging to 
reduce financing for American energy producers, accomplishes 
that goal?
    Ms. Fraser. As we talked about, we have already, in a short 
period of time, materially reduced our activities in Russia. We 
are winding down our consumer franchise there and commercial 
banking franchise as we speak, and have been doing similarly 
with our aquifer franchise.
    What we are primarily doing is supporting the 
multinationals that are still operating in Russia and helping 
them in large part with their exit and wind-down on the ground.
    Mr. Gooden. Will you commit today to divest from Russian 
oil and gas giant, Lukoil, which is funding this invasion of 
Ukraine?
    Ms. Fraser. I cannot imagine that we would have a 
meaningful role with them going forward.
    Mr. Gooden. Thank you.
    Mr. Moynihan, do you support a free and democratic Taiwan? 
And does your bank as well?
    Mr. Moynihan. Yes.
    Mr. Gooden. Mr. Dimon, do you all share those views as 
well, of a free and democratic Taiwan?
    Mr. Dimon. I support freedom and democracy everywhere. I'm 
not going to specifically comment on Taiwan. That's up to the 
United States Government to make that kind of statement.
    Mr. Gooden. Some of you struggled earlier today to condemn 
the ongoing human rights abuses in China of the Uyghurs. The 
Department of State, the United Nations, human rights 
organizations, and the like have condemned China's actions.
    Will Citibank condemn the ongoing human rights abuses in 
China at the hands of the Chinese Communist Party?
    Ms. Fraser. We certainly take any of the accusations of 
human rights abuses, wherever they are in the world, very 
seriously, and we'll be vocal in our distress that they're 
occurring.
    Mr. Gooden. Will you condemn the ongoing human rights 
abuses in China at the hands of the Chinese Communist Party?
    Ms. Fraser. Condemn is a very strong word.
    Mr. Gooden. Yes, it is. So is genocide and slavery.
    Ms. Fraser. Yes. We certainly are very distressed to see it 
going on, and we do not want to have human rights abuses 
happening anywhere in the world where we or anyone else 
operate.
    Mr. Gooden. Thank you.
    I would encourage all of you to get out of doing business 
with Russia, and to be very careful with China, because they 
are working very strongly against our nation. And some of the 
answers earlier and the hesitancy to offend the Chinese, when 
many of your organizations are so willing to come down to 
Washington and insert yourselves into policy, yet you seem 
hesitant to condemn things as simple as slavery and genocide, 
is alarming to me.
    But, thank you.
    I yield back.
    Chairwoman Waters. Thank you, Mr. Gooden.
    The gentleman from Massachusetts, Mr. Lynch, who is also 
the Chair of our Task Force on Financial Technology, is now 
recognized for 5 minutes.
    Mr. Lynch. Thank you, Madam Chairwoman.
    Mr. Moynihan, Bank of America has a very strong presence in 
my district, which includes half of the City of Boston. I share 
that with Ms. Pressley. But I also have Quincy and Brockton.
    I just want to say, to your credit, we are trying to build 
or rebuild over a thousand deeply-affordable housing units in 
the City, at the Mary Ellen McCormack Housing Development, one 
of the oldest public housing developments in the history of the 
country. And that will allow us not only to do thousands of 
deeply-affordable units, but also workforce housing for people 
who are in the middle, who seem to be priced out in our area.
    But I just want to thank you, because Bank of America 
committed funding to that some time ago. It's good work, and we 
appreciate it.
    I serve on our Diversity and Inclusion Subcommittee here 
with Mrs. Beatty, and I had a chance to sit with Miceal 
Chamberlain, who represents you in our area, and I asked him 
about progress on our hiring goals within the Cities of Boston 
and Brockton in my district. The numbers were much improved. 
But I would like to hear you talk about the system more 
generally, not just in my district.
    And one area where I think we do need a lot more progress 
is that, as the Chair mentioned, I chair the Task Force on 
Fintech, and there is very little funding going to minority 
fintech principals in terms of pushing their projects forward. 
It's really deplorable in terms of--I think less than 5 percent 
of the money goes to minority heads of fintech firms. So I'm 
concerned about that.
    I would like to hear about your efforts in both regards.
    Mr. Moynihan. On hiring, starting with who works for our 
company, women make up more than half of the workforce, and we 
are 49 percent diverse from the top of the company to the 
bottom. Managers, 42 percent women, 41 percent people of color.
    This is a 30-year effort of continuing to work and watch 
how the hiring flows through to get to a representation of our 
society. And the team has done a good job with that.
    In addition, we committed to hire 10,000 people of all 
ethnicities, from low- and moderate-income neighborhoods. We 
completed that. We said in 5 years, but we did it in 3 years. 
And we have committed to hire another 10,000 people.
    In addition to that, we are working on job initiatives in 
Boston and other cities where we try to get kids to come work 
for companies like ours and my colleagues' companies that are 
great companies, offer great benefits and great starting wages 
right out of high school, and do the training. Here's a job. 
Here's the training we need for them. We go to the community 
colleges and help them do it.
    Going to the question of funding, one of the things that we 
perceived as we looked at it was the exact point you made of 
the need to create equity in smaller sizes for women-owned 
businesses, African-American-owned businesses, and Black 
businesses, Asian, Hispanic, Latino.
    As we looked at that, the private equity funds weren't 
there. So, we went out and found a hundred private equity funds 
across the country. We have committed $350 million to those 
funds. Other people have come in, and they have now funded 
almost a thousand companies.
    The entrepreneurs, the private equity people, for lack of a 
better term, are from those ethnicities, and the companies they 
invest in are owned by those ethnicities or gender. And that 
thousand companies didn't get funded in prior cycles because 
they were too small, hard to find, and all that stuff. And now 
it's happening.
    And we expect this program to build. And we have clients 
who come in and say: Can we put money with this that's good?
