2 million arrest figure . The committee will come to order. The gentleman from missouri is recognized for 5 minutes. Thank you, madam chair. Welcome back witnesses. Ladies and gentlemen, id like to talk about a larger issue. Heavy investment in friendly countries like russia ander china. Ms. Frazier andic diamond. You drew down after putins invasion of ukraine. They said you did the right thing by slinking your assets. There is a large list. Number two, you play a significant role in a supportin. The resen mondays china threatened violent red rick. Should he followthrough on the threat to invade taiwan. Would you pullco investments out of c china . We will follow governments guidance that hasan been to work with china. If they change that we will change it like russia. We would doo likewise. We will follow the governments guidance. We hope it doesnt happen. We would salute and follow what the American Government said. I appreciate your willingness to follow law. Mr. Diamonder is this enough to stop doing business. Ifw an invasion. Well, ill decide what will happen. Goingg to commit to pulling estimates out of china. Id calll the American Government thats what they wouldd do. We always put them at risk in fact find it before with russias situation in ukraine. We do that all of the time in every country. It will be driven by the government in occasion. That would be driven by the rules and regulations. Ms. Frazier. Supposed they said it up to you. Business to business. Its likely we would have reduced presence if any at all. You rollup and you would pullout. Rewouldth reduce it. Its a hypothetical question. , its highly likely we would have a reduced presence. They put your commitment to protectt human rights around the globe. Crimes include unlawful killing by theg government. More sterilization, rape, and torture of a large number ofun those routined. Condemn them for the horrible acts. Its the important thing. Client selections. We look at it and sacrifice. The government of china is a communistno party. The communistnc party is the government. You do business in that country you do it willingly. You doin it under their laws. So, as they commit these crimes are you okay with that . Are you willing to continue to business with people . Tinue to you say in other statements thats a a bad deal. We dont do business with companies we believe are doing atrocities. Are we doing business with them. Even though they commit these crimes. The gentleman from colorado colorado of the chair is recognized for 5 minutes. Mine would be simpler from that. I guess, im coming at things differently. I have been expressed by my republican colleagues. Lookingco at the past few months and prices held steady or dropped. The university of michigan anticipates prices to drop over the next year. In conversations, what are they thinking going to happen. This quarter, Third Quarter wasis a positive. This is this year. Negative for the First Quarter of next year. I think, negative for the second quarter. Its right in the fourth quarter. I dealt withh them at the beginning of covid19. Im not sure if you get there. They expected covid19 to do to the economy if we did nothing and held steady. We didnt do ppp, unemployment. They said wed have trouble. Thank goodness we did a lot to keep the economy moving and, you know, its a year over year increase in prices. If we go forward based on august. Om its 1. 2 for the next year. If you look at the whole summer, less than that. So, who ill worried about is an overreaction from the Federal Reserve. Last time we saw them increase Interest Rates was in the 80s and early 90s. I can tell you, colorado gotm clobbered. The Housing Market stopped and did everything else. Ill turn to you because pnc had a frequent site called the kessel company. Itit had, it suffered a lot of foreclose sures in the 80s and 90s. As did predecessors of u. S. Bank and j. P. Morgan. What do you see . What does your bank see on the horizon in terms of foreclose . With ukraine and this and that we are facing supply chain disruptions caused by covid19. Are you prepared, is your bank prepared to handel foreclose sures if the bottom falls out thatsd, a potential problem here . Thanka you. I think inflation is stickier than we would like as a result of that rates would be higher than longer we would like. The impact of that on housing is clearly already felt in the creation of new homes and sale of homes. The impact on existing homeowners and their inability to make payments with inflation. Its a real issue. We work with government funded programs and pnc funded programs to make surenc people stay in their homes. Have you seen delean quentcies rise . We have true . I mean he wasnt saying it is a production, just naming a possibility. I think the four diamonds productions. Think of america . Yes. Not to take our word for. Look at the stress te the highest unemployment the highest stock market and look at the results. Thank you. I have feel back to the chair. Thank you. The gentleman from texas mr. Williams is now, recognized. Thank you madam chairman i thank all of you for being here today. Appreciate it last week in and emerging category code was improved for gun ammunition sellers. My republican colleagues and i have expressed concern that this will make it easier to track expose andmu limit the Constitutional Rights of lawabiding gunller owners. Progressives are at the cheering that this will be a huge step forward in monitoring suspicious gun purchases. After this victory they came out with a statement on how they have been dragged in this political arena. We do not believe private campaign should serve as moral arbitrator asking private companies to decide the legal products can cannot be bought and from what store. It sets a dangerous resident and further abune invasion of consumers privacy for banks and Payment Networks to know our most personal payment. Visas against this pretty but i