Goldman sachs, wells fargo. Senate Banking Committee oversight hearing is about 3 hours. Senator scott, thank you for your work on this. The eight bank ceos appearing before us today lead the biggest global systematic banks in the United States of america. Your banks hold nearly 15 trillion in assets, manage trillions of dollars of investments and retirement accounts, fund the Biggest Companies in the country. You hold nearly half of the nations deposits, more than 80 trillion in client assets. Your banks touch almost every aspect of our Financial System in workingamericans money even if they are not your customers. You may be private companies but the mistakes you make dont just affect you, they dont even affect just your shareholders or just your workers, the mistakes you make affect the whole economy and as we remember from 2008, 2009 they can certainly affect american taxpayers. That amount of enormous power should also come with enormous responsibility. We finally have financial watchdogs in place who are now serious about the need for these protections. Common sense rules to ensurest that banks can withstand losses frombe the risky wrest financial shenanigans that create no value to the real economy. These rules protect against risky trading and derivative activity in wall street. If you waited at a bus stop in washington or flown out of International Airport you have probably seen ads urging people to stop and the eight of you surely know your audience and you havent stopped there. You even have Gone National in that campaign pouring money into ads for sunday night football. Campaign wage by your lobbyists to prevent financial watchdogs from putting in place these stronger Capital Requirements to protect our Banking System and our economy. Listening to these ads we hear all kinds of claims of how stronger rules will raise the cost of mortgages and stop Small Business from making loans. Wall street banks are actually saying that cracking down on them will, quote, hurt working families, really . Youre going the say that cracking down on wall street is going to hurt working families . You are really going to claim that . The economicac endeavor stationf 2008 is what hurt working families. Utah, minnesota, california, rhode island, montana and South Carolina, across the country didnt know if they could get access to their money and make payroll. Most americans think of banks capital if you force people to think about it at all. Most americans think money stashed in a vault somewhere. Capital is just a way to fund loans and investments and risky activity in a way that can absorb losses if things go south. Shareholders and investors are on the hook not taxpayers. Be clear. Nothing would stop banks to making loans to veterans, Small Businesses. Absolutely nothing. The reason banks might make fewer loans in the future is the same reason we have been seenless banking activity in years. On you know that, we all know that. Risky trading than boring bread and butter Small Business lending. In exchange, maybe, small executive, small executive bonuses less profit than wall street banks. What your banks want is to maximize early profits, we understand that. The cost to everything and everyone else be dammed. We have seen over and over what a problem that is and the harm the Current System does in place like ohio, earlier this year when i heard about spbs collapse, my mind immediately went to another crisis in my state in east palestine, ohio. The place wheree the Train Derailment happened and affected dramatic community in my state. Companies cut cost. Working people always pay the price andwe thats why people he wall street and thats why people hate washington because the lobbying campaigns worked. We saw when you passed doddfrank during financialal crisis. Now its half time. They chose to ignore those risks because it meant payout for executives at the time and we should be concerned when bigger banks are doing the same thing with Capital Requirements. Thats why we need to pay the bipartisan recoupin act, thank u senator scott for that to hold bank accountables for driving their banks into the ground. Thats why we need Strong Capital rules. After the failures we are reminded about how fragile our Banking System could be and as a result your banks only even got more powerful. Its fair to take stock how you are using that power. I appreciate the long overdue increases and wages, thank you for that. At least one of your banks is real has made real efforts to get rid of Overdraft Fees, thank you for that. But your banks need to do far better in meeting customers where they are. You should be cutting prices where consumers increasing opportunity for employees an increasing diversity with your executive rank andnd supporting efforts if they so choose to unionize. The reason for this hearing every year to hold the biggest banks accountable to the American Public. I thank each of you for being here. I appreciate you all coming for this hearing. We want to hear from you, what will you do to support workers to invest in the real economy to put wall street to work for main street. Senator scott. Thank you u for the long list of ceos who have come to talk with us about how the impacts of our Regulatory Environment will impact everyday consumers and i hope that you all, some of the things that i will say are redundant. Nothing many these proposals will stop your bankspe from lending to Small Businesses or firsttime home buyers. Who in america means bossle 3 . It is simply requiring more capital on the sidelines which means fewer dollars to lend to Small Businesses, firsttime home buyers and the actual impact for higher regulatory standard is fewer dollars to lend to americans who need desperately to be engaged in the process of achieving the American Dream that is typically defined by having access to capital, if you work really hard, keep your life in order, you can have a good quality middleclass life. Equity comes from having capital. Having capital means because you are born with it or have access to it because you have idea or vision that will make your community or this nation better. When that happens you go to a lending facility, we call a bank or a outside the market and you find that that capital that allows you to start your business and as you start your business and creates a profit and that profit allows you to experience the American Dream. If you have a home, look at the differences between africanamericans and majority population and net worth tenfold difference. Much of the difference is equity in a home. That would put much more capital on the sidelines, we should ask how does that translate for the average american livering and working paycheck to paycheck. My thought is, thats a devastating impact to access to capital that makes the American Dream harder to achieve and access to capital for some folks who started where i started virtually impossible. I want to talk about three things. The job the regulators should u be doing and workplace regulators cultivate. The fact of the matter is that thisto one proposal could have a devastating impact on Small Businesses and i would like for you to address that now or during questions. Last month i let a letter to the fdic said occ calling on them to withdraw this misguided proposal because American Families folks who will bear the burdensome regulations simply cant afford it. The letter signed by nearly 80 of the republican colleagues that span it is entire ideological spectrum and the country. Something that couldsi be avoidd simply the banking regulators would listen to common sense and withdraw the proposal and frankly last month when the regulators spoke, even some of mymy democrat colleagues agreed with our concerns on the negative impacts brought to us by burdensome Regulatory Environment. Let me be clear, this proposal could limit and frankly i think will limit the following. Availability of credit for housing for those who need it most, severely restrict lending for Small Businesses that are still rebounding from the pandemic and cut into the Retirement Savings for hardworking americans like teachers, police officers,re firefighters when they are dealing with higher prices and runpa away inflation brought by the radical left. These are very, very serious and real concerns but americans shouldnt just hear about the concerns from those of us who arent senators, we should hear it from those who actually run the institutions that they have and have confidence in. As formers Business Owner mysef i believe that you all as the daytoday operators of these businesses, not elected officials have a better sense of what the communities are facing the challenges brought upon the communities by these higher standards. Last year barr last month said that the new bossle end game will only impact 40 of the banks in our country. Twothirds of all the loans processed will be negatively impacted by the end game proposal. Thats 60 billion in Small Business loans in 2021, e 250 billion negatively impacd and the definition of negative, higher Interest Rates or fewer loans. In 2022, in my own state of South Carolina, that translates into 550 million having fewer loans and 3 billion in 2022 and Home Mortgage originations. Decrease lending means increase Financial Hardship and increase Financial Hardship means a reduction in opportunity. Thats my ultimate concern, reducing opportunity for every day americans. At the end of the day, these consequences will create a ceiling for lowincome americans and it wont be a ceiling made of glass, instead it will be made of concrete. We simply cant let that happen. The second item i want to discuss withbe you all today concerns onslaught of rules and proposals targeting your institutions and thepl Banking System at large. In recent months we have seen proposals or final rules all the way from Climate Risk Management to the Community Reinvestment act. None of the proposals exist in a vacuum. L you should. Its called common sense. And remains incumbent upon each of you to base lending decisions on risks you can reasonably assess like weather or credit risk, not, however, perceived political, rhetorical or Reputational Risk beyond explicit cost passed onto the consumers. Finally, number 3, we must emphasize and turn our attention to the performance of our regulators and their core mission, the supervision of your banks and the stability of our financial economy. Just last spring we saw the failures of several banks which shook consumer confidence. Since then the, theres been nonstop finger pointing by our regulators and the aftermath of failures i was critical of the failed Bank Executives because thats where the dollar should stop. The buck stops with the executives. But you cant see that in a vacuum, you have to ask yourself the question, what was the role of the regulators, what do they do, what do they see, how do they respond to that . Your institutions have teams of examiners from the regulatory agencies in your offices every day and i can tell by your voices youre really excited to see them when you show up but the truth is that we, the American People, deserve to understand the complexity of the web that exist that makes the headwinds real for lending money to wouldbe entrepreneurs or firsttime home buyers. Let me close with this. Were not on the same page on a lot ofy issues. I think there are times where banks goo too the far in getting involved in politics. But when it comes to your objective of creating access to create, to resources for the American People and the American Dream, thats where i hope you find our attention today, focusing on an environment that is easier for the average american to experience the American Dream or is made harder because of the challenges brought to them by this government. Thank you, senator scott. I would like to introduce our eight witnesses andam then im going to ask each to stand and raise your right hand and swear you in. Ceo and president of wells fargo, welcome. Bank of america welcome. Jerry chen, ceo of jpmorgan chase, welcome. Ceo of citigroup, welcome. Ceo of state street, welcome to. Robert, ceo of ny mellon. And thank you for joining us, Robert Mellon of golden stocks. And morgan stanley. Please stand for a moment and raise your right hand. Do you swear, or affirm that the testimony you are