    My colleague companies have done similar things. But we're 
all trying to find a way to create the same opportunities seen 
in our companies, outside our companies, and that's what we've 
been trying to do.
    Mr. Lynch. Very good. Let me ask--and I know we had a 
series of questions before on Zelle, the whole payments piece 
of this. And I'm just trying to figure out how to get at some 
of the fraud.
    Is the lack of latency in that system, does that lend 
itself more to fraud because of the speed and finality of the 
transaction? Does that seem to be--
    Mr. Demchak. If I could jump in?
    Mr. Lynch. Sure. Please.
    Mr. Demchak. Traditional fraud in Zelle is minute. It's 
smaller than what we see in checking. It is two basis points--
    Mr. Lynch. Let me just say, though, let me just interject; 
I'm not just talking about that instance.
    When we issued money through the CARES Act, through the 
Small Business Administration, 75 percent of the fraud on the 
money going out to people--it was emergency funding, and we had 
to get it out in a hurry, so part of the blame is with us--was 
through digital lending and applications. There's more to it.
    Mr. Demchak. You're hitting on very important points for 
our country, and for our industry.
    Zelle is a closed network system. If there's a bad 
transaction between JPMorgan and ourselves, I can tell Jamie, 
he closes the account, and it gets fixed. If it's outside the 
banking system in a fintech open system, it's invisible to us.
    Mr. Lynch. Yes.
    Mr. Demchak. And that's where the scams occur. We have no 
regulation once it gets outside of the banking system.
    Mr. Lynch. Okay.
    Madam Chairwoman, thank you for your indulgence. I yield 
back. Thank you.
    Chairwoman Waters. Thank you very much.
    The gentleman from Wisconsin, Mr. Steil, is now recognized 
for 5 minutes.
    Mr. Steil. Thank you, Madam Chairwoman.
    I want to bring us back to inflation. The American people 
are getting clobbered by higher costs every day. Before us, we 
have some of the best financial minds in the country, backed by 
a whole array of economists and experts who are looking at 
economic data.
    And as we see 40-year highs of inflation, 8.3 percent, 
people finding it harder and harder to buy the things that 
their family needs, I think a lot of this was avoidable and was 
the result of bad policy choices here in Washington.
    I would love to get your take here as to what policies are 
driving inflation in our country so we can help families who 
are struggling to get by.
    Mr. Dimon, the $1.9-trillion reconciliation bill has been 
described as inflationary, excessive spending. Do you believe 
that $1.9-trillion bill that was signed by the Biden 
Administration played into inflation?
    Mr. Dimon. I mentioned earlier today that we had $6 
trillion in spending over 2 years, 30 percent of the GDP, the 
largest it has been since World War II. Obviously, that drives 
some of the inflation.
    We did have war in Ukraine and other--
    Mr. Steil. Not that there's not other factors at play, I 
absolutely agree with that. But it piled onto that.
    I want to continue on. Inside of that, we have the 
Inflation Reduction Act, that I think drives inflation.
    Then, we saw the Biden Administration unilaterally act on 
student loans. I'm not asking you to comment on the 
constitutionality of that. I think it's an illegal move, but 
I'm not asking you to comment on the fairness of that.
    Is it an inflationary move by the Biden Administration to 
shift the burden of student debt to all taxpayers?
    Mr. Dimon. It was badly done. I wish they had targeted the 
people who actually needed help. And they reformed the 
underwriting. When the government took it over in 2012, they 
stopped underwriting. We got out of the business the second 
that happened, knowing it was going to be an unmitigated 
disaster. They still didn't fix the underwriting, and they 
haven't fixed the cost of college.
    And so we basically put a Band-Aid on, spent a lot of 
money, and didn't fix the problem, which will now be ongoing. 
Please give it a fix.
    Mr. Steil. And we would be well-served to actually hold 
hearings here in Congress before hundreds of billions of 
dollars are spent. I'm concerned about the fairness aspect. I 
think there are far better ways to do it.
    And I completely agree with you that it does not address 
the underlying problem, which is the fact that we have 
skyrocketing college tuition costs.
    Let me shift gears slightly and look at the impact of 
housing. I know many of you have exited the housing sector due 
to a whole host of regulatory burdens put in place by the 
Federal Government driving up the costs for Americans who are 
trying to get loans.
    But as we look at the impact that higher interest rates are 
having on Americans, I think it's quite significant. The median 
home price in the State of Wisconsin is $271,000. Last year, it 
was $250,000, an increase of $20,000. And the interest rate on 
the 30-year mortgage went from 2.86 percent to 6 percent.
    So your monthly payment on the same home in Wisconsin, 
which is similar to across the country, increased from $828 a 
month to $1,302 a month, $500 a month more to buy the same 
house in Wisconsin at a period of time when families can't keep 
up with rising costs.
    Mr. Dimon, I'm aware that your bank, for many reasons, 
exited this space, but you have a lot of visibility into 
millions of Americans' financial picture. Sketch this out. How 
is this impacting your customers?
    Mr. Dimon. Currently, the customers are actually doing 
okay. That inflation, high rates are going to eat away at their 
balance sheets, their health, eventually their jobs, and their 
spending money. And there are things that I wish this group 
would work on that could reduce the cost of mortgages 
efficiently and effectively and make them more affordable 
today, in spite of rates going up.
    Mr. Steil. Let's dive into that, if I can pivot to you, Mr. 
Demchak, for a second.
    Over the last decade, Congress and regulators have 
implemented a complex bank capital liquidity standard regime, 
and I would argue the spring of 2020 presented a stress test of 
all stress tests. And the banking system came through that and 
showed that it was adequately-capitalized.
    How do you react to proposals to increase capital 
requirements, including proposals to take U.S. standards over 
and above international standards?
    Mr. Demchak. Yes. In the U.S., we call it gold plating, 
where we take whatever the international standards are, and 
then add some to it, because we want to be better.