think the Credit Card Company should disregard the code i do agree with the Statement Released by visa. The problem with these new classification codes is determining whether its suspicioushi is a sip active exercise and anyone who is against the rights of gun owners will want your institutions a flag every single transaction with the mcc to law enforcement. Before i begin i want to get a yes or no answer from each of you. First you agree with implementing this mcc for guns and second do agree with the visae Public Statement and we will start with you mr. Scharf. Please repeat. Read them. I didnt follow it. I can read it but its cutting into our time. Its cutting into political business. In terms of your question we dont set the merchant category codes. The iso association sets them and we are instructed to follow them so what we think is not relevant. Mr. Rodgers . Certainly follow the rules of the Credit Card Companies and intermediaries that also apply the law due to the privacy of our client. Do you agree with these Public Statements . We will protect the privacy of her clients according to the law. O mr. Moynihan . My colleagues have said rules of negotiationla are not our doing. We just have to implement them but we believe in the privacy of her Customer Data and thats been true for many years. Im not sure i agree with the Public Statement at all that is their statement and im not sure if i dont disagree with it. I dont reflect another people statements. I can only speak for foreign banks. He did not intend to use the code for individual cardholders. You said you do not . We do not intend to use the code. Mr. Dimon . We dont want to be in the business of telling american citizens what they can do with their money. People understand your concerns over the issue. Okay. I have nothing new to add. I think everyones covered it. We will abide by the rules applied to the customers. Ms. Fraser what are the criteria of the credit card will use in the code . We will follow the regulatory requirements as we always do. Looking at this we dont think it will be a factor. Mr. Moynihan on similar note how would america determine customers firsttime gun purchase as someone who became recently interested . Again as my colleagues have said if i purchase a gun at a inshop with the fact that they purchased it has nothing to do with it. My last question row quick when i talk to Business Owners in texas form from there doesnt seem to be any debate that we are in a recession end up equipped withmy this question. Earlier this summer he this summer you said you believe theres a strong possibility of recession and a 20 to 30 chance of something. Can you describe the economic hurricane that we could be seeing and that you think we can avoid further economic damage . High a rates that lishan inflation war and they are meeting as we speak and they will meet in six to nine months. I dont know the outcome. The gentleman from connecticut mr. Himes whose the chair of the subcommittee on national security, International Development and monetary policy. You are now wrecking nice for five minutes. Thank you madam madam chair and i thank you all for being here. I first had in the sermon the First Quarter of 2009 when the economy was contracting at an annualized rate of 10 of the did worry a number for institutions were going to survive the week. We have come a long way and mr. Mr. Dimon you said doddfrank was a big part of that but i was assured at the time the people on my side of the aisle that doddfrank would crumble like a sand castle in the hurricane i was as assured by the other side and none of these were close to being correct. Creditli where credit is due. We got through because of your stewardship and thank you not just for not creating problems for doing what so important to my business and my district that i will forever focus on risk and after questions about risk in four s minutes. Mr. Dimon 70 plus of the origination market has less visibility. Take a minute to talk about whether we should be focused on that risk and mr. Moynihan im going to ask you in a minute or so for nonobvious risk that mr. Dimon does in covering this fraser i will close with you because you are global footprint. What risk are out there in asia or europe that could be transmitted into our system here . Mr. Dimon the origination market. I wouldnt call a systemic risk. We do need to reform it for the sake of the industry to get mortgages. Mr. Moynihan what risk are we not taking about and what is it that we are seeing right now . Et are you talking about the Mortgage Business . No generally. Sometimes i worry just as much about whats happening outside of the bank. When you thinklk about the econy and where it goes and the risk versus the leverage and honestly theres more of outside the Banking System inside and thats something i cant guess on what shouldos watch it down terms of private lending funds that have high leverage multiples. K our industry because of the examination practices and frankly the way that companies around i can anticipate so id say its always going to be about the economy. Please be more specific when your target about private monies are you talking about the private market . Not only in mortgage that everyy single class and if you look at where leverage multiples are they tend to be done outside you posted if you like your institutions are adequately capitalized over y. So youre saying their private nonbanks that are undercapitalized with the lending they are doing . Yes the inches and their funds will be marktomarket. The impact on economy by people who dont work the same way the banking works with the company. We build reserves and we work out companies for hundreds of years literally. Other people that have the staff to doy that so therefore the liquidation process causes more ongoing damage. Thank you. We have jurisdiction over some stuff but not over lots of stuff so t what we need to be wary