about to give is the truth, the whole truth and nothing but the truth, so help you god . Thank you, take your seat, and mr. Scharf . Thank you, mr. Brown, and the committee, thank you for the opportunity to be here today. I look forward to talking with you about the contributions wells fargo is making to support our customers, communities, employees, and to ensure the Banking System is strong and resilient. In march of this year, we also the failure of several banks rapidly create instability in certain parts of the Banking Sector. Though the causes were specific to the institutions that failed, markets became concerned that the issues were broader, in response, wells fargo, along with other banks here today stood as a source of strength and stability. The strength of our institution allowed us to lend support in a time of need. This helped stabilize the system, ease concerned. And keep a challenge from becoming a much broader crisis, i am proud of the role we were able to play. Wells fargos strength comes from Strong Financial profile, disciplined financial risk management, and a commitment to run our business with high standards. Our top priority continues to be building and running a well controlled company. Over the past four years, we have simplified our Business Model and have exited or downsized several businesses. We are primarily a u. S. Domestic bank and we do not have many complexities that are running in largescale business banks. A legal entity structure and footprint are far simpler than many competitors. Proximately 90 of our revenues come from the United States. We proudly serve 13 u. S. Households and more than 10 of Small Businesses in the u. S. We are leading middle Market Banking provider here. We maintain one of the largest French Networks in the nation and we have more rural branches than any other large bank. Nearly 30 of our branches are in low or moderate income census tracts. We are constantly improving how we serve our customers and communities. We are investing in our branches, Building Digital capabilities to complement our physical presence and we are investing in the products we offer to our customers. Since 2019, we have taken numerous steps to reduce and simplify fees, which, as of yearend 2022 have resulted in an average consumer deposit count paying approximately 25 less in fees per year. We give customers the choice of account that offers overdraft protection or one that is not subject to Overdraft Fees. We eliminated Nonsufficient Fund Fees and transfer fees for customers enrolled in overdraft protection. We introduced early payday, which makes eligible direct deposits available up to two days early. Extra day grace, which gives eligible customers an additional business day to make deposits to avoid Overdraft Fees, and flex loan, a new digital only small dollar loan. I am also proud of the role we play in our communities, where we seek to have brought impact. Last year, people who work at wells fargo contributed over 700,000 hours of volunteer service. I have spoken in the past of our decision to take the 420 million in fees we received from administering the ppp program and donating them through local partners to Small Businesses in need. Through the first half of 2023, these funds of have helped support 203,000 Small Businesses, the majority of them diverse owned, and helped preserve or create nearly 254,000 jobs. Finally, we believe our employees are our greatest asset. We invested them and we listen to them. Since 2019 we have increased wages for u. S. Hourly employees by nearly 20 and increase the average pay rate for tellers, by 34 . In 2022 we increase the minimum base pay for more than 40,000 please and we invested in an additional 200 million employee development. We have several ways for employees to share ideas or voice concerns. Their voice matters. We take their feedback seriously and we act on their comments. For example, in our consumer bank, approximately 4000 improvement ideas that are in place had submitted this year have been implemented or are in the process for future implementation. Engaging directly with our employees in this way is critical to improving the Work Experience at wells fargo. I want to close by thinking our employees. Their dedication is unmatched. I am thankful for all that they do and i remain committed to leading wells fargo to being one of the most respected Financial Institutions in the country. Thank you, and i welcome your questions. Thank you, welcome. Chairman brown, Ranking Member scott, dissly was numbers of the committee, good morning. I am here, once again, to proudly represent my 212,000 bank of america and teammates. Today i will provide an update from last year and how we delivered responsive growth for our clients, our teammates, communities and shareholders every day. Responsible Growth Continues to deliver strong results during times of relative calm as well as during central challenging environments such as earlier this year. We saw market turbulence as a number of Financial Institutions face challenges due to their unique Business Model. Bank of america, as we did during the pandemic along with mcauley companies, served as a source of strength and stability during these times. And we did this all while continuing to strengthen our Balance Sheet. We are set with the highest capitol liquidity firms in all of our metrics exceed those requirements. And while we have declared that we have to propose new capitol rules, we remind you that in recent years, we have shown you just how important it is to have these institutions be able to position our Balance Sheets to help customers and clients in times of stress. That is why we continue to play an active role in help inform the future of this industry, including comments on proposed capitol. We believe the capitol accumulated by the industry should continue to serve the customers in americas economy, not be subject to capture by a regulatory model. The access should be able to grow the u. S. Economy and support the Business Plan of Small Business and mediumsized businesses, drop consumers recognize the American Dream. Now, a few specific examples of progress on responsible growth. At bank of america we serve 60 million American Consumers, 11 million Small Business clients and tens of thousands of clients. We continue to focus on delivering Expert Network guidance across our hightech physical network. We have 3900 Financial Centers and 15,500 atms. We opened 58 new Financial Centers last year and renovated 780 more than. In addition to these branches we have tens of thousands of teammates serving over 100 local markets around the country. The next four years we will expand to birmingham medicine, new orleans, milwaukee, and huntsville, that will bring our full range of services and solutions to better serve clients and help growth and development. We also developed to low and moderate Income Customers including approximately 9 billion in loans to Small Businesses into 2022, and in addition we provided nearly 8 billion in debt and financing creating more than 10,000 units of Affordable Housing and committed 50 billion to Affordable Homeownership Program that will help 60,000 American Families purchase a home to ensure the American Dream. Over the last few years we invested in 24 solutions. 2 billion outstanding and helped seek more than 150 private equity funds run by women and diverse private equity entrepreneurs. Our clients also continue to look to us to help them achieve the transition to secure low carbon economy, with tens of trillions of dollars needed, this transition creates significant opportunities for our clients and our company. This transition has to be led by the private sector. For the 12th year in a row to make earning less than 50,000 annually will not seek any increase in medical premiums. Our teams shared an extra bonus generating Equity Ownership to over 200,000 teammates. We are a great place to work recognized by external parties and teammates. Our turnover rate is approaching alltime lows. The response to growth also means supporting communities where they live and work. We made 360 million in philanthropic investments. We reported nearly 200 million of the year. We also created opportunity for employment. We are in the second leg of a 10,000 to make hiring that is 20,000 total from low and moderate income communities. Importantly, we deliver for our shareholders. We deliver strong returns. We continue to increase the common dividend and continue to return capital shareholders. This is driving responsible growth. This is american capitalism at work. Thank you. Mr. Diamond, welcome. Thank you, chairman brown, Ranking Member scott, members of the committee. I appreciate the opportunity to talk about j. P. Morgan chase. The United States has the best Financial System in the world. Retail banks, investment banks, asset managers, hedge funds serve the american economy. The country benefits from banks and Credit Unions of all sizes. I am very proud of this company. In the u. S. We serve more than 80 million customers, 6 million Small Businesses. We have more than 4800 branches now in 48 states and washington, d. C. Which puts a chase branch in a 10 minute drive for 60 of the population. We are a top lender and every rural state serving governments, hospitals, universities and manufacturers providing almost 100 billion in Credit Capital to clients in rural and small towns. J. P. Morgan chase extended to total 1. 7 trillion in 2023. We moved 10 trillion around the world every day in 160 countries daily. The country benefits from banks and Credit Unions of all sizes serving all corners. We must acknowledge that some things can only be done by large and complex banks. Things that are essential to a thriving economy. Large banks in this panel serve american interests overseas. Bank of americas largest multinational corporations around the world we banked other banks and institutions such as insurance companies, world bank, imf, community banks, cdf eyes, large american big support the deepest, transparent Capital Markets in the world. We underwrite large and complex bonds which provide governments financing for roads, bridges, schools, hospitals, and airports. We help americans to finance their dreams. Our collective work is essential in troubled times. In good times large banks help america save, invest, and grow. We underwrite stocks and bonds to create investments for savers and raise money for companies feeling job creation and business development. As guardians of the Financial System we support our government to combat future claims crimes. We are a force of good for the country and citizens and Global Economy pick in troubled times, large banks provide market stability to protect customers and employees alike. As demonstrated recently during the Regional Bank turmoil, large banks stepped in to provide liquidity and protect consumers, savers, and employers. During covid we saw large banks provide significant support extending tens of billions of dollars of credit and capital to struggling businesses, local governments, and hospitals at a time when they needed it the most. Banks waved hundreds of millions of dollars in fees and postpone payments for customer struggling to make ends meet. Despite zero evidence that the banks capitalized, this endgame rolled 10 years in the making of enacted would increase capital crimes about 25 for the largest banks. None of these proposed changes would have effectively protect prevented the Silicon Valley bank failure. This would have a difficult effect on all sizes of american households in ways that have not been studied, contemplated, or shared. Loans would be more expensive and hard to assess for low and middle income borrowers. Savings for retirement or College Returns for Asset Management and market funds and Pension Funds. Government infrastructure will become more expensive with Capital Market activities more than double, translating into a higher cost to build hospitals, ridges, and roads. For badge Bridge Companies Beverage Companies and Farm Companies everything from a can of soda to parts will be impacted. This will actually increase risk. This will result in increased shift away to regulated markets which was not also studied. This will be out of the sight of regulators unable to see the next crisis brewing. I fear