    I think the stress tests have shown in the real live stress 
tests that the system is very adequately-capitalized and has a 
lot of liquidity.
    Thank you.
    Mr. Steil. Thank you very much.
    Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you very much.
    And this side of the aisle applauds President Biden on 
student loan forgiveness. It's very important.
    The gentlewoman from Pennsylvania, Ms. Dean, is now 
recognized for 5 minutes.
    Ms. Dean. Thank you, Madam Chairwoman.
    And thank you to all of our CEOs for your time today.
    I listened with interest to all of your opening statements, 
and there were certain phrases that popped out to me.
    For example, Mr. Cecere, you said you are one of the 
world's most ethical companies.
    Ms. Fraser, you said--and you spoke globally--that our 
banks are the envy of the world.
    Mr. Dimon, you said that part of your work is to help solve 
the problems facing our country.
    That's our mission too, to help solve the problems that are 
facing our country. One of the problems that is facing our 
country day in and day out is the deaths from gun violence. 
Since 2009, the United States has suffered a devastating 281 
mass shootings, causing more than 1,500 deaths and, obviously, 
so many more injured and terrified.
    We know that some of the deadliest mass shootings have been 
financed with credit cards. For example, in Orlando, the Pulse 
Nightclub shooter charged more than $26,000 in credit card 
charges on guns and ammunition in the 12 days ahead of his 
killing spree that killed 49 and wounded 53 others. His average 
spending prior to this was $1,500 a month.
    Would you consider that to be suspicious activity? Maybe 
raise your hand, or nod your head. Do you find that to be 
suspicious activity?
    I'm seeing some sort of yeses.
    Mr. Dimon. We need more facts, and we don't know what they 
spend the money on.
    Ms. Dean. We have a reason to talk positively about that. 
There is a way for us to know.
    In addition, before the Pulse Nightclub shooter racked up 
credit card debt on gun and ammunition purchases, he ran 
several online searches to determine whether his credit card 
unusual spending would be flagged and reported to the police. 
Of course, it was not.
    To your point, Mr. Dimon, you didn't know what he was 
spending it on.
    And to set the record straight on an issue that a few of my 
Republican colleagues have raised today, which is the newly-
created merchant category code, or MCC, for gun and ammunition 
retail stores, as you may know, I co-led a letter with Senator 
Warren in support of this code.
    And given that the International Organization for 
Standardization has voted to create the code, I want to confirm 
your response to Mr. Williams' questioning that you will be 
using the code. Is that correct?
    I'm seeing a general absolute yes there.
    It's my understanding that you already have practices for 
the detection of fraud and suspicious activity. Is that 
generally true?
    Yes, we've talked a lot about fraud.
    Do you think that this code, for example, had it been in 
place and shown that extraordinary activity of the ultimate 
shooter and killer in the Pulse instance, wouldn't it have been 
useful to note that racking up of credit card charges very 
unusually? Wouldn't that have been helpful to note?
    There is sort of a maybe.
    Mr. Dimon. If you know what it's for, and who it is, and 
why, then yes.
    Ms. Dean. That's why this code is going to be important.
    Mr. Dimon. And you do know all of those gun sales get 
reported to the government, all of them.
    Ms. Dean. And, Ms. Fraser, I was thinking of you, because 
you have such a global view of what you are doing--I know you 
all do, frankly.
    I was in Eastern Europe and Central Europe recently, and it 
happened to be the week of Uvalde. And I think about the global 
shame that comes upon this country as a result of our out-of-
control problem with gun violence: 54,000 people died last year 
of gun violence, 4,400 of them children.
    And in these meetings in Europe, each meeting began with: 
We are so sorry for your tragic losses in Buffalo and Uvalde.
    What responsibilities do you, the banks, have? What 
conversations have you had around your boardrooms to say: How 
can we help slow the tragic loss of life due to gun violence? 
We know that many of the transactions are coming through our 
systems.
    Ms. Fraser, what can you do?
    Ms. Fraser. Yes. Thank you very much for your question.
    As you say, we do operate in a number of countries where 
they have tragic deaths from gun violence around the world. 
This is something, sadly, we see in many different countries.
    Ms. Dean. None quite like ours.
    Ms. Fraser. Understood. But it is a problem in many 
countries. And we have a lot of discussions with our board and 
also with our employees who are concerned for their safety and 
their security, as well for our customers in branches around 
the world. It is an active dialogue about what we can do to 
help prevent--
    Ms. Dean. I thank the chairwoman.
    And I just ask you to continue to partner with us to try to 
reduce this scourge.
    Thank you.
    Chairwoman Waters. Thank you.
    The gentleman from South Carolina, Mr. Norman, is now 
recognized for 5 minutes.
    Mr. Norman. Thank you, ma'am.
    And I want to thank all of the witnesses for appearing 
today.
    I haven't been here for all of the questions, but it shocks 
me some of the questions you are being asked. It really shocks 
me. I've heard trying to shift blame for gun violence. I've 
heard things about unequal equity in housing that you're 
responsible for. I've heard one of the Members say you sucked.
    When you were asked the question--and I don't understand 
this, maybe you all can help me--when asked the question--and I 
think the bulk of it was, how many of you will raise your hands 
if you're going to have a person of color follow you in 
leadership. Why is the--and nobody raised their hand or made a 
comment on it.
    And, by the way, I'm a real estate developer from Rock 
Hill, South Carolina. I'm part of the delegation there. I'm not 
a politician. But I don't understand the boldness is just not 
there to fly back at some of these people and what they're 
asking.
    Why wouldn't the answer to that question be: Mr. or Ms. 
Politician, we don't look at color. We look at achievement. We 
look at past history of building banks, because that's the 
business you're in.
    And, Mr. Moynihan, when the comment, ``sucked,' came up, 
your predecessor, Hugh McColl--I would like to have seen his 
response. I don't think it would have been a marine response to 
that.