of internationally . When we look at it the pandemic in the war highlights the fragility of the Global Economy and therefore we have to increase our concern around Energy Security through security which will not necessarily t hae an impact in u. S. But there could be spillover effects. Forri example europe to supply shock in the Energy Market could well be a factor affecting the u. S. Economy as demand slows and they enter a highly likely recession. Theres into dependencies and these new fragility is we will have to keep an eye on on. Connect that for me. Youve identified energy and good. Whats the mechanism of transmission . . Whats the mechanism of transmission by Global Energy or food markets creating problems for you . It could result in a Material Energy shock. You could see Industrial Production shutting down and you can see people who are and that could cause discontent of the population other than the fact that theres lower demand therefore lower demand for American Goods and packs the u. S. Economy. Thank you. My time has expired. Thank you very much. The gentleman from arkansas mr. Hill was recognized for five minutes. Thank you madam chair and thank you for all of you taking away from your day jobs to spend the day with us and im glad to know you have a comfort rank a few minutes ago. Madamnk chair thank you and hope each of you got a cup of water and a cracker. A good discussion today that mr. Lucas this gust it quite well and climate stress testing and the vice chairman of the fed takes its a priority and some of you are complying with that in europe are you not . Ms. Dimon. Complying with the climate stress test over your operations in europe . We have had to be in compliance with the legal requirements. Wouldco he think that cost te company to do that . I would have to get back to you with a number. If you dont mind if you could respond in writing. And you all passed a stress test and in that analysis of sharp declines in unemployment and sharp failures in performing assets when you look at those performing assets you take climate into account, right . When you make a loan to build a tower on miami beach mr. Moynihan do not do that . Thee you have to take into account the risk and the borrower. Mr. Cason has a bill he introduced here for the majority h. R. 3571 that would require a climate stress testing and would add Capital Requirements to anyone who fails that stress test based on the panel of scientific experts advising the fed. Is this a good idea and who would like to answerul that question . Em id be happy to call on ms. Fraser. Do you like that idea . Like i say we dont have the data. Its not comparable. Are notoposals comparable with industry. Is that a fair statement water raises the read as it disclosures . Mr. Moynihan you concur with the operations in europe like you are a big banc of california so you comply with caliph ornette right . B we have to. And im sure you do a magnificent job or do you we need a federal preemption of federalar privacy law and withot aid Financial Services . I think the Financial Service industry has had her years of privacy regulation that others havent and we do a good job. Other industries have an ongoing examination process so frankly we have adjusted those rules because of that. But its powerful for a private citizen. Madam chair binax congress i hope and work work with the energy and Commerce Committee on privacy. Mr. Scharf you made a comment about the mortgage banking that mortgage banking is shifted to cythe nonbank sector. Do you think regulation had anything to do with that . Congressman there is a difference between the way banks and nonbanks are regulated. No question that degree of regulation will impact what you want to do inside the company. When doddfrank said banks and bankowned companies couldnt do Mortgage Servicing was that a bad provision . Congressman im not aware that. Maybe caused all of you to divest your mortgage portfolios even though you are the largest one to four mortgage lenders in the country. After the financial crisis if all of you were asked to lower that you would be not youd be charging a capital surcharge and is that a good idea or not and does anybody else want to follow up . Peace ill have a large Mortgage Servicing asset. Capitol requirements are very specific but its up to us to determine how much of our capitol to put into it. Say thank you. If you have more please follow. Mr. Dimon the fed has a new mandate price stability and growth of the economy and we have had a proposal by the majority here to add equity to the feds mandate pitch of the fed lucas on the price stability mandate . In my opinion, yes. And canan you write a memo tt you should have a living will or is that not necessary mr. Cecere . Yo [inaudible] we have a very simple operation. 99 of her bank is thank you thank youou very much and i yield back mr. Chair. Thank you. The gentlemanan from illinois mr. Foster who is also the chair of the task force on Artificial Intelligence is now recognized for. Five minutes. Thank you madam chair. Im amazed at how consistent the industry is an almost always with some elaborate set of logic to convince us that they should be allowed to lever more. Its interesting because we have all been forced to learn that its independent of leopard so why is it that you are asking for higher levels of leverage and it was annualized at the end of the crisis. Under an extreme event where the citys do business with your own solvent and youd be bailed out by the government thats okay. The government should assume that risk so the game youll always be and is to allowed you to lever up and expose the taxpayer to that risk in our job will always be to push back against that and demand enough levels of regulatory capitol that its very unlikely the taxpayer will be called upon to do that. So just if we do you believe the higher capitol regulatory capitol levels have prevented you from having a