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Republicans warn bank CEOs to tread lightly on social, cultural issues

Senior Republican chastises banks for social agenda that 'harms America'
Senior Republican chastises banks for social agenda that 'harms America' Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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By Pete Schroeder, Lananh Nguyen and Saeed Azhar

WASHINGTON -The heads of the nation's largest banks faced pointed criticism from Republicans Thursday, as they urged firms to refrain from weighing in on social and cultural issues.

Senator Pat Toomey, the senior Republican on the Senate Banking Committee, urged banks to stop "embracing a liberal ESG agenda that harms America," as chief executives appeared before Congress for an oversight hearing. Toomey, who frequently backs industry calls for lighter regulations, argued firms are out of bounds when they weigh in on non-banking issues like guns and abortion.

"I can't help but observe that when banks do weigh-in on highly charged social and political issues, they seem to always come down on the liberal side," he said in his opening statement.

Sen. John Kennedy, a Republican from Louisiana, praised the banks as "not perfect, but good," before echoing the call to tread lightly.

"You will never win the uber-woke sweepstakes," he said.

The increased scrutiny underscores the challenges the country's largest lenders increasingly face as they try to balance commercial interests with pressure from policymakers, activists and investors to take stances on environmental, social and governance (ESG) issues.

The line-up included CEOs of the four largest U.S. banks: JPMorgan Chase & Co's Jamie Dimon, Wells Fargo's Charles Scharf, Bank of America's Brian Moynihan and Citigroup's Jane Fraser. They were joined by the CEOs of the country's largest regional lenders, US Bancorp, PNC Financial and Truist.

Democrats continued their critical stance towards big banks, arguing they are enjoying large profits while mistreating consumers and workers. None of the CEOs in attendance affirmatively agreed with Chairman Sherrod Brown's request that they remain neutral in any employee unionization efforts.

However, the CEOs said they were starting to raise interest payments to depositors in the wake of the Federal Reserve's rate increase this week, a trend they expected would continue.

CEOs were in Washington for a second day of oversight hearings. On Wednesday, executives were pressed by lawmakers to take a tougher stance on doing business with China amid growing tensions between Washington and Beijing over Taiwan's sovereignty and China's human rights record.

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