Chairwoman Maxine Waters, a California Democrat, has tried to downplay the potential for theatrics. She is billing the hearing as important oversight.
“It has been 10 years since the CEOs of the largest banks testified as a group before Congress,’’ Waters said at an American Bankers Association conference last week. “In that time, the banking industry has changed dramatically.’’
Change is exactly what the bank CEOs would like to discuss. The Financial Services Forum, the trade association that represents all the CEOs who are testifying, has led the lobbying campaign. Ahead of the hearing, the group has organized meetings with the offices of nearly every committee member, Ocasio-Cortez being a notable exception.
“This week’s hearing will reinforce both the criticality of these well-capitalized, customer-driven firms, and the fundamental strength of our financial system,” Kevin Fromer, the forum’s president, said in a statement. The largest banks are “integral to the success of our economy,” he added.
No Jets
One of the forum’s main talking points is that banks are better off because of the 2010 Dodd-Frank Act –- a somewhat ironic argument since few in the industry backed the law when it passed. Still, it allows the firms to turn the tables on potentially unfriendly Democrats by in effect asking: Don’t you think the reforms that you supported worked?
Each individual bank has been preparing its CEO for his testimony. The WilmerHale law firm has been hired by four banks -- Citigroup, Bank of America, Bank of New York Mellon and State Street -- to advise their leaders, according to people familiar with the matter. Davis Polk & Wardwell has worked with Goldman Sachs and Morgan Stanley.
There’s even a video making the rounds that shows clips from Sloan’s March appearance before the committee -- it’s being used as a primer for what not to do. And the CEOs have all been told to ground the private jets and plan on taking Amtrak.
The banks are on alert for uncomfortable questions, said people familiar with the preparations who asked not to be named because they weren’t authorized to speak publicly. Inequality is expected to be a hot-button, with queries over issues like why CEOs make so much money and the salary gap between men and women. The fact that all the bank leaders testifying are white men could attract scrutiny.
Prisons, Guns