    Because you all represent such a vital part of our economy. 
You're competitors. You compete. And I don't understand why the 
boldness is not there and to fly back. You can't satisfy this 
group. And that's why the Americans are so frustrated.
    You're talking about global shame? Leaving Americans behind 
all over the world is a shame. Leaving $8 billion on the ground 
is a shame. Having inflation at a 40-year high is a shame. 
Cutting off our gas supplies and buying it from the very people 
who are killing your customers, because the last time I 
checked, buying oil and natural gas from countries that hate us 
doesn't make really good sense for your customers whom you 
represent and build shareholder value.
    I wrote each of you a letter. We had 37 cosponsors. And I 
asked the question: How is paying for abortions for your 
employees building shareholder value? And maybe, it's a 
disagreement on what healthcare is; I don't consider healthcare 
to be killing a baby.
    With that being said, you all have such an opportunity to 
show boldness. And maybe in my letter to you it was--maybe your 
board of directors is not getting involved. We're sending the 
letter certified mail to every director of your corporations.
    But it's an honest opinion to try to understand it from 
somebody who is in the workforce. I didn't make my money in 
politics as so many of these professional politicians have 
done. I would just beg you to get your voice back.
    This ESG stuff, really? You're just lying down and taking 
it, the wokeness that exists today.
    The silence has been deafening to me as a business guy who 
competes and who pays a lot of taxes and who does it gladly to 
support our law enforcement, to support our first responders, 
to support our schools. And you all represent a great 
tradition, and I wish you would just voice your opinion more.
    The Disney Company learned a valuable lesson about trying 
to get involved in something they don't have any need to be 
involved with. The governor kind of taught them a lesson. And I 
hope and pray we are going to have more governors who teach 
lessons for companies that have no business getting in the 
political arena.
    Thank you for what you do.
    Quickly put a value, what's the cost of ESG that you're 
having to comply with?
    Let's start with Mr. Scharf. I have 45 seconds.
    Mr. Scharf. Today, it's very small, but it's going to grow 
to be something substantial.
    Mr. Norman. Okay.
    Mr. Rogers. Similarly, I don't know the exact number, but 
it is small and growing.
    Mr. Norman. What's small?
    Mr. Rogers. It would be in the tens of millions at this 
particular juncture relative to our size.
    Mr. Norman. Mr. Moynihan?
    Mr. Moynihan. I think that today, the gathering data is 
small, but it will grow because we are getting more requests 
that we are not sure are the right things. We're getting more 
requests for data from more sources.
    Ms. Fraser. I would give the same answer, sir.
    Thank you.
    Mr. Norman. Small things lead to big things, don't they? 
And shareholder value and paying dividends is a big thing.
    Yes, sir?
    Mr. Dimon. We'll get you an exact number. I would say it's 
tens of millions. But we have ESG requests from every regulator 
around the world, every central bank around the world, every 
government around the world. It will likely be hundreds of 
millions of dollars at one point.
    Mr. Demchak. I can't top that.
    Mr. Norman. Will you answer?
    Mr. Demchak. It's a large number and growing, and we get 
more requests every day, to Jamie's point.
    Mr. Cecere. Same comment.
    Chairwoman Waters. The gentleman's time has expired.
    The gentlewoman from Michigan, Ms. Tlaib, is now recognized 
for 5 minutes.
    Ms. Tlaib. Thank you, Madam Chairwoman.
    And thank you all so much for being here. I really 
appreciate this opportunity.
    I represent one of the largest-populated counties in 
Michigan, and in recent years I know the Michigan chapters of 
the Arab American Civil Rights League and the Council on 
American-Islamic Relations have filed complaints regarding 
banking discrimination against those of the Muslim faith.
    Mr. Moynihan, you might know that in May, there was a class 
action lawsuit that was filed alleging that Bank of America 
engaged in discriminatory banking practices by targeting, 
restricting, and closing the accounts of people of the Muslim 
faith.
    Are you aware of that?
    Mr. Moynihan. No, I'm not.
    Ms. Tlaib. Right now, it's a class filed. One of them is 
Mohammed, who had met all of the bank's requirements of showing 
residency and providing proof of that and still his account was 
unlawfully closed.
    How does your bank ensure that the bank's customer 
identification program complies with anti-money laundering 
(AML) regulations without freezing out whole classes of 
consumers from access to banking services to support their 
families and their businesses? What steps have you all taken in 
that regard? It sounds like you don't even know about the class 
action suit. You don't care?
    Mr. Moynihan. I said before, yes, I'm not aware of the 
class action suit.
    We have a deep history of banking all Americans, and 
another million Americans will open accounts with us this 
quarter. So, I think we have a strong track record across all 
ethnicities and all people.
    If you have a specific issue--
    Mr. Tlaib. You should be really concerned, Mr. Moynihan, 
you should really be concerned about this because, again, you 
can see that there is a pattern that specific groups from 
certain backgrounds or ethnicities or faith--again, this is a 
lawsuit that was filed in May--and that we need to make sure 
that Americans of Muslim faith or any national origin are not 
being targeted and that you guys are not implementing processes 
that single them out.
    Are you at least supportive of making sure that you are not 
discriminating against a whole community?
    Mr. Moynihan. I can assure you that's not the case.
    Mr. Tlaib. Okay. I hope you have good lawyers.
    You have all committed, as you all know, to transition the 
emissions from lending and investment activities to align with 
pathways to net zero in 2050.
    Do you know what the International Energy Agency has said 
is required to meet our global 2050 net-zero targets of 
limiting global temperature rise to 2.7 degrees Fahrenheit or 
1.5 degrees Celsius? No new fossil fuel production starting 
today, so that's, like, zero.
    I would like to ask all of you, and go down the list, 
because, again, you all agreed to do this. Please answer with a 
simple yes or no. Does your bank have a policy against funding 
new oil and gas products?
