Brief recess with more questions including crypto currency, Cyber Security and hiring practices. They also touched on the economy and inflation. This is an hour and 45 minutes. The committee will come to order. The chair now recognizes the gentleman from guam, mister sam nicholas for five minutes, welcome. Thank you mister chairman, can you hear me okay . Thank you. Thank you mister chairman. I want to first begin by recognizing miss fraser and citigroup, the conversation im going to have to actually involves all the panelists but i wanted to begin with her company and herself as based on our research it looks like citigroup pays five times more in interest to its depositors than the rest of the individuals sitting at the table. Miss fraser if upcorrect your deposits are yielding. 05 percent interestrate . We believe we have, well we have a variety of different deposit products and we need them to be competitive and fair. The information i have here on your basic account policy is a. 05 percent Interest Rate, is that correct . We have one of our deposit products, that is correct. And for the rest of the panel is it fair to say that my numbers here are accurate andthe remainder of you are paying about 0. 01 percent on deposits . That is inaccurate. Could you please clarify than the figure. Are basic pays about the same as citigroups, five basis points or so but we have many products that pay substantially more. And it varies. I dont know of any that pay zero. So can we clarify this and go across the board from left to right and just on the record for the American People, tell us what your basic standard savings deposit is currently yielding in your institutions . Mister chairman, im requesting the panel to respond. Lets go from left to right. We have a variety of products that range from five basis points to 200 basis points depending on the size of the deposit. The general public accounts are what im talking about,the majority of your deposits, what are they yielding . The general retail deposit would be at the lower end of that range and there are also tvs available in turn depositing. Ilcan we go across the board please chairman . The same,. 05. 5 basis points with tdifferent products yieldingmore depending on several factors. Pretty much the same as everybody else. Miss fraser. Yes, were in the same range. Mister moynahan, we have a range of projects which cover the same range of my colleagues. We have a very similar approach. I believe we are in the same range. Thank you so much mister chairman. As inflation is battering our public and as Interest Rates oare rising and causing credit card Interest Rates to go up and general consumer reInterest Rates to go up its just an acrosstheboard devastation for the americanpublic. We have had it on the record earlier today there is quote more money in their accounts and all of these Financial Institutions in other words theres a lot more deposits being held by these institutions as Interest Rates are rising. One of the only over linings and a rising Interest Rate environment is that savers are supposed to be rewarded for their savings. Were supposed to see the interest they earn on their savings accounts and get what we have here is the fed funds rate thats currently mister chairman at 2. 5 percent on the record that is coming at 2. 5 percent with our depository institutions staying between. 01 percent and. 05 percent. Which means that on risk free money being put to the fed there ranging anywhere between 2. 5 percent interest to 2. 49 percent interest on the deposits of their customers. So i wanted to ask acrosstheboard quickly mister chairman can they confirm whether or not theyre going to be increasing the Interest Rate that theyre paying to their depositors at anytime soon . You are the question. We would expect to continue to monitor rates and raise rates as appropriate given what is going on with the competition. The same, we expect to raise over time. We expect them to go up soon. Yes we will. Mister moynahan. Rates will go up in the future. Mister rogers. And mister shaw. The same. Youll back mister chairman, bank you. The gentlemans time is expired. The chairrecognizes the gentleman from North Carolina , you are now recognized for five minutes. In 60 minutes on sunday President Biden tried to downplay the negative impact of a 40 year high inflation. He basically said 8. 3 Percent Inflation isnt that bad because it hasnt spiked recently. As you also know the Second Quarter gdp was negative for the second consecutive quarter which is the textbook definition of a recession. Of course President Biden is trying to deny this as well. As the leaders of Financial Institutions that deal with American Consumers every day id like to ask you brief questions to gauge the Financial Health of the average American Consumer and for the lack of time to stick with North Carolina institutions, Mister Rogers of truist and mister of bank of america. And yes, sir noor a sentence or less. Proceedings decreasing . Consumer savings are quite stable at this puncher after having grown for quite a few months. Mister moynihan. Consumer deposits are stable. Are they using more credit than they were a yearago . Are consumers are starting to access more credit, particularly on their credit cards. Mister moynihan. Credit card balances have grown since last year but theyre back to prepandemic levels. When you factor in inflation are consumers real wages down west and mark. If you factor in inflation for most consumers real wages would be down. Real wages are down, thank