Big U.S. banks are being criticized for not doing enough to help the public during the pandemic. Yahoo Finance’s Brian Cheung weighs in.
Video Transcript
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MYLES UDLAND: Well, bank executives went down to Capitol Hill yesterday to appear before the Senate Banking Committee. Today, those executives will testify before members of the House. Yahoo Finance's Brian Cheung stopping by now to tell us about old friends Jamie Dimon and Elizabeth Warren locking horns. What else would happen during one of these events?
BRIAN CHEUNG: Absolutely. So yesterday, six bank CEOs of the largest US banks-- largest six US banks-- appeared in front of the Senate Banking Committee, and it was generally called an annual oversight meeting, so there wasn't one specific topic. And because of that, the politicians were all over the place when it came to certain topics. Hong Kong came up at one point. The Georgia voting law at another time. But what caught a lot of attention was an exchange between Massachusetts Democrat Elizabeth Warren and JPMorgan Chase's Jamie Dimon over their overdraft fee policies during the pandemic. Take a listen.
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ELIZABETH WARREN: So, Mr. Dimon, how much did JPMorgan collect in overdraft fees from their consumers in 2020?
JAMIE DIMON: Right. I think your numbers are totally inaccurate, but we'll have to sit down privately to go through that.
ELIZABETH WARREN: Sir, these are public numbers.
JAMIE DIMON: I also want to point out, we did not overdraft--
ELIZABETH WARREN: Can you just answer my question?
JAMIE DIMON: We did not overdraft--
ELIZABETH WARREN: How much did JP Morgan collect--
JAMIE DIMON: We did not overdraft-- we did not overdraft at the Fed account. And at any request--
ELIZABETH WARREN: So you never--
JAMIE DIMON: [INTERPOSING VOICES]
--they needed--
ELIZABETH WARREN: I'm sorry, Mr. Dimon.
JAMIE DIMON: They needed COVID relief. They got $120 million--
ELIZABETH WARREN: Mr. Dimon, that was not the question.
JAMIE DIMON: --on request.
ELIZABETH WARREN: Did you-- you had an automatic protection. So I'm asking, you were recommended-- the regulators recommended you offer that same kind of protection to your customers.
JAMIE DIMON: And we did.
ELIZABETH WARREN: How much, in fact--
JAMIE DIMON: And we did.
ELIZABETH WARREN: --did JPMorgan collect in overdraft fees from their customers in 2020? Do you know the number?
JAMIE DIMON: I don't know the number in front of me, but we--
ELIZABETH WARREN: Well, I actually have the number in front of me.
JAMIE DIMON: --upon request--
ELIZABETH WARREN: It's $1.463--
JAMIE DIMON: --upon request, we waived the fees.
ELIZABETH WARREN: Billion.
BRIAN CHEUNG: So about $1.5 billion was the amount that JPMorgan Chase netted from overdraft fees. Probably a drop in the bucket compared to the businesses overall in that huge company. Keep in mind, they're the largest US Bank. Now, of course, you could argue to what degree maybe that was a "gotcha" question from the senator from Massachusetts, but it is worth reminding everyone that the regulators did recommend to the largest banks at the beginning of the pandemic that they should waive a lot of those overdraft fees.
Now, of course, JPMorgan Chase and Jamie Dimon, for his part, arguing that any one that requested an overdraft fee waiver was able to get one. So the question is whether or not it was supposed to be the consumers or the bank that was ultimately putting that freeze on those overdraft fees.
Now, of course, that was the first day of hearings. That clip was from yesterday. Today, the Senate-- those same banks CEOs will be appearing in front of the House Financial Services Committee, where, if anyone thinks it's going to be any less hot, reminder that Maxine Waters is the chair and that hearing is going to start at 12:00 PM. And, of course, we'll have the full coverage of that right here on Yahoo Finance.
MYLES UDLAND: Yeah, I mean, it is a "gotcha" question. That's the point of lawmakers asking questions of other people as they're trying to get them caught in some kind of pretzel. But I do think-- look, I think this is a serious outline here of Elizabeth Warren thinks that things should just be done for people and Jamie Dimon is saying, well, people had the ability to do this themselves. And if that isn't a more fundamental break in how the two of these folks-- representing, of course, far larger constituencies-- see the world, I don't know what is. I think it's exactly-- you want to know everything about how they see it? You can kind of watch how they went at this question when they both, again, thought they were right.
But Brian, just broadly, you mentioned annual oversight meeting here, so it's not any one thing in particular. We chatted yesterday about this idea that bank executives don't exactly love going down to Capitol Hill, and I think you threw out, what, six or seven topics that could come up. I mean, it's a prep nightmare for these folks. But, I mean, does it feel to you, as someone who follows financial regulation, like, this is becoming a significantly more regular part of how Congress wants to interact with the financial system now that we're kind of past that crisis era and into this sort of new world of financial regulation maybe?
BRIAN CHEUNG: Well, what I pointed out yesterday was that the title of that hearing, at least on the Senate Banking Committee side, was annual oversight. But this is the first time-- or yesterday, rather, was the first time that all six large bank CEOs testified to that committee. So by naming it an annual oversight meeting, this clearly tells you, at least on the Democratic side of things, they would like to have them come down to Capitol Hill every year.
Now, of course, as you mentioned, none of these executives likes to go down to Capitol Hill. They're all under oath, but the biggest lie that they usually say is, thank you for having me here. It's a pleasure to speak with you. Which all of them usually say at the beginning of their testimony. And I think that these big bank CEOs are going to have to answer a lot of questions in a formal hearing or through questioning via letter, because of the nature of a lot of the ESG measures that they're doing.
That was a big focus of the hearing yesterday, whether or not these banks are doing enough or too much on climate change, for example. You have those on the right, for example, arguing that maybe these banks are trying to blacklist or try to deny funding to traditional fossil fuel companies in favor of greener energy, whereas Democrats are arguing that they're not doing enough to defund the fossil fuel industry. So that tug and pull is something that's going to extend far beyond 2021 in what could be interesting, maybe frequently, in annual hearings on Capitol Hill, guys.
MYLES UDLAND: All right, Brian Cheung, have fun today. Noon Eastern time, House members will question these six bank executives. Brian, talk to you later this.