    Mr. Dimon?
    Mr. Dimon. Absolutely not. And that would be the road to 
hell for America.
    Ms. Tlaib. Yes, that's fine.
    Sir, everybody who got relief from student loans, who has a 
bank account with your bank, should probably close their 
account. The fact that you're not even there to help relieve 
many of the folks who are in debt, extreme debt because of 
student loan debt, and you're out there criticizing it.
    Ms. Fraser, how about you?
    Ms. Fraser. We will continue to invest in and support 
clients who are investing in fossil fuels and in helping them 
transition to cleaner energies.
    Mr. Tlaib. And, Mr. Moynihan?
    Mr. Moynihan. We are helping our clients make a transition, 
and that means we're lending to both oil and gas companies and 
to new energy companies and helping monitor their course 
towards the standards you're talking about.
    Mr. Tlaib. Mr. Scharf?
    Mr. Scharf. The same thing as Mr. Moynihan said.
    Mr. Tlaib. Yes. I'm not going to ask you, Mr. Dimon, 
because you obviously don't care about working-class people in 
frontline communities like ours that are facing huge amounts of 
high rates of asthma, respiratory issues, and so much more. 
Cancer rates are so high among my communities that I represent. 
So, I'm not going to even ask you if you're committing to 
ending financing of new oil and gas projects.
    But, Ms. Fraser, Mr. Moynihan, Mr. Scharf, we are living 
through a climate crisis today, and a commitment to net zero 
requires a commitment to ending fossil fuel financing.
    It is important, because I want you all to know that at the 
end, we're going to pay the cost of the public health impact. 
These are people that you are supposed to be serving, the folks 
that you're supposed to be providing for and supporting in 
communities. Anything else defies all logic and scientific 
evidence at our disposal.
    If your financial institutions aren't going to follow 
through on the net-zero commitment, then regulators, including 
the Federal Reserve and Congress, must step in and make them.
    And with that, Madam Chairwoman, thank you so much for 
holding this hearing. I think it's so important for the people 
we represent.
    I yield back.
    Chairwoman Waters. Thank you.
    The gentlewoman from New York, Ms. Ocasio-Cortez, is now 
recognized for 5 minutes.
    Ms. Ocasio-Cortez. Thank you, Madam Chairwoman.
    And thank you to all of our witnesses who are here 
testifying today.
    I want to dive a little bit into the Paycheck Protection 
Program and a bit of what we've seen afterwards. I have one of 
three reports here that I would like to present today, a Forbes 
report detailing some of the revenues that banks have made 
during the Paycheck Protection Program. And also, digging into 
a little bit of the fact that when it comes to loan 
forgiveness, the Small Business Administration (SBA) recently 
opened a portal for small business owners to appeal directly 
with them for forgiveness.
    Chase, Bank of America, and PNC have opted out of that 
direct program. Is that correct, Mr. Demchak, Mr. Dimon, and 
Mr. Moynihan?
    Mr. Demchak. I believe so.
    Mr. Dimon. Yes. I'm not aware of it.
    Mr. Moynihan. I'm not aware of it.
    Ms. Ocasio-Cortez. Okay. For your awareness, your banks 
have opted out of Paycheck Protection Program forgiveness and--
    Mr. Demchak. Excuse me. That is incorrect.
    Ms. Ocasio-Cortez. With the portal with the SBA. Thank you. 
And I was trying to finish my sentence.
    Now, I would like to zero in a little bit on Bank of 
America.
    Mr. Moynihan, are you aware of how many PPP loans your bank 
has facilitated on behalf of its customers?
    Mr. Moynihan. Almost 500,000, and 95 percent are forgiven 
or repaid already, and we're finishing up the rest of them.
    Ms. Ocasio-Cortez. How many of those loans, in terms of a 
percentage, have been forgiven in full as opposed to in part?
    Mr. Moynihan. The ones that are forgiven are mostly--the 
vast, vast majority will be forgiven in full.
    Ms. Ocasio-Cortez. In full.
    What we're starting to see here with some reporting in The 
Intercept--and this is just one reason why I was curious about 
the numbers--is that we're starting to see that Bank of America 
is refusing to forgive some PPP loans in full. But in terms of 
the portal that Bank of America has set up, it's very difficult 
to appeal these decisions.
    And, in fact, what we're seeing is that Bank of America had 
pre-populated a forgiveness amount in their portal sometimes 
drastically lower than small business owners had anticipated 
and had qualified for. And in instances where these small 
business owners have documentation, there is very little 
recourse or appeal.
    Does your portal make it easy to appeal the decisions so 
that after two attempts, the SBA can then take over the case?
    Mr. Moynihan. Borrowers can appeal. Ninety-five percent of 
loans are forgiven and repaid today, so we are only talking 5 
percent of loans, and a substantial number of those are going 
through the appeal process as we speak. So, the borrowers can 
appeal. And we are in the process of finishing up that last 
20,000 or so loans. It's a small amount of loans, and they're 
finishing up--
    Ms. Ocasio-Cortez. And to certify, that 95 percent is a 
full forgiveness amount percent?
    Mr. Moynihan. Forgiveness or repayment. Some of them--
    Ms. Ocasio-Cortez. Full forgiveness, not partial?
    Mr. Moynihan. The vast majority are full forgiveness, but I 
can get the data to you.
    Ms. Ocasio-Cortez. So is the 95--I apologize. Not to 
belabor the point, but is that 95 percent a partial loan 
forgiveness or a full loan forgiveness rate?
    Mr. Moynihan. They're getting what--the borrowers are 
applying for the forgiveness entitled in the program. Ninety-
five percent of them have gone through or repaid, and the vast 
majority of them are full forgiveness.
    But they're entitled to what the program designed. The 
government designed the program, and we implemented the program 
on very short notice, a half million people, 10,000 people 
working on this program, Easter weekend working on the program 
to help those borrowers at the time. And so, we're finishing 
that up.