that impose now study later has become a troublesome new theme in washington. Theres been a number of consumer focused products were virtually no Economic Analysis was performed to determine the individual or collective impact of these roles of consumers, Small Businesses, low income families, markets, or the economy. The debate should be about the right regulation to keep americas Banking System the best in the world. I urge regulators to be thoughtful about the effect of arbitrary proposals and the impact on the economy. Good regulations are critical to maintain the strength of our Banking System. Our nation should give thanks to the secretary for their work on tough times following russias invasion of ukraine and the steps that they took this spring. These are excellent examples of sharing information transparently to protect the Financial System and the country. I would like to speak to my 300,000 employees to close and maybe employees around the world for everything that they do every day in hundreds of communities around the world serving consumers, businesses large and small, farms, cities, schools, states, hospitals around the clock, 24 7. Thank you for the great thing you do for this country. Thank you. Chairman brown, Ranking Member scott, and esteemed members of the committee. Take you for the opportunity to speak for you this morning. As ceo i have the opportunity to lead a 211yearold institution that supports clients in nearly 160 markets around the world. We have 240,000 employees of whom i could not be more proud to lead and were grateful to. Through decades of geopolitical shifts and technological advances, weve seen how the u. S. Banking system is truly unmatched. The isolated Bank Failures of the spring may have tested the confidence of our people in our industry, but i am proud of how the industry including my peers sitting around me today, how we came together and worked with government to affirm the underlying strength and stability of the system. As we chart a path forward, we need to make sure we do not inadvertently upend the very system that we have. Our Financial System is the envy of others because it is underpinned by the most competitive Banking System and the deepest Capital Markets. We are home to banks of all sizes each with an Important Role to play. Collectively our banks serve as engines of growth supporting businesses and households and promoting access to Financial Services and hardtoreach communities. For american multinationals, global banks such as ours offer the size and scale to help them compete overseas without having to rely on foreign banks. We finance supply chains and partner with americans Top Companies to bring products and services to American Consumers at affordable prices. We use our robust Balance Sheets to fund transformational projects. Last year alone city work was stated and local governments to raise or finance nearly 31 billion in infrastructure investment. That included financing 35,000 Affordable Housing units across 32 states that saw us as number one Affordable Housing lender. We provide a variety of products to drive Financial Inclusion and work with cdf eyes and mdis to reach the underserved. As a proud participant of project reach we are collating the work stream that is focused on strengthening mdis. We are also engaged in initiatives to increase access to credit and reduce the number of americans who are credit invisible. The strength of our Financial System becomes most critical in the outlook for the economy weakens. Although we certainly dont see a drastic downturn on the horizon, history suggests that a recession is possible given the macroeconomic factors at play. They include persistent inflation and services, rising debt, and a slowdown in Global Growth as well as two major conflicts in europe and the middle east. We are beginning to see some concerning signs of a lower fica score segment of our customers. This is unfortunately the very same group that feels any tightening of credit first. Raising Capital Requirements by as much as 20 on an industry that all participants believe is wellcapitalized is a bad idea in any environment. It becomes even more problematic with Economic Uncertainty ahead. Almost every element of the endgame proposal would make lending and other financial activities more expensive especially for Smaller Companies and consumers. The most likely result of increasing the cost of banks to offer a variety of products is that it would move more activity and less regulated non bank sector which carries its own risk for consumers and the stability of the Financial System. It would also diminish our ability to compete internationally especially with european counterparts. I raise these concerns as i know we all share the same goal. That is of maintaining a strong and competitive Banking System that supports a resilient economy. Thank you and i look forward to answering your questions later today. Thank you. Mr. O hanley, welcome. Chairman brown, Ranking Member scott, members of the committee, i am proud to serve as the chairman and ceo of state street. We are not a consumer bank, commercial bank, mortgage bank, or investment bank. We do not serve individual customers directly and we have no retail branches. What we are is highly focused on two lines of business. Investment servicing and Investment Management. The investment servicing business which includes related services allows our clients to invest and transact across the globe in a safe and efficient manner. Our Investment Management division is a pioneer in quantitative investing, creator of many of the worlds first etfs and the worlds fourth largest asset manager. Our lowcost diversified Investment Products are the Building Blocks of savings and investments around the world. Both business lines have the same corporate purpose, to create better investment outcomes for the Institutional Investors and the people they serve. Our direct clients or institutions across the globe Pension Funds, mutual funds, central banks, sovereign wealth funds and dominance foundations and insurance companies, holders of assets for the benefits of individuals such as retirees, savers, or students. I would like to focus a bit today on the value and importance of custody banks. Quite simply, strong affective custody combined with innovation in the Asset Management industry is the backbone of our democratized Capital Market inviting, providing access in a secure and costeffective manner to the Investment Products they need to meet retirement and other financial goals. The safekeeping custody banks provided shares investor assets are held and accounted for where and how they should be. This has not always been the case. From the collapse of Investment Trusts in the 1930s to the failure of the studebaker pension fund in 1963 to the misappropriation of the fund prior to Robert Maxwells death in 1991 to the made off scandal. Investors are put at risk when theres no proper custody of assets. In contrast, proper custody regulation such as the Investment Company act of 1940 coupled with the enormous investments in Tech Knowledge he by todays custody banks has produced a modern time near perfect track record of safekeeping assets. The reason events around ftx which did not use bank custodians, demonstrate that more remains to be done to protect assets in the Financial System. In the emerging Digital Finance base, a comprehensive, effective Regulatory Framework is not yet in place and the consequences are clear. State street is subject to the highest level of regulation and supervision. We are wellcapitalized both stressed and unstressed. The Balance Sheet is conservatively positioned to deliver liquidity when clients need it. We are subject to extensive resolution recovery plans. We are approving Stores Source of stability for our customers in times of stress. Despite the challenges of covid and the banking stress earlier this year the banks before you have done their jobs exceedingly well partnering with regulators during covid and providing stability to the Financial System. I am proud of our Strong Performance over the stressful times. Looking forward, the geopolitical environment is complex and unpredictable. The u. S. And the Global Economic recovery is uncertain as we all navigate higher Interest Rates and dump loans. The Financial Services Regulatory Environment in the u. S. Is in flux in many cases with unclear goals. From a state street perspective im concerned with u. S. Banking regulators capital proposal which i fear could negatively impact the u. S. Economy by limiting bank credit extension. It could impair the ability for banks like state street to continue to provide high quality custody and management services. I am concerned by the sec proposed safekeeping role with no clear rationale challenging some of the foundational elements of custody baking and in effect destroys the now Perfect Service provided to investors. I hope these proposals can be adjusted. For if not we are at risk of a negative economic market and individual outcomes Going Forward. I am very proud of our company, our Diverse Workforce and the role we play in the Financial System. State street and the other banks here are the most well cup and technologically advanced firms in the world. They are essential to competitiveness and prosperity. I look forward to our dialogue today. Thank you. Good morning, chair brown, Ranking Member scott and members of the committee. I have had the honor of serving as the ceo of bny mellon for just over a year. I take this responsibility very seriously. As a company we work for a strong, competitive Banking System. We serve customers and communities. We support the economy and preserve u. S. Economic leadership. My appreciation for this role has only grown as i get to know our history, our clients, our people, and our culture. We start with who we are. We are the nations oldest bank founded by Alexander Hamilton in 1784. Today, we are a global Financial Services company with 50,000 employees. Our client base is varied ranging from governments and Pension Funds to corporations and financial funds. These clients will have different needs and roles in the economy. We provide the services to put their money to work, keeping it safe, moving it, and managing it. While we are proud of our history and our leading market positions we do not take them for granted. They are constant reminders to earn trust and plan for the longterm. We know that the economy will face challenges. Its not a matter of if, but when and for how long. It is critical that we are prepared to operate through these different conditions being prepared to prevent, respond, and recover. This is what we mean by resiliency. It is a basic concept and a shared goal amongst our clients, regulators, and other stakeholders. It is embedded in our strategy. One part of being prepared is Financial Resiliency having enough capital and liquidity to whether an expected market stress. We have a strong track record and customers consistently look to us as a dependable provider during market disruptions. We aim to manage our Balance Sheet conservatively with a high portion of cash and liquid assets to adjust for changing market conditions. Another part of being prepared is operational resiliency having the technology, people, and processes in place to respond to events that could disrupt operations. I am very proud of the hard work our teams have put in to keep markets running smoothly for record volatility and volumes during the pandemic, wars, and market stresses. This work happens behind the scenes and i want to commend our people who have made this happen. We have a long legacy of first as a company to solve problems and help move the country forward. We provided the first loan to the United States and we were the first stock listed on the new york stock exchange. These actions taken for granted today were financial innovations at the time. We cannot be complacent. Markets are uncertain. We must adapt and address new risks as we plan and prepare for the future. U. S. Leadership on Technology Including on cyber, distributed ledger technology, and Artificial Intelligence is important for the economy. This will require diligence and innovation by the public and private sectors to address them in a responsible way. Finally, i would like to close with an emphasis on a more than 50,000 employees who do hard work to keep our company and Global Markets running. Our goal is to drive a spirit of ownership, shared responsibility and mutual success. Equity ownership in the company is an important part of this. I am particularly proud of the bk shares program to grant equity to employees who otherwise would not receive stock. This has benefited more than 45,000 employees and allowed many of them to become first time participants in the Capital Markets they help to serve. This is just one example of our culture and commitment to invest in our people and the companys longterm success. Thank you for your time and im happy to answer any questions you may have. Thank you. Thank you chairman brown, Ranking Member scott, numbers of the committee, thank you for giving me the opportunity to testify. I am proud to serve as the chairman and ceo of Goldman Sachs. I lead our talented team of people around the world as they worked tirelessly to serve our clients. We have a deep history spanning 150 years as a Global Leader in Investment Management. Our size, will reach and capabilities allows us to provide tailored services and products aiding institutions, businesses of all sizes and individuals in achieving financial goals. We set the center of the u. S. Capital market which forms the bedrock of the Financial System and help drive innovation. 