May 26 (UPI) -- The chief executives of the six largest U.S. banks testified in Congress Wednesday on oversight topics that included their response to the COVID-19 pandemic, diversity efforts and cryptocurrencies.
In their opening statements, the CEOs addressed their financial institutions' response to the COVID-19 pandemic, which included the disbursement of loans to small businesses under the federal Paycheck Protection Program.
Jane Fraser, the new CEO of Citigroup, said in her opening statement that Citi is "a very different bank than the one that entered the financial crisis more than a decade ago."
She said the origins of the health crisis are "very different" from those that led to the financial crisis a decade ago.
"This is not a financial crisis, but a public health crisis with severe economic consequences," she said.
Fraser noted that Citigroup was one of the first banks to announce temporary assistance measures.
"To date, we have provided assistance to 2.7 million consumers and small businesses in the U.S. ... and we significantly ramped up our capital support for corporate clients in the hardest-hit sectors."
Bank of America CEO Brian Moynihan said his bank was the first to accept PPP applications and has provided loans to 500,000 small businesses, more than any other financial institution.
"When the crisis hit, we were well-positioned to be a source of strength and stability. That reflects our decade-plus focus on driving responsible growth," Moynihan said in his opening remarks submitted to the committee in advance.
"We must deliver for our shareholders, our clients, our teammates, our communities and, at the same time, help deliver progress on important issues facing society," he adds. "We embrace our dual responsibility to drive both profits and purpose."
Bank of America, Wells Fargo, Citigroup and JPMorgan Chase are known as the "Big Four" American banks, holding 45% of all U.S. customer deposits. Goldman Sachs and Morgan Stanley are investment banks that do not handle consumer banking.
"We remain in the midst of this crisis that has caused serious humanitarian and economic issues, leaving an indelible mark on many of us," Morgan Stanley CEO James Gorman says in his opening statement. "Our hearts go out to all of those directly and indirectly impacted by this crisis.
"We committed to making no reductions in our workforce through 2020, thereby providing reassurance to our 70,000+ employees in a very difficult time."
Small businesses were awarded loans of $525 billion through the PPP last year and at least $134 billion in a second round of loans beginning in December. The program, however, came under some scrutiny after several big money corporations -- including the NBA's Los Angeles Lakers, Shake Shack and Nathan's Famous -- applied for and received funds from the program, which was primarily designed to help small and struggling operations make it through the pandemic.
"Though the process was not perfect, we, the government, and others worked together to help our fellow citizens," Wells Fargo President and CEO Charles Scharf states in his opening statement.
"Banks were a part of the solution to beat back the economic impacts of a global pandemic, and now we must continue to work together to ensure a fair and equitable recovery."
"As the pandemic hit, we transitioned our workforce to be 98% remote," Goldman Sachs CEO David Solomon says in his remarks.
Sen. Elizabeth Warren, D-Mass., was skeptical, calling the CEOs' words "a bunch of baloney." She criticized the banks for collecting overdraft fees during the pandemic and called JP Morgan Chase CEO Jamie Dimon the "star of the overdraft show."
Warren added that JPMorgan Chase collects seven times the overdraft fees than any of the others.
Dimon responded by saying that his bank has refunded overdraft fees for customers affected by COVID-19, but declined when asked by Warren if JPMorgan Chase would return overdrafts for all customers during the pandemic. None of the CEOs signaled that their banks would do that, either.
The bank CEOs also addressed questions about diversity in their ranks.
Fraser, the first female CEO of a major Wall Street bank, noted that her bank's board of directors is comprised of 50% women and almost 20% people of color.
"I am proud to be the first woman to run a global financial institution and equally proud that we have one of the most senior Black executives in our industry," she said.
"Of my U.S.-based direct reports, five are women, one is Black, one is Hispanic and three are members of the AAPI community.
Several of the CEOs also expressed skepticism toward cryptocurrencies in their remarks, stating that they intend to conduct further evaluations of the assets and await federal guidance.
"We continue to evaluate the opportunities, risks and client demand for products and services related to cryptocurrency," Moynihan said.
"Currently, we do not lend against cryptocurrencies and do not bank companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment."
The Treasury Department last week announced new measures to prevent cryptocurrency scams, including requiring all transfers worth at least $10,000 to be reported to the Internal Revenue Service.