    Just let the process go. And a lot of what you are reading, 
frankly, is not the facts because it's old. It doesn't 
understand how the math works. So, just give us some time. 
We'll give you the facts, and you'll see it. It's all in the--
    Ms. Ocasio-Cortez. What is the reason that Bank of America 
chose to opt out of the SBA portal?
    Mr. Moynihan. I can get somebody to give you that. I have 
no idea of whether--I told you before, I'm not sure if we did 
or didn't, and I have no idea why they would have made the 
decision. But we are processing loans as fast as anybody.
    Ms. Ocasio-Cortez. Okay. And I'm sorry, I'm just having a 
tough time. This is about $25.2 billion in loan amounts in your 
bank, correct?
    Mr. Moynihan. Not anymore. No, it's down to--
    Ms. Ocasio-Cortez. At one point in time. So, you're 
uncertain as to why the bank has not chosen to enroll in the 
SBA portal?
    Mr. Moynihan. I said we will get you the information. The 
amount of loans we have left on this thing is a billion or so. 
It's down to a very small amount.
    Ms. Ocasio-Cortez. No worries.
    Mr. Moynihan. It's all paid back. It's all through. The 
team did a great job. And we're happy to supply the information 
to you.
    Ms. Ocasio-Cortez. Okay. We look forward to it.
    Thank you very much.
    Chairwoman Waters. Thank you.
    The gentlewoman from Texas, Ms. Garcia, who is also the 
Vice Chair of our Subcommittee on Diversity and Inclusion, is 
now recognized for 5 minutes.
    Ms. Garcia of Texas. Thank you, Madam Chairwoman. And thank 
you so much for bringing this hearing to the table today. It's 
really important for us to continue our oversight role in this 
committee which, as you know, we've been doing and continue to 
do today.
    I want to thank all of the witnesses. It has been a long 
day. And I want to apologize, because you've seen me going in 
and out. I was triple booked this afternoon. I have been 
running to a markup in Judiciary and a hearing at Armed 
Services, so I'm coming and going in all directions.
    But I wanted to be here to ask some specific questions 
related to a bill that I recently introduced called the 
Multilingual Financial Literacy Act. This bill would direct the 
Financial Literacy Education Commission to conduct a study of 
the impact of limited English proficiency on financial health.
    In the U.S., over 20 percent of households speak a language 
other than English at home, and nearly 9 percent of individuals 
have limited English proficiency, meaning they speak English, 
``less than very well.'' This means that 26 million households 
in the United States have limited English proficiency, a huge 
number of potential customers, in your language.
    It is important to me and to my constituents--my district 
is about 77-percent Latino--and it's important for the economy 
that everyone has the same opportunity for financial health, no 
matter what language they speak.
    Mr. Demchak, I want to begin with you. PNC Bank started a 
new mobile branch service, a function in both English and 
Spanish for unbanked and underbanked communities in north 
Texas. This banking service operates in a 30-foot mobile unit 
resembling an RV. Residents have the option of withdrawing or 
depositing from an ATM, opening bank accounts, applying for 
loans, and much more.
    Has this effort been successful so far? And have you been 
able to get a sense of the difference that language inclusion 
makes in financial services? And are you expanding this to 
other mobile branches? And are you telling your stories so that 
perhaps some of the folks at the table with you can copy what 
you're doing?
    Mr. Demchak. Thank you for that.
    Yes, yes, and yes. We have a fleet of mobile branches that 
is growing every day. We deploy it into both rural and urban 
LMI communities. And the financial economics make sense because 
it can cover multiple communities out of--it's fancier than an 
RV--one big truck. And it offers every service that you can get 
in a traditional bank.
    I'll stop there. But we're proud of it, and we would 
encourage others to do it.
    Ms. Garcia of Texas. I call it the [inaudible] truck model.
    Mr. Demchak. It's the old bookmobile from when we were 
kids.
    Ms. Garcia of Texas. I grew up in a rural community, and, 
yes, the bookmobile came by every week during the summer. And 
my biggest disappointment was that before the end of the 
summer, I had already read every book in the bookmobile. But I 
was an avid reader, and I totally believe in mobile units.
    Thank you for doing that. And I hope that your colleagues 
are listening because I think that's obviously a model that can 
be used to serve so many other underserved communities around 
our country.
    My next question is for Mr. Dimon.
    As I said earlier, my district is 77-percent Latino. I 
noticed in your written remarks that you said that JPMorgan 
Chase was advancing an Hispanics and Latinos program which is 
committed to creating a future for Hispanics and Latinos 
worldwide.
    What does that mean? Can you be specific as to what--
    Mr. Dimon. Say it again?
    Ms. Garcia of Texas. You said in your written testimony 
that you're advancing Hispanics and Latino programs which are 
committed to creating a future where Hispanics and Latinos 
worldwide have opportunities to grow and thrive. Could you be 
more specific?
    Mr. Dimon. To hire and train. We have special programs for 
mortgages, special programs for affordable housing, special 
programs for financial education. We have banks in the bus, 
too. We have complete Hispanic-speaking call centers, 
documents, forms--
    Ms. Garcia of Texas. Hispanic is not a language.
    Mr. Dimon. Well, Spanish. I'm sorry.
    Ms. Garcia of Texas. Yes, sir.
    Mr. Dimon. And so we try to do all of that, and it has been 
quite successful, if you want to come visit some of it.
    Ms. Garcia of Texas. I certainly don't see much of--if it's 
in Houston, I'm not seeing it in my neighborhood.
    Mr. Dimon. It's in Houston.
    Ms. Garcia of Texas. I just wondered if you could be 
specific about a program where you are really working and 
making sure that the Latino community is included.
    Mr. Dimon. I have been to those communities myself in 
Houston, and I'm going to send you all of the documents and 
details.
    Ms. Garcia of Texas. Okay. I'll look forward to seeing 
that.