75 financing for u. S. Businesses is conducted through Capital Markets. Our people and commitment on buying and selling businesses. In particular, Goldman Sachs serves as a risk advisor the raisin fluctuations and commodity price volatility for interestrate risks and various forms of credits. Local governments connect with schools and hospitals and road. Reconnect with clients on jobs that can be created and economies to span. We facilitate these activities because of the strength and resiliency of the Balance Sheet. Our capital has nearly tripled. Liquidity has increased nearly 5 times and leverage has increased by half. The Federal Reserves stress test consistently confirms that all of us have sufficient capital to withstand a severe global recession. As an example, the scenario has included a 50 decline of equity prices within a year to the Global Market that also features dramatic instantaneous declines in prices. We have the finest and most innovative Financial Institutions of the world represented here today. We all serve as a source of strength for the economy throughout the pandemic with the korean war and Regional Banks. The Federal Reserve chairman powell and treasury secretary and many officials of both parties across the administrations have repeatedly stated that the largest banks are strong and well capitalized. In the wake of significant interestrate hikes, i believe the u. S. Economy has proven to be more resilient than expected. The trances of recession have increased frequency further tightening of financial conditions. It becomes more expensive to finance. The geopolitical stressors associated with ukraine, china, and the middle east could impact Economic Growth and stability around the world. Against this backdrop, one headwind is the finalization of the new capital. These rules were conceived to create a common set of International Capital standards without raising the aggregate amount of capital. U. S. Proposal does exactly the opposite. It is significantly more stringent than any other jurisdiction and would increase our capital. Although this is the result of a number of over calibration throughout the proposal i want to highlight just one of the many issues that is particularly punitive to Capital Markets activities. This proposal nearly doubles the capital for market activity. This is simply layered on top of the local market shock i discussed moments ago without any consideration. As a result banks will need to hold capital for many of the exact same risks associated with those market activities. As of the third quarter, the institutions most impacted amount to two thirds of lending and Capital Market activity in the u. S. In addition, since 2010, these punitive regulatory measures run the risk of harming Capital Market strength globally. As well as pushing global activity overseas and outside of the regulated Banking Sector. We believe that this resulted in an increased cost for airlines, manufacturers, food producers, pensions and mutual funds, for Capital Requirements and Clean Energy Equity projects that would increase our capital eight times friend grant transactions we enter into. Systemic Financial Stability is critical to the functioning of the u. S. Economy. We should ensure we are only taking actions to support our economy. Thank you. I would be happy to take any questions. Thank you. I am honored to represent our employees today and for the last 14 years as the chairman and ceo. In 2021, we were still battling an extraordinary Public Health crisis. The economy was supportive with monetary and fiscal stimulus and inflation was low. While inflation has receded, the macroeconomic environment continues to be very complex. We also have substantial geopolitical challenges today. We help advise private companies for their financing needs. That includes raising equity and debt capital to fund agribusinesses, invest in infrastructure with Pension Funds, mutual funds, and trade many assets around the globe. We manage nearly 6. 2 trillion in assets for individuals as well as institutions like endowments, Pension Funds that manage the retirement and public employees. Our services help families save money for retirement and for college and for a mortgage to build homeownership. Not china, not the uk has a system remotely. Large u. S. Banks have undergone a dramatic change in the capital liquidity profile since the financial crisis 15 years ago when the u. S. Government acted decisively and quickly in implementing these reforms. As we saw earlier this year there was a crisis among some Regional Banks. It was not a banking crisis. It was a crisis of three banks. It was in the spring and was quickly averted by prompt regulatory action. With the strength and support from these large banks, we along with three other banks will provide 30 billion in uninsured deposits to assist the regulators so they can manage this resolution. After being part of the problem of the 2008 financial crisis to have the financial strength and stability to be part of the solution. Current proposals to put additional Capital Requirements of you has as you have heard today on all the largest banks this socalled basil three endgame need to consider the impact to the u. S. Economy and what it will mean for business and consumers. Regulations are only effective when they find that balance. Increasing capital will already undergo annual rigorous testing and are required to maintain are wholly unnecessary. This will make it less successful consumers and businesses well one of the great strengths of the u. S. Economy and Banking System. As it stands, the proposal will increase the cost on the economy not just to large and small corporations, but to pensions, municipalities, and endowments. We hope this will be open to the changes of reviewing the industrys comments. As the Global Leader in Financial Services, we have a responsibility to all of the communities that we operate. Many of those communities continue to experience social and financial challenges and we use our resources to help them. Finally, your letter dated november 6, you asked me to provide this information. Thank you to the members of the committee. We look forward to your questions. Thank you. We are happy to return shareholders for dividends and stock buybacks. We heard statements about how you will continue to manage businesses to deliver value to your shareholders. What we did not hear was any concern that your firms would not be able to make the anticipated increased capital levels. If i am mistaken, i would like you to set the record straight for the public and the investors. Do any of you have any reason to believe that your firm would not be able to achieve the increased Capital Requirements that was adopted as proposed . If you think you cannot achieve these raise your hand if you think you cannot. Thank you. I think you have indicated your firms will be able to meet the Capital Requirements. That leads me to conclude that this proposed capital standards are not too onerous. American support for unions, as we discussed is at a half century high. Unions ensure that workers sharing Company Success for better pay and benefits for greater stability to personal and professional lives. Workers at two wells fargo branches will be voting to unionize this month. Dozens of other Union Organizing drives are in the works. Wells fargoss recent scandals highlight the pressure that overworked and underpaid workers at branches face. They would not have to deal with the consequences of these decisions but we deal. I appreciate your willingness to talk oneonone about this with me. You remain concerned about unfair labor practices and reports that have geared up in response to the union campaign. You remain neutral for these employees. I agree about the workers and employees and as you know we have done a tremendous amount to support them and will continue to do that. Its best we have a direct relationship with those employees and we intend to exercise our right to speak with them and make sure they make a warmed decision. Thank you. It was an opportunity to show the American Public a new day at wells fargo. I am sorry that you failed to show that real change is afoot at your bank. According to cmpd, failure to invoke the servicemembers civil relief act Interest Rate reduction costs servicemembers 100 million between 2007 and 2018. You can unilaterally act to ensure servicemembers receive those benefits, the escrow benefits. Your bank proactively checks authorized military databases to identify accounts that maybe eligible for escrow protections. Chairman, we have huge respect for those that have been in the military. Specifically to your question i am not sure but we will check and get back to you. Thank you. We follow these provisions as retroactively looking back. About 180 a year we sent back to the servicemembers will so i will check to make sure we look at all available means. We have an opportunity to say our 18,000 veterans the last couple of years we support our military and military spouses and stand 100 behind them. We hold them in the highest regard. Thank you. Similarly we are very proud to employ many veterans and we are incredibly grateful for everything they do for our country. We make extensive investments and ensuring we comply with the laws and we do indeed tap into the database. Thank you. Thank you for your candor about that. I urge you to proactively check whether customers are eligible for these benefits. It is the type of work you could be doing. The answers were helpful and we will be back with all four of you about how we can do that for lack of lee. There is plenty we dont agree on i want to focus on where we do agree. Nearly 1 million americans living with disabilities. The problem is the ssi eligibility roles have not been up aided by congress. They lock people in poverty with bipartisan policies calling them asset limits to most regressive antisavings provision and federal law. I have a bipartisan bill to raise the asset limit and stop punishing people for working and saving. Mr. Diamond, i know j. P. Morgan chase is in support of raising the asset level. Tell us how this affects j. P. Morgan and why you are so supportive. I would like to ask all of you if you would join in the support. Thank you. We have employees that do not want us to increase their salary because of it goes over a certain amount they cannot get that benefit or they cant have assets over 10,000. Thank you. Do you agree to support this position . It sounds like something we would be willing to support. I would like to take a look at it. Fully and wholeheartedly. We do support it. We do support it. We do support it. Yes. Thank you all. Senator scott. Thank you, mr. Chairman. The chairman asked a question about can you increase the Capital Requirements . My question is can you and achieve the requirements without negative consequences to the economy and the lending. Senator, we do