you mister moynahan on the one year basis, the inflation rate exceeds the wage growth. Has the number of consumers with access to say 1000 foremergency at that going up or down . Consumers currently have more in their checking accounts so the opportunity to go up by purchasing a savings account has increased during the last few years. Mister moynihan. Consumer deposits in their accounts are multiples of where they were prepandemic. Do you think theeconomy will get worse before it gets better . Mister moynihan. I said earlier that our experts have positive gdp growth this quarter and negative gdp growth for the next couple of quarters. Thats their basic assumption on the research we have. Mister rogers. We have a very similar forecast. We see the state of our economy is not good. President bidens failed economic policies have made life worse for working families in North Carolina and across the country according to the Federal Reserve of state lewis the personal savings rate has s been declining since march of f last year and its the lowest rv since 2008. A brief survey said 60 percent of respondents have been in more Credit Card Debt that over the last year. And according to the Federal ReserveHousehold Debt surpassed 16 trillion for the First Time Ever in the Second Quarter. According to the Census Bureau the median Household Incomes have remained stagnant or declined a few years in a row. According to bank rates 56 percent of americans cannot cover a 1000 emergency expense with savings anymore. A recent abc news poll found that 69 percent of respondents said they think the us economy is getting worse. So bottom line, americans are buying less, earning less, saving less while paying more for their daily life as in 100 counties in North Carolina. Life seems to have gotten worse under President Biden and i believeits time he admits it thank you for your time. I healed back. Hathe gentleman from n,illinois Mister Kasten who is also the vice chair of the subcommittee on investors protection, entrepreneurship and Capital Markets is now recognized for five minutes. Thank you madam chair and thank you all for a long day. One what it the statement i want to start with which is obvious but all of you do a wonderful job and iappreciate your work to minimize the loss to Equity Capital and honoring your obligations to shareholders. If any of you disagree please chime in but i want tostart because i want to focus on risk and return. Two years ago mister diamond, ms. Fraser, mister moynahan and the Senate Banking committee, senator warren asked you all i believe essentially to acknowledge that you are using new tools and services to gallic, gauge climate risk to your portfolios. I want to focus on you mister sharp because you have a large interest in mortgage but in the two years since our you changing your lending, your diligence standards for properties exposed to climate risk. Wildfires, forest fires. Youve had two years to get those rests, have you changed your standards . Its something we talk a lot about and weve always factored some of those risks into the properties we finance. So it continues to be something that we talk about. Whether or not weve specifically changed the magnitude of that, that i cant answer right now. I dont mean it is a critical question. Theres been data suggesting there is a disproportionate flow of those mortgages to danny and freddie and those high risk areas and if you dont know off the top of your head we can followup offline but theres been recording on that and id like to see the data because its obviously a concern if ofwe are movingrests on to the taxpayers. We can certainly go back and look at it with you. Shifting to the return side, mister diamond i think this is a dumb question but im sure youll tell me if it is. Would you support legislation that compels you to preferentially invest in industries that were struggling to attract capital . I would not. Okay. I assumed that would be your answer. I ask that because over the last 12 years the entire oil and gas Energy Sector is running at seven times multiple and tesla, first energy, all the leading lights of the clean Energy Running at 10 times that number for the most part and yet we are seeing a lot of my colleagues suggest that we should prevent the Financial Sector from investing in areas that are getting high returns out of some completely bastardized theory of worldcapitalism, whatever that means. The state Financial Officers foundation, a rightwing backed group is intentionally promoting that they are pushing state legislation across the country and as recently as july west virginias treasurer announced he was canceling millions of dollars in state contracts the five banks including yours and wells fargo. I think you said their ne analysis was disconnected from the facts. Wells fargo said you disagreed with the decision. Subsequent to thatfederated hermes announced they are no longer going to fund this group. As of a few weeks ago j. P. Morgan and wells fargo were unfunding this state financial organization. Are you still providing resources to this organization that is spreading policies encouraging you to us and in places that are struggling to attract capital. Let me get back to you and i look at it if you i can. Is wells fargo still supporting the stateFinancial Officers foundation . I dont know but i will look at it o. Can either of you you will not continue to fund an organization spreading disinformation that is blocking the capital sector from freely allocating capital. I wont commituntil i read