    Just one last thing for Ms. Fraser. Thank you for all of 
the work--I noticed in your written testimony that you said 
you're the number-one affordable housing lender. Thank you. We 
need to do more.
    With that, I yield back.
    Chairwoman Waters. Thank you.
    The gentlewoman from Georgia, Ms. Williams, who is also the 
Vice Chair of our Subcommittee on Oversight and Investigations, 
is now recognized for 5 minutes.
    Ms. Williams of Georgia. Thank you, Madam Chairwoman, for 
holding this hearing today.
    And thank you to our witnesses who joined us for this very 
long day.
    As a newer Member of Congress, I have the benefit of 
listening to all of the other questions before it is my turn, 
so a lot of my questions have already been answered. But I do 
have one that is very specific to my district.
    I represent Atlanta, Georgia, and, unfortunately, Atlanta 
leads the nation in the racial wealth gap. Homeownership has 
proven to be one way to help close the racial wealth gap.
    Too many people have faced barriers to getting a home loan 
because of their lack of traditional credit information. In 
fact, 45 million people don't have enough credit history to be 
accurately scored, and many of them are our family, our 
friends, and our neighbors.
    That is why I'm very interested in Bank of America's 
announcement last month of a new special purpose credit program 
mortgage product which requires no minimum credit score and 
relies on factors such as rent, utility bills, phones, phone 
bills, and auto insurance payments to underwrite mortgage 
loans.
    Mr. Moynihan, do you expect that this product will help 
more underserved borrowers, including borrowers of color, 
qualify for a home mortgage? And, if so, how do you plan to 
track those results?
    Mr. Moynihan. We expect it to expand mortgages, as you 
said, and we will track the results because we will be 
reporting on the success of that program, along with our $15 
billion homeownership programs. This is another version of 
that. So, yes, we expect it to help.
    Ms. Williams of Georgia. The question was, how do you plan 
to track the results, not if you plan to track them, but how?
    Mr. Moynihan. How? Every person who comes in--it's a 
special program. It is designated separately so that you can 
see the application come through the program. The person is 
getting a HUD counselor, down payment assistance. It's a 
special program, so you track the results against--you track it 
coming through. It's not a regular way program that's available 
everywhere.
    Ms. Williams of Georgia. Can you tell us more about how 
this program will work in practice? For example, how will 
borrowers know that they can use rent and other data that's not 
typically on their credit report to help them qualify for this 
new mortgage product?
    Mr. Moynihan. It's available at all of our financial 
systems. You can find the information on it in all of our 
online systems, which 97 percent of low- and moderate-income 
households use, and you can find it in our specialized mortgage 
product, our Better Money Habits, and things like that. It's 
available in all of our operating channels so everybody can see 
it and find it.
    Ms. Williams of Georgia. And this is something that people 
coming in to look for a mortgage product are told is available?
    Mr. Moynihan. I was at the branch up the street here the 
day after we announced it, and we had people coming in already 
here in Washington, D.C., so I'm sure that we'll have a lot of 
people coming into the branches and asking about the program.
    Ms. Williams of Georgia. Mr. Moynihan, I think this is a 
great thing, so I want to hear more about it. So, if you could 
tell me more about why you decided to make this pilot program 
available in certain cities and if you expect to expand to 
other cities, as well as expanding this product offering in the 
future?
    Mr. Moynihan. If the program is successful and it serves 
the customer the way we hope it does, yes, we'll be able to 
bring it to other cities.
    It's an extension of work that we've been doing for many, 
many, many years. The unique aspect to this is the--from the 
1974 Equal Credit Opportunity Act enabling these types of 
programs through to now.
    This has a little bit different qualification mechanisms to 
it. We expect it to be expanded to other cities once we sort of 
get used to it and see how it operates. But it's meant to--it's 
about where the mortgage is being done and the borrower, not 
just about the borrower, which other programs are.
    Ms. Williams of Georgia. Do you think it's reasonable and 
feasible for other banks to underwrite mortgages with this type 
of nontraditional or alternative credit information?
    Mr. Moynihan. Not only is it reasonable, they already do 
it. I can let them speak to it. But I'm well aware the other 
institutions that we spoke to in earlier questions do use a way 
to complete that part of the credit analysis above and beyond 
traditional means.
    Ms. Williams of Georgia. And I would love to hear from 
other banks about what they're doing to underwrite mortgages 
with information for nontraditional or alternative credit 
information.
    Mr. Dimon. We're doing fundamentally the same thing, and 
we'll send you the package on how we do it.
    Ms. Williams of Georgia. I would love to hear more about 
it.
    Anyone else?
    Mr. Scharf. I would just add that this is something that 
the OCC has organized around Project REACh, where all of the 
banks are working together to try and use all of the 
information that we have, to go beyond the FICO score, to help 
make credit decisions on a more informed basis, not just for 
mortgages but for a host of products.
    Ms. Williams of Georgia. Anyone else before my time 
expires?
    Thank you, Madam Chairwoman, for my time today, and I yield 
back.
    Chairwoman Waters. Thank you.
    The gentleman from Massachusetts, Mr. Auchincloss, who is 
also the Vice Chair of the committee, is now recognized for 5 
minutes.
    Mr. Auchincloss. Thank you, Madam Chairwoman.
    This has been a long hearing, but we're almost done.
    As we've been in this hearing, the Fed announced a 75-
basis-point increase. The Fed Chairman is channeling his inner 
Volcker and is committing publicly to using the full weight of 
monetary policy to reverse QE and rein in inflation. His 
greatest asset in this endeavor is going to be his credibility 
as an inflation fighter.
    By a show of hands, how many of you have confidence in the 
Fed's resolve through 2022 and 2023 to pursue its mandate of 
price stability?
    That's a show of confidence from Wall Street in Chairman 
Powell.