have concerns that some items in the proposal will lead us to either increase the price or to reduce the amount that we lend. There is a chart in the npr that looks exceedingly simple. It says here it is before the proposal and here it is after the proposal. A 24 increase. Thats a reduction of capacity in the industry to serve clients, no questions asked. This has to be used to sustain the same activities with no risk the day before and the day after of what the enterprise does. That is the point we are trying to make is that this is about using capital whether we have it or not and whether we can meet those requirements to support additional activity. One of the frustrations you hear from this group is this question should have been asked before it would happen. We have to hold 30 more capital than International Banks in the United States. A lot of loans have fallen or become unprofitable. A lot of the loans we talked about dont make sense for the company anymore. Small business, cfi, solar, wind, middlemarket loans, certain traits you do with Pension Plans et cetera. This work should have been done beforehand. By law this should have been done beforehand. We have 10 years to do this and it is shocking to me that after 10 years we are talking about what to do for Small Business and we have to analyze it today. We have hundreds of thousands of pages responding in and every detailed way to every one of these things but im not sure if it was shared fully among all the regulators. My assumption is that everybody is going to say with consequences that will be negative. Let me ask a different question to you ms. Frazier. The unintended impact on customers we so often talk about the American Consumer as if there is just one generic consumer. For a state like South Carolina with a lot of farmers, the impact on farmers and access to not only credit but liquidity during the hard times, give me a 30 seconds reaction to will this have a negative impact on these Rural Communities . Certainly. Thank you very much for your question, senator. To your point this will increase the cost of borrowing for farmers in Rural Communities. It could impact them in terms of mortgages, credit card, it could also important the impact the cost of any borrowing that they do. Let me give you an example. For a farmer, hedging Commodity Prices is an absolutely fundamental piece for providing stability and inability to sleep at night. Under this proposal, this is the cost of the derivatives that would increase client materially and have an impact on ability to do a fairly fundamental component of risk management. It could also impact the access to credit. Its the cost of borrowing, the access to credit and some of the fundamental tools they need to manage stability of income. You said something earlier that i thought was really important. As we discussed this proposal and its impact on lending on folks like me that come from poverty are looking for the ability to achieve the American Dream, some would say contrary to what im talking about, maybe there are other things that are missing in my thought process like will this make our Financial System safer . Have we not done enough work since the financial crisis in 2007 to 2009 to make sure that Financial Institutions are able to meet these obligations and responsibilities under even a worstcase scenario. Your opening comments reflected that yes we can make it through a more disastrous crisis. Can you walk us through how this would make it even harder for Small Business lenders and borrowers but not necessarily make the economy safer . Sure. Thank you for that question. I tried to highlight in my opening comments and mr. Gorman highlighted it quite clearly. The stress tests are very significant. They look at very severe shocks to the Balance Sheets. I highlighted a 50 decline in equity prices over one year on top of that is simultaneously equity equity market shock with as much as 30 of simultaneous equity decline. That puts buffers in place that protect the system. Now of course a sound and secure system is imperative for the Capital Markets. We could always have debates at the margin as to whether or not there are things that we can do to strengthen the system but a wholesale increase of 25 f largest banks with lots of individual positions that affect different activities, i think that is ultimately punitive to Economic Growth and does not strike the right cost benefit analysis. Of course we need to make the system secure. It is in good shape. That does not mean nothing can be done but this is a wholesale change that leads to problems. Ms. Frazier highlighted one example, talking about farmers. You can look at airlines, jet fuel, other derivatives getting passed on to consumers. These utilities obviously get passed on. You can look at other transactions like under sft which allows institutions like ours to borrow securities for Pension Plans and give them cash. That increases their returns and Capital Increase by eight times over those types of transactions which would make them unattractive and diminish the ability for pensions to access that. Thank you very much, mr. Chairman. Let me thank you for the support of our military men and women. Their spouses also thank you. With respect to the legislation some years ago about the military lending act i think the key aspect is the interest. I think it is such a critical part that it should not be just a province of military personnel, but for every american. I think essentially your banks collectively have made about 219 billion in profit this year. I believe it is not beyond 30 . That 6 Interest Rate seems to be very appropriate. So, mr. Scharff, would you support this . I think we would be concerned about setting a flat number without really understanding what the impact would be and different inflationary environments. Mr. Monahan. Senator, thats not really relevant to us. We dont engage in private lending. I think as mr. Scharff said its a question of balance what would push outside the system and make it not available. Its just not a relevant lesson for us. I guess in a general sense it is relevant because of the people who use this are payday lenders and rather dubious operators that will induce borrowers into arrangements which are something you cant even tolerate. I think after several years of questioning, im not picking on you, to come to a conclusion. We do not engage in that. I think there should be a focus on payday lenders and check cashers and certain things like that. I would look to have the resilience that comes with it with consequences. Some people make very small loans and if we stop them from doing that that would push people into payday lending. Senator, thank you for the question. We applaud the intent of what you are trying to do. As large banks we are very mindful of our responsibilities and protecting our customers from abuses. Experience has shown that caps diminish access to credit in the system and the Federal Reserve has studies to show that. I think similar to my colleagues would believe there are other ways to achieve the intent, but we would be supportive of following up. Mr. O hanley. Senator, we do not engage in Consumer Lending but we do support that. Thank you. Senator, we are also not in the consumer business but we support the intent. Thank you. We have very Small Business in the consumer area, but we support the intent. Inc. You. I support it, senator, for what i consider normal economic times. This country borrowed at 24 so not quite 36. I cannot particularly heinous but it turned out okay. I think anybody that is forced to borrow at 36 , it is unforgivable. I was borrowing at 24 . We repealed legislation because it was 21 . I hope to work with you on this because i think it is very important causing disruptions you might anticipate. The other thing, and i know many of you are doing it, is to allow people to use banks. One of the reasons they found themselves borrowing from unscrupulous characters is they do not understand that it is relatively easy and much more appropriate than some of these others. Thank you. We will continue to work and any advice i would appreciate it. Thank you. Mr. Routes from south dakota is recognized. Thank you. We do things occasionally on a bipartisan basis even in the baking committee but we also have an opportunity once a while to disagree and sometimes that means we can participate in the disagreement process. Today you will hear us talk a lot about consumers as they are the latest victim of heavy handed washington bureaucrats. In the last three months financial regulators have put forth our finalized regulation and guidance that represent the biggest banking regulations and the passage of we sing resolutions on bank capital, longterm debt, the Community Reinvestment act just to name a few. However, we know that none of these regulations exist in a vacuum. The vice chair said himself that this endgame proposal is and i quote, projected to raise capital for large banks. This may result in higher funding costs. This is only half the story. I want you to help tell the other half of the story. I was originally just going to ask this of one of you, but since the chairman has set the example of asking folks to raise their hands i will apologize in advance because i think folks hate to be put in that position. I think it is critical that you get to tell the other half of that story. None of you raised your hands when you said that it would be a case where you could not meet the Capital Requirements. The issue is what damage it does to the economy when you are expected to raise that and the folks that need that. Here is my question. I will ask you to raise your hands. If you agree with these assessments would you please raise your hands. Do you believe in its current form cut these regulations negatively impact firsttime homebuyers. Do you believe in its current form cut these regulations negatively impact those saving for retirement . Do you believe these regulations could negatively impact farmers and ranchers. Do you believe that these regulations could negatively impact Small Business owners. This is the rest of the story. Sometimes we think we are just beating up on the big banks. The bottom line is it hits the American Consumer were hurt. This is at a time where they try to go after the big guys it is the American Consumer that will suffer. You can already see the signs of consumers struggling as they utilize the buy now pay later approach to products making late payments on credit cards, this is because americans are paying more per month just to get by since President Biden took office. Bidenomics has led to a family four and south dakota needing to pay 900 a month more just to get by for living expenses. The regulation does not exist in a vacuum. The Federal Reserve must take this into account as they work toward finalizing rulemaking. I will not embarrass you by asking you to raise your hands anymore but it is important that americans see the rest of the story and she will really pay the bill for this overzealous approach without finding out the rest of the story about these types of regulations and who really gets stuck with it. In recent years the annual interest is slated to reach over one point 4 trillion 1. 