The CEOs of the nation’s largest banks recapped their institutions’ efforts to support their customers and communities through the COVID-19 pandemic and its aftermath during a Senate Banking Committee oversight hearing. These efforts included approximately $93.8 billion in Paycheck Protection Program lending from the firms that participated in the program.
“The goal of all of us . . . was to get as much money into the hands of people who needed it, as quickly as possible,” said Citi CEO Jane Fraser. Among the challenges banks faced to roll out the massive government relief program, she added, were building out the digital platforms needed to facilitate applications for loans and forgiveness, and finding ways to distribute funds quickly and “doing so in a way that wasn’t allowing fraud into the system and was protecting the intent of [taxpayers’] money supporting those who need it most.”
Looking ahead to a potential future pandemic scenario, Fraser added that “it will be a worthwhile investment to make sure we do have a technology platform at the SBA or any of the other relevant institutions helping this to be able to disburse money as effectively as possible. There were many lessons learned . . . that need to be applied, and investments made in technology.”
As the COVID-19 pandemic winds down and federal foreclosure and eviction moratoriums prepare to expire, the CEOs emphasized their commitment to helping borrowers that are still facing financial hardships. “The good news is, the amount of deferrals is way down, and most of the clients have become current,” said Bank of America Chairman and CEO Brian Moynihan, adding that his bank would continue to help borrowers find loan modifications that meet their needs “irrespective of the deadline passing,” and that “taking someone through the foreclosure process is something we want to avoid at all costs.”
Turning to the issue of climate change, JPMorgan Chase Chairman and CEO Jamie Dimon emphasized the need for a “mature” discussion on climate policy and the transition to a low-carbon economy. “The conversation should be around ‘how are we going to accomplish this in the right way?’” Dimon told members of the Senate Banking Committee. “We can either accomplish reducing CO2 dramatically at no cost to having a healthy economy, [but]if we do it the wrong way . . . we can damage the economy.”
Dimon noted that “it’s not just about banks stopping financing” of certain energy-related businesses. He added that “we’re going to need oil and gas for a long time.” Added Bank of America’s Brian Moynihan: “I think what we’re all saying is, we’re here standing by to help our clients make the transition. That’s the value of these big banks.”
When asked whether the Securities and Exchange Commission should move to institute a standardized climate disclosure requirement, the CEOs cautioned that any such requirement should be carefully designed and applied consistently to companies across various industries. “We make a tremendous amount of disclosures already in ESG, so we’re not against it,” Dimon said. “But you’ve got to be very thoughtful about what it is, what you’re trying to accomplish, and [that]it’s not just done for banks, but . . . for other critical industries in the right way.”