something but if that were true id probablycancel it. Mister scharf. I agree with mister diamond. The only people supporting this are groups with active agendas. I want to see you continue to minimize equity risk. I want to see you continue to earn shareholder returns and leave a better planet for our kids. I would hope that youd all Work Together with us on that. Thank you and i yield back. The gentleman from m indiana mister hollingsworth is now recognized for five minutes. Good afternoon, im excited to be here with each of you. Before i get started Mister Moynihan i want to let you know , she has been my team member for a couple of years now buton monday she becomes a bank of America Team Member aboutwhich she is very excited soi hope youll take good care of her and recognize the talent she has shown in her office, im sure she will do the same at bank of america. Her father already works for us. You should have told us. I appreciate the opportunity to chat about these issues. What im interested in is the state of the economy but i abwant to delve deeper into this. We are as of today at a truly unprecedented pace unwinding the quantitative easing as well as the accommodative Monetary Policy the last couple of years. Those the fed continues to talk about soft landings, i worry that this pace will be to a harder landing then perhaps they are yet forecasting. But there are a couple of ballots to that. One very strong corporate Balance Sheets, earnings have been relatively resilient but Balance Sheet are better than they ever been in the s p 500. Balance sheets are better than they quite literally ever been and you touched on this but one thing i continue to notice is the tremendous amount of savings that households have in excess of the savings they had in 2019. Have you begun to see households mobilizing that or not begun to see them mobilize that because this is important to real underlying economic demands Going Forward and the fate of some of the extra costs that are being incurred and with all due respect to mister but theres a difference between a decline in savings rate and a decline in the level of savings so im curious to start with you Mister Moynihan and im asked mister diamond about the same thing. Consumers have multiples of the amount of money they had prepandemic and that amount is stable right now. It has been growing for the last year and a half of the last Stimulus Group growing, growing up in tax time, came down a little bit when they faced expectation andnow its back up so its basically stable. We put out data from our institute every month so you can see it. Thank you, mister diamond. High savings, jobs available, job rate is going up at the lower end. Even that going up a little bit is so much lower than theyve been in 50 years. Even when we go to recession but you have to ask later,not right now. The bad news is later. Mister fraser. Similarly its always a little dangerous to work out averages from what we see across the spectrum but stability in the deposits and the rate is still an elevated. And equally important, still low Credit Credit losses across the board. I would assume the controller has been the last couple of years blocking in very low rates mixing in their maturity ladders to make sure theydont face upcoming maturities. Are the three of you seeing any stress incorporates with higher rates . Not even in the sponsored high leverage scenarios . In the markets. Not for those types of credits but its harder to transact. One of the things we continue to talk about up here is ensuring that we are investing enough in research and development. We want to maintain the Significant Competitive advantage we have in developing new technologies whether thats at Research Institutions through the country or in innovative smart companies. What weve noticed is dc funding is declining dramatically and in some estimates theres 1 trillion gap between what we funded in the last five years and where what were likely to find in the next five years and some of that is reluctance of companies to recognize valuations versus what they might have been x months ago but i wonder if you seen an uptick in earliers answer backed funds seeking loans instead of equity transactions and the values there seem versus what they were before. Anybody want to comment we havent seen evidence but it is every day. You generally dont borrow money so youre not going to see a lot of that. I heard more were inclined to do so rather than recognized significant down rounds. With that illyield back. The gentlewoman from massachusetts, miss presley sswho is also the vice chair of the subcommittee on Consumer Protection and Financial Institutions is now recognized for five minutes. Thank you madam chair for holding this critical hearing and ensuring oversight laser priority to this committee. While we have the cfo in front of us i want to take a moment for the official record to center that which is most important and that is the workers. The bank tellers who work day in and day out processing transactions to keep facilities clean and safe. Often i think their labor is lost in these hearings or worse used as cover up for talking points. Your workers deserve better and they deserve to be respected. Mister sharf, workers at wells fargohave been advocating for a greater voice on the job for years. For the record will you commit to neutrality in Workers Organizing efforts e and ensure workers who speak out do not face retaliation and im looking for a yes, sir number. We believe that we are best in a direct relationship