4 trillion in the next decade outpacing all discretionary spending. Im concerned about what risk this poses to the economy. The treasury will conservatively need to issue 20 trillion of debt. I am not only concerned about who will purchase this massive issue but with the federal funds rate of 5 of federal government will be paying even more to borrow as treasuries with near zero rate mature. Mr. Solomon, how could sustained high levels of debt have adverse effects on the u. S. Treasury market. This is a significant issue that i tried to highlight on top of opening remarks. This growth has been growth over the past 15 years. It will continue to grow the cost of financing. With this cost to refinance the debt certain scenarios could be higher. This cost obviously hampers our ability to invest another things as a nation that we need. There is a lot of attention to focus on our economy and society and the cost of that debt to future generations based on decisions we have made which is something we would have to get focused on. This can certainly create volatility and funding can create volatility in the market. One thing i am also concerned about is one of the impacts to a business called prime. This enhances the Asset Management platforms that trade in the market and providing quiddity liquidity to the market. That would go up with this proposal and would potentially impact liquidity. That is another impact that we need to look at. Thank you, mr. Chairman. The senators recognized from montana. I want to thank the chairman and for your testimony and for being here today. I also want to echo the comments on your support for the military both activeduty and veterans. Them and their families. It is very important. I served as the chair of the defense appropriations committee. I spent a fair amount of time thinking about National Security and how to handle terrorist organizations and foreign adversaries. You have a responsibility to make sure that you are preventing hostile governments like it iran that would like to see the u. S. Not exist from financing terrorist operations and other illegal activities through your institution. This would be a question not for any particular reason but right in front of me. So your institutions do not end up financing. Senator, thank you for the . Obviously it is critical as a good player in this country. There are two things that i call the Cyber Security efforts coming into the Financial System. Spending about 50 million on that activity, we work very closely with all the intelligence agencies ensuring that we have a proper command to keep the Financial System safe. Secondly, specific individuals, bad actors and governments, this is to ensure they do not get in by verifying the source of where the funds come from. Obviously we deal with not as many client as some of the institutions here, but we still have individual clients and many tens of thousands of institutional client. Its an extraordinary effort with several hundred employees constantly working. Interestingly, i think the advances in ai will be a real strategic weapon. Anybody have anything different to add . Along those same lines with the Money Laundering protections and safeguards, we talked about Cyber Security. Mr. Solomon, would you like to add anything in regards to anti Money Laundering protections . I do not have anything to add that is materially different. With an enormous focus. This Financial Crime team working every day but no difference in the focus for the intensity of the focus. Earlier this year, mr. Scharff was paid nearly 100 million to the fed for violating sanctions against iran, syria, sudan. I think we can all agree it was not a good thing. What is your big doing to make sure these sanction violations never happen again. Sure. Preventing bad actors from using our services is a top priority. We have extensive systems we are constantly using to make sure they are as complete as they can possibly be. We worked with Industry Groups and the government and regulators to make sure that we are doing everything we possibly can to prevent that abuse. Talked about the fact, that this will force basel money to go outside the traditional Banking System. Ms. Frazier, take can you talk about what kind of impact that you see that having, i dont know if you can project the percentage of money that you will see going into the nonBanking System, it will be interesting. In 08 that was one of the problems. Yes, senator, we all worry about the migration of financial activities into the nonBanking Sector, particularly in a. Where there is demand is technological innovation. Making sure that we maintain the safeguards, we all invest millions of dollars a year be it antiMoney Laundering, be it cyber to texan, all of these areas protect the American Consumer and protect the saver, they safeguard the system and also the Critical Role that all of our banks play in the Financial System as a Strategic Asset of the u. S. We are very concerned that this will undermine some of the strengths and foundations of the unique american Financial System. Thank you all think you, mr. Chairman. Senator tillis from north carolina. Thank you thank you all for being here i am praise, i thought this is going to be the annual flogging and people are asking some serious questions and im glad to hear this. I have a few for you all. Number one, i want to start by saying thank goodness you are not the head of an organization that has had an expose on a culture of sexualharassment and workplace hostility. If you were every person up here would be asking for resignation, including me. We have a top financial regulator that will get it past. The same financial regulator has implemented a sec Cyber Reporting rule, now we have evidence that the ransom where companies are exploiting. This is a mandatory Cyber Reporting requirement that now a ransom where company has gone on record as reported. I do not want you all to respond to that , but we have detailed questions, we are going to ask the impact. A four the reporting requirement and a National Security waiver that you have to reapply for every 30 days and it has to be approved by the attorney general. These people are out of control and we have to try to repeal this. I am putting on my first one next week and hopefully the sec can see the bad guys are exploding a rule creating a burden. Thats all on that. I want to go back to the Operational Risk question. I think the senator did a good job of saying, this basel iii endgame is bad. It is not well thought out and hopefully it looks differently before its obligated. Who would like to speak for this group around the impact on Operational Risk one more time and how we think they missed it in terms of benefit . Mr. Gorman if you could do that in 30 seconds, i appreciate it. It makes money does not know cents. I served on the new york board for years, i have seen a lot of rules. This does not make sense. You should not punish institutions. Is there any evidence that work has been done to fully understand the fully burdened cost and the impact of this rule on the industry . More importantly people like my dad who would get 90 day notes to fund a construction job that always i used to work on. Is there any thing that shows that they are doing the downstream impact . Are you right of aware something ive not read . I am not. Thank you. I think you mentioned the Security Financial transaction. Can you talk about why people should be worried about promulgation of this rule in about 30 seconds . Sure. Security Financial Transactions are Financial Institutions like ours aro stock , security from pensions. We pay them cash. They can invest that cash and earn returns. The capital in basel iii goes up by eight times. We make the transactions uneconomical for businesses like us so we will exit that business and that will prevent the pensions from having that ability to increase the returns. Anyone sitting on top of Pension Management should understand if we implement this in its current form number there returns are likely to go down. The enduser would be impacted. Okay. Lets talk more about actually, i have to get something off my chest. I am kind of doing that, you may have noticed. I understand that you are a gaming see card. That you can game stress test and thats what im hearing from regulators, give me an idea about this. I thought this was a regimen provided by supervisor and examiner and you got executed and have to measure it. Is that how it works . Does anyone want to share with me . I used to work at price porterhouse, we did not have a, stress testing at the time. Have you all cracked that code . How many of you think its absurd that you can game a stress test . Okay. How many are ye you spending more time and money to require stress test requirements at the expense of looking at unique issues at your institutions. This test is 230 pages long and most of us do 10, 20, 30 pages a week. It is a big black box. We agree stress testing, that thing is out of control. And closing, Silicon Valley was a disaster. It was a fingerprint, it was unique in terms of their activities, it was a failure, in my opinion, one thing i hope we have over the next year is a hearing of everyone in the loop who failed to protect the investors and depositors in Silicon Valley. The senator from new jersey. For over a decade the cfp p has set up for Everyday Americans and fought back against abusive and unlawful practices, including some of the banks in this room. Mr. Diamond, how much money has j. P. Morgan chase returned to customers in the form of re addresses and payments . I do not know the number. 360 billion. Mr. Mona hansen question. I do not know the number. 819 million periods ms. Fraser. I do not know the number of handprints 1 billion announcer mr. Sharp i do not know the number announcer just over 2 billion. From just a four of you that is over 4 billion. Is amazing you do not know the number because it is not small in nature. Over 4 billion returned to hardworking consumers in the past dozen years. This Critical Agency is under constant attack by my republican colleagues, a lawsuit before the Supreme Court is threatening its existence and time and time again we see why it is so necessary and why i intend to continue to fight for it. Otherwise that is 4 billion out of the pockets of u. S. Consumers. While some banks have either decreased or eliminated Overdraft Fees altogether, a large part, due to increased scrutiny and oversight, still collected an estimated 7. 7 billion in 2022 in overdraft and Nonsufficient Fund Fees. Ms. Fraser your bank eliminated Overdraft Fees last year, isnt that correct . Yes, senator. Is is still to say you are a Profitable Bank . Yes, senator did Overdraft Fees up and your Business Model . No, senator. We work hard to protect our customers and make sure they do not fall into overdraft. The rest of the banks here who have Retail Operations continue to charge Overdraft Fees. Mr. Moynahan, mr. Sharp, mr. Diamond, you are all aware that black and hispanic households this proportionately occur Overdraft Fees, correct . Yes or no . Could you give me a verbal answer. I believe so. If that is your statistic, i do not have a reason to challenge it. Same for me. The reality is, it is amazing that you do not know that. Study after study have shown that the answer is yes to that question. I suggest you call ms. Fraser after this hearing and figure out how you can still be able to eliminate the fees and is entirety and still run a Profitable Bank. Charging the fees is a choice one that this proportionately harms black and brown communities and it is something that you can do that can change the course of events for a significant part of the consumer base. The lawsuit currently before the Supreme Court over the funding structure has the potential to up and every rule, guidance and order that they have issued tossing over a decade of Consumer Protection over the window. Thats not just harmful but it is dangerous to the Financial System. The sea of pp does not just issue regulations, they also provide safe harbor positions like the mortgage rule that protects lenders from certain lawsuits. Mr. Sharp, mr. Moynahan, mr. Diamond and ms. Fraser, if you were to lose this, would it impact your banks mortgage lending . I dont think it would make a difference. We did lend mortgage lending before this and we will do it after. It depends on the actual detail of the ruling. I would like to know the specifics to draw a conclusion. I am the same of my colleagues i need the specifics. I am saying if you lose it, if you lose it totally it seems to be pretty remarkable based on previous testimony of how important the safe harbor provisions would be to lending abilities that you would suggest that it would have no effect whatsoever. We are in the midst of an Affordable Housing crisis and eliminating the cfpb would have a disaster effect on the mortgage market. Finally, the number of physical branches in the u. S. Have been trending downward for some time. This has left more more residents in banking deserts, facing difficulties and carrying out basic tasks such as paying bills and depositing checks. A report found Bank Closures during the pandemic resulted in a number of banking deserts in the districts of pennsylvania and delaware rising. Part of this is global and online banking, but there are many who do not have the ability to do that. What