    The best way to reduce inflation, though, is to expand the 
productive capacity of our economy. Mr. Dimon, you said this in 
your remarks. That means raising labor force participation 
rates and, perhaps most impactfully, building more housing.
    At the State and local level, that means pushing back on 
NIMBY opposition to multifamily housing in particular. At the 
Federal level, what can government and big banks do together to 
help build more affordable housing? To help build more 
affordable housing, not just to finance it.
    Mr. Moynihan, because our home State of Massachusetts is so 
crucially under the weight of housing costs, I'd like you to 
answer first, and then anybody else can jump in.
    Mr. Moynihan. If you're talking about developers--first of 
all, the financing that we all do as an industry, the financing 
our company does, about $5 billion a year in housing, low-
income/moderate-income housing and low-income housing tax 
credits.
    In terms of development, one of the perceptions is we have 
to create more development. So, a group of my colleagues in 
Charlotte created $60 million of equity to go to more 
developers to close that gap. We're working in Boston to see if 
we can put together the same kind of program, on the theory 
that there's a need to develop more developers who can do more 
work.
    Mr. Auchincloss. Right.
    Mr. Moynihan. But it's a universal problem, whether it's in 
Charlotte, with 20,000, 30,000 housing units short; Boston, the 
same thing; or New York City. Getting housing developments fast 
is critically important.
    But it's a multifaceted question, which requires us to 
think about university housing, it requires us to think about 
kids who work for us in New York City housing, which is 
different from family housing, and it takes some thinking. And 
that's one of the planning cycle things you could help with.
    Mr. Auchincloss. It takes some thinking, but, most of all, 
it takes some building. In Massachusetts, we have created two 
jobs for every one unit of housing in the last 20 years. And 
you don't have to have the team of economists that you all have 
to understand what happens when you do that. Housing prices go 
up. And it's the single most important thing we can do in my 
home State to help people, and working families in particular.
    The property market in the USA is way too tight, but in 
China, it's collapsing. Xi Jinping's zero-COVID policy has been 
a catastrophe. The U.S. economy has grown faster than the 
Chinese economy in the last year for the first time in my 
entire lifetime.
    Where can Capitol Hill and Wall Street collaborate to seize 
the initiative and outcompete the CCP for leadership of the 
world economy?
    Mr. Dimon, I'd love your thoughts.
    Mr. Dimon. I think it's very important. We're kind of doing 
that a little bit with some of the bills, the CHIPS Act, et 
cetera.
    Faster permitting for grids, solar, wind power, 
hydroelectric power building. Sometimes, it's a coordinated 
thing. The building can't get built because the road can't be 
built, because the water's not being put in, because the grid's 
not being built.
    And getting our schools to--more STEM teaching, which a lot 
of them are starting to do together.
    The whole panoply of things that--I think we know what they 
are, and there's a great list we can send to you.
    Mr. Auchincloss. I'd appreciate that.
    One other person can jump in if they have a--
    Mr. Moynihan. I think that, earlier, one of your colleagues 
mentioned investing in research. And what America has is the 
best research platform in the world. And that's where you win 
long-term. You have to do a lot of things short-term, but long-
term. And so, in the CHIPS Act, it's the investment piece that 
is as critical as the other pieces.
    Likewise around the medical platforms. And we just saw the 
miracle pulled off in the United States--
    Mr. Auchincloss. Right.
    Mr. Moynihan. --and why we didn't have to have a zero-COVID 
policy.
    We can't forget research. The great research universities, 
labs, et cetera, have to be funded and have to be funded in a 
way that they can plan ahead and do the work.
    Mr. Auchincloss. And I'll note that it's not just the 
United States; it's Massachusetts leading the way on that 
biomedical research.
    And, with the CHIPS Act, we appropriated and authorized for 
the CHIPS, but we did not appropriate for the Science part of 
that bill. And we're going to have to continue to appropriate 
the money that we authorized in CHIPS and Science for 
biomedical research. I'm assuming you'll be committed to that.
    Mr. Dimon, in my last 30 seconds, a previous member of this 
panel impugned your motives relative to working-class families, 
and didn't give you a chance to respond as a courtesy. Do you 
want to respond in my last 30 seconds?
    Mr. Dimon. We all do a tremendous job taking care of our 
employees, trying to help our communities, lifting up 
impoverished communities, supporting things like the Earned 
Income Tax Credit, minimum wages, and the CHIPS and Science 
Act.
    Yes, that did impugn me a little bit, and it was wrong. 
Most of us care about our employees more than just about 
anybody else, and our communities, and hopefully, we 
demonstrated a little bit of that here today.
    Mr. Auchincloss. Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you very much.
    To our witnesses today, we are very appreciative for the 
time that you have spent, and we certainly appreciate your 
patience. This is difficult work, but, as you know, we have the 
responsibility for oversight, investigation, and protecting our 
consumers, and we do that with regulations.
    Having said all of that, of course there are concerns, and 
there are disagreements. But that's how democracy works.
    Let me just say thank you for the time that you have spent 
here today. Thank you for the way that you have responded to 
our concerns and our questions. And, of course, we have a lot 
of work that we must continue as we interact with each other to 
do the people's business. So, I'd like to thank you for all of 
your testimony today.
    And I do want to note for the record my concern that 
despite providing some of you, or all of you, our invitation 
with questions well in advance, at your request, on July 1st, 
more than 50 days ago, not all witnesses had fully responded to 
the questions in their testimony. I fully expect that those who 
did not will promptly provide a complete set of responses 
within the next week so we can include those in the hearing 
record.
    The Chair notes that some Members may have additional 
questions for these witnesses, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    With that, again, my sincere thanks for the time that you 
have spent and the patience that you have demonstrated.
    This hearing is adjourned. Thank you.
    [Whereupon, at 4:32 p.m., the hearing was adjourned.]

                            A P P E N D I X



                           September 21, 2022
                           
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