are some ways that we can ensure communities continue to have access to basic Ranking Services . Two things. I think if you look at the people at big branch systems, we maintain approximately 30 of our branches that mr. Sharp said earlier in neighborhoods. We are up to 97 of customers use Digital Banking which is more convenient and more safe. We manage that carefully to make sure that we cover every market and make the calculation to see that in the statistics. If you look at what we do is a group of institutions, we maintain the presence and we have driven the types of accounts that are more appreciated. Thats why we bring 2 Million People into the Banking System. I will close by saying i commend all of you that you look at how you practices affect particularly minority communities, including on this issue. You have a disproportionate effect and there something you can do about the largest growing parts of the American Society that would be beneficial to you and to them. Thank you senator kennedy. Unlike some, i do not think you are crooks. In fact, you are all American Companies and i am proud of you. I thank you for supporting the most sophisticated and powerful economy in all of human history. And the jobs you create for americans in doing it. Mr. Diamond, since the last time the federal government raised bank Capital Requirements with doddfrank and otherwise, have you had a depositor run on your bank . We have not. Have you failed a stress test . We have never failed a stress test, no. Have you ever reached the point where your liabilities were greater then your assets . Absolutely not. Unfortunately, we have had three banks this year that went broke. You know them, signature Silicon Valley and First Republic. In my judgment they went broke because the management did really stupid stuff. Because the fdic, and the regulators who were in charge of keeping them from doing stupid stuff sat there like bumps on a log sucking on the teeth and watch them do stupid stuff. In many cases they had to turn to you to clean up the mess. In fairness to the fdic, it may have been that the people in charge of watching those banks at the fdic were too busy urinating off the top of a hotel. Or abusing young women who went to work for the fdic. The fdic chairman told us recently, yes, he knew about it, it happened, but he was not the chairman yet and did not have the authority to stop it. Mr. Diamond, dont you find it ironic, the fdic is turning to you and saying, you know our track record, which is blemished at the fdic. Your bank is not broken, but we are going to tell you how to fix it. Do you find that ironic . They will tell you how to fix it based on standards put together by bureaucrats in basel switzerland. Do you find it ironic . Isnt that kind of like a given a gun safety advice for alec baldwin . Should i answer the question . The major risk of those banks was hiding in plain sight it was known to most people who could read a Balance Sheet and read their financial statements. The fdic said they did not know they were busy doing whatever else they were doing at their carnal abuse. You did make a good point, some of these rules were put in place and some folks mentioned here, they are pushing business outside of the Banking System and to point out what that is, it is almost 80 more Business Today, it is half of the Business Today and a bunch of other things that people do not actually see about the system. I do think it is risk about transparency. Let me stop you because i will run out of time. How is this legal under West Virginia vepa . You have Bank Regulators without clear direction from congress who have standards from regulators in basel, switzerland they imposed their view without direction from congress it falls under the doctrine, why does this not violate West Virginia versus epa . You do not need a law birder book to see that. Why does this not violate the law . Anybody . Senator kennedy, your time has expired. Ms. Frazier was about to answer. I thought you gave her time. Proceed. I appreciate your points of view on this topic and i think any of us will concur. Violations of law, it is things that we will debate as a last resort, we will be prepared to do so because it is important that there is clarity in the law and we abide by it. Thank you. Senator warren. I find it is an interesting presentation, the yin and yang, whether it is the source of all challenges or the regulator. Somehow i do not believe either presentation represents the truth. My questions on basel iii have been raised , as i indicated. I think the timing at this moment is very problematic with Interest Rates as high as they are and members of the Civil Rights Community have raised this as well. Before anyone smiles too much, i also can tell you that i get frustrated that any time there is any proposed new regulation, or rule, the reaction is the sky is falling and the same response is you do this it will limit access to capital on main street and i think senator menendez is presentation in terms of dollars return was pretty good. I want to go to an issue that i have raised with many of you in the past, i do believe that before we add new regulatory tools about the safety and soundness of our system, one thing that we ought to use better is some of our existing tools. The very beginning when the fed was stood up, the most important tool was the discount window and use of that. And yet, we saw with the banks that failed this year, particularly in terms of seb and signature, they did not have procedures in place to know how to utilize that tool. I think i will start with mr. Moynahan on this one. I know that there was guidance given out this past july to say everyone ought to get their act together. I do not have a lot of sympathy because of the concern that many of you and other colleagues have raised, i go to the discount window that will raise a stigma with the market. You cannot complain about new regulations if you are not using existing tools. Beyond the guidance that was given, why shouldnt we have on some kind of random basis a mandatory use of the discount window so that we can start erasing that stigma and make sure every bank, large or small, know how to use it at least this would be the most powerful tool of all. Two things, one readiness to use it i think you would find the institutions here because of the amount of regulation we have are ready to use it but the second question is a statement, we could not agree more whether it is seven, eight number 2020 or last spring, every time a crisis hits one of the core roles and the reason why the Federal Reserve exists is to provide liquidity in times of stress every time we are 100 reluctant to use it as an industry because it looks like we are weak. That is again where you see folks on my side of the aisle complain that if youre not using the existing tools then look into new tools. I am going to put legislation forward that would require mandatory usage and how we do that on an episodic basis. Just saying, we know there is a stigma problem, but we do not have a plan to address it means somebody might be sympathetic we agree. Artificial intelligence has been touched. I personally am surprised that there was not greater concern about ai in terms of its ability to disrupt faith in the public markets. To me it feels like if there was ever a time in a tool that has such wide reaching implications that, which i know the record has been somewhat mixed, i strongly believe that they would take on the responsibility looking at Artificial Intelligence in terms of safety and soundness. We have talked about this, ms. Frazier what you think you are raising a very important issue that has all of our attention at the moment when we look at Artificial Intelligence it is an opportunity and a threat and we hope it will be an opportunity to improve the strength of the Financial System. The threats are also quite considerable. We have a regulation that is in place right now that works well to safeguard our Financial System. We think that should continue to be used. I know my time is up. I do think that it is a tool and i would make the case and others have made the case about underserved communities and some of you up to spitting in the Economic Opportunity coalition, it is still a tool. Those of you who are not participating this is bipartisan led by you have no time. Thank you, mr. Chairman. To all of you, i know how much you must look forward to these meetings that we have here. Today my colleagues have focused a great deal on the basel iii endgame. It is something i am concerned about. What we have here in washington, regretfully, our regulators are in a competition, bureaucrats in other jurisdictions. They seem to be regulating for regulation sake. I have a difficult time when massive bodies of regulation are put forward in bureaucrats here try to tell us the impact will be minimal. I would like to quote specifically from vice chair michael barr who is leading the efforts on the basel iii endgame. He says the impacts are to be minimal and specifically he says quote, the phase in will allow apple times four banks to adjust the Balance Sheets and build capital overtime. In fact, most banks already have enough capital today to meet the new requirements. The message that the public is getting is that these massive regulatory proposals that theyre putting forward with basel iii will have a minimal impact on your banks. I want to go back to the term everyone else is using, this anyone here believe that this will be minimal . Raise your hand. I would like the record to reflect that no one raised their hand. No one believes that this will be minimal. In fact, one of the most infuriating patterns of behavior that i see in the regulatory class in washington is the unwillingness or refusal to take into account the effects of regulations. Mr. Diamond, your bank stated that the basel endgame would increase by 50 billion. There are real costs associated with this proposal. I would like to get your perspective on how this proposal would impact not only your bank but the markets and the economy broadly. Inside a bank you try to look at every loan you make and every relationship and every client and country and you want to do a good job, in the long run. It would take a lot of loans i will give you an example, mortgages and i told our people that mortgages should not be on the Balance Sheet. We cannot do neither because we have not passed the law but it would diminish mortgages, particularly diminish mortgages for lower income people. The cost of this is much higher for a 150,000 mortgage than a 2 million mortgage. Cdf i, financial companies, farmers, we mentioned the extreme effect on Market Making which is a critical function to help finance companies around the world and help people manage money for retirees and veterans and state Pension Plans to manage their money. It is hard to figure out the full extent and i think it may cause issues. All of these are negative. Ms. Frazier not limiting your bank in particular, can you comment on how this impacts u. S. Banking system competitiveness on an international basis. This will diminish u. S. Banks , competitiveness on an international basis as we have reflected u. S. Financial system is the envy of the world. U. S. Banks play and a court Important Role supporting the western Financial System. It is a Strategic Asset of the u. S. Indeed i think it is an incredible competitive advantage. Regulators who focus on basel iii seem to be hiding behind a claim that this is harmonization of Capital Requirements. When you think of that elite you to believe that u. S. Banking capital is below that of our european competitors. If that were the case this might allow regulators to race to the spirit this is not the case this is a quote from chairman powell, the proposal exceeds what is required by the basel agreement and it exceeds what has been done. Mr. Solomon i would like to come to you great you represented in your testimony the disadvantage that this proposal would create for Financial Institutions for the economy more broadly. Which you mind on commenting how this proposal went and acted with compare us to other jurisdictions, how it would make our competitiveness and Capital Markets versus other nations. Thank you for that question. As you stated the Capital Requirements in the basel iii mobilization in uk and japan are less significant than what is being proposed here. If you look at activities competing around the world particularly in Market Banking and those types of activities u. S. Capital market is the strongest in the world it is one of our big competitive advantages that everyone comes from all over the world into our Capital Markets. You think about ipo activity and debt Capital Raising it is, in our Capital Markets on a regular basis spirit this would shift the balance it would push more activity into other jurisdictions. It would make banks more competitive and i do not think that strengthens the u. S. Position. And the u. S. Banking system less competitive prethank you. The senator from nevada is recognized. Thank you, mr. Chairman. Last time you were here we talked about Affordable Housing and i want to continue that. Not just in nevada but silly people across the country are struggling to afford homes. One way to do that is by investing in Affordable Housing through the Home Loan Bank system. As we know the federal home loan enjoy federal benefits that no other bank has access to, for supporting Affordable Housing and Community Development across the United States. Last month the federal Housing Finance agency published two reports exploring whether the federal home loan that hundreds of thousands of taxpayer dollars are being used for development and the answer was no. Federal Home Loan Banks provide 10 of income to Affordable Housing. I think thats too low. My question to all of you, do you think the federal Home Loan Banks should provide 20 or more of their net revenue for Affordable Housing or Economic Development . Really, does anyone not support greater Affordable Housing investments by the federal Home Loan Banks . Let me ask you this, for the record, no one has said they dont think there should be more investment. Is 20 should be fine. Does everyone agree with that . Does anyone not agree . Good. Good start. Im trying to do this so you dont have to raise your hands, i dont like that either. The federal Housing Finance agency is proposing to adjust dividends to advance rates to better reflect the banks of Affordable Housing and Community Development. This anyone not support having the federal Home Loan Banks dividends and advances tied to admission activities. Financial institutions . Is that a good start for us . Does anyone have any comments or concerns . It is a good start from what i am seeing . Great. Fh fa recommended 10 of all Institution Assets be held in housing assets. 96 of Credit Unions would meet the test, but not some of the biggest banks. Under the proposed new policy, with any of your institutions invest more in housing to retain access to federal Home Loan Bank funding . Questions, thoughts . Have you ever thought about it . Still need to think about it . I think, senator, the trick is, if some of these rules change we have to shrink our mortgage on Balance Sheets and that makes it less eligible and less able to live up to the principles you are doing which is how much housing we can help drive. A lot of us meet that test today because of our business constitution. The concern is changes in the rules might have a negative impact and what we are trying to achieve. Mortgage loans are tricky to hold if you make the more capitalintensive they will be less profitable if we hold less than 8 of the activity that goes on outside the Financial Institutions. These rules may frustrate your intentions of what youre trying to do. We applaud that we think more Affordable Housing but you might be frustrated that is the kind of thing we worry about. Thank you. I want to jump to one other item around Affordable Housing. Currently in southern nevada, in clark county, the most populated area in our state, they are looking at ways to build more Affordable Housing. One of those is really looking at land trust, federal land trust. The challenge theyre having is they are not able to get any banks to write the loans or mortgages for these land trusts. Heres what i know, this is what i want to talk to you about, for decades banks have invested in buildings that are required for affordable rent, in clark county not a single bank has been willing to meet to discuss providing mortgages for deed restricted standalone homes on federal land. The key is the federal land. I work hard to make sure more federal land is available for housing, it is frustrating to see that and banks refuse to offer mortgages to new homes on federal land. The clark county land trust has been looking for mortgages for 240 home since august, clark county has 3. 4 Million People, the county has a double a credit rating. My question is, what are we missing here from all of you that we need to be aware of why we cannot get a bank to work with us. I would love to get a team working the detail. I do not understand unless there are legal things about collateral or ownership. Thank you. My time is up. Senator your recognized. Thank you to the ceos for being here. I admire all of you. One of the things that i expressed in private and public is my concern that the american political system is infecting the Financial System and the Financial System is affecting the american political system. This is a graphic compiled by my staff which lists the ways in which your Financial Institutions have gotten involved in Major Political debates of the last few years. Things like the georgia voter identification law, things like whether to lend to fossil fuel based companies on the things like guns and abortion. I should say, we all have our opinions on matters of Public Policy, the difference between senator cortez and i and all of you is the people of our state selected us to do Public Policy. Nobody elected you. My counsel and line of question will be focused on this issue, stay at a Public Policy unless it affects your core business Interest Rate if you dont, it is a lot harder for us to see you guys as neutral arbiters and neutral actors in the american Financial System and it is much easier for us to see us as political actors. I want to focus on a couple of issues because they highlight the absurdity of this and that will lead me to my questions. Georgia in 2021 passed a moderate voter identification law, six of the eight of you immediately issued statements criticizing the state of georgia to that effect, or at least your institutions issued statements. I should point out, new york has a voter identification law, much more stringent voter identification law than the state of georgia, did any of you issue statements criticizing the state of new york for the voter identification law . Show of hands. Let the record show none of you criticize new york for a more stringent law, but she jumped in a culture war in georgia and i cannot understand why. Something more concerning because it affects my constituents in the state of ohio, your approach on Energy Policy. We have seen the last 18 months the consequences of reducing American Energy independence and how it empowers bad people over the world and it impoverishes some of my constituents and destroys their job. Im not picking on you, mr. Moynahan, you are the only bank that has a red x on every single issue. This is true for most of you, i want to ask about Energy Policy. In 2015 bank of america committed to cut of lending by 2025 two Companies Earning 25 or more of their revenue from thermal coal mining. That decision, and some of the decisions that have been made are raising the price of energy on ohio consumers and imperiling the job of those in the Energy Sector. Why you doing this . That the government make you wax if not why are you doing it . Just to be specific, that was a statement about mountaintop removal policy. I grew up in southern ohio and it was called stripmining. My nextdoor neighbor was engaged in the business and the statement we made is we will not continue to fun people who continue to take the tops off the Appalachian Mountains and turn them into mines. That was based on our assessment of the risk at the time. You guys have taken other Energy Policy decisions that raise the cost of energy on American Consumers. You have committed to a net zero standard which effectively there are no net zero Carbon Emissions and you have held your clients to that standard saying they need to be alarmed with net zero and we advise our clients in this transition. It is not just that particular decision. And it is not just bank of america. My point here is pretty straightforward and simple. Whether we achieve net zero and when we achieve net zero is a debate for the American People. What kind of photo identification law is a decision for the American People. Every time you guys get involved in this cultural war battles, it makes it harder for the American People to see you as neutral Financial Institutions and frankly it makes it harder for us to do the same. I will leave you with just this thought. You have heard some good line of questioning on basel iii, i agree with senator haggerty on basel iii, i dont know what they are talking about doing , it does not make sense. Often bank ceos and other Financial Institutions will come to republicans for more reasonable regulations, lower regulations and lower taxes to fight back against things like basel iii. My point is, if you are going to use the financial power that you have accumulated to go to war against the values of our voters, impoverish our constituents who rely on cheap energy and destroy the jobs of people who work in the Energy Sector there, why should we listen to you when you come and ask us for a tax break or for reasonable regulations . I am one republican who wants to have a Good Relationship with you the more you guys insert in these fights the less good that relationship will be. Thank you senator. The senator from maryland is recognized. Thank you mr. Chairman. I think all of you for being here. I am a big fan of cdf eyes and mdis as vehicles in gaining capital into lower income areas and Small Businesses in places like baltimore. Baltimore needs that ecosystem of cdfis. As Interest Rate goes up the cost of borrowing goes up for everybody but it is often these entities that are hardest hit. I know all of you are involved in one way or another with cdfis and , mr. Moynahan your bank has a significant presence of baltimore. Can you speak briefly to what your commitment is Going Forward and whether the higher Interest Rate environment is negatively impacting your determination to provide support for cdfis and mdis. Our commitment to working with this goes through all the cycles breathe it will not be impacted by the rate environment that we see. We share your perspective that the cdfis perform a service and reach a series of individuals in these markets that banks would not normally be able to access. Whether it is the investments that we make directly in them, we have talked about what we have done with our ppp money, a lot of it was given through cdf eyes because they have the ability to access customers who are not countable doing business with banks. Those partnerships and commitments will continue. We have 2 billion invested in cdfis. It is very interesting and the way it can help us including a lot of us participate in the Veterans Home front where cdfis work with businesses. Many of us participate in this and we think they can reach parts of the economy with canceling and other things that are critical. Not that we do not do a good job we have 40 billion in Small Business loans outstanding and it grew 10 yearoveryear. It is just that they our commitment has been there for many years, since they started, we just do not agree with the history. I appreciate that. I have worked with the chairman and senator warner and others and i chair the committee that runs Small Business administration and the treasury when it comes to cdfis, i look forward to pushing hard on this as a vehicle Going Forward. We have had many conversations over the years about late fees, obviously late fees and Overdraft Fees have a disproportionate impact on People Living paycheck to paycheck, aaron klein over at brookings estimated if the United States adopted a real time Payment System in 2007 when the bank of england did, American Consumers, and especially the folks at the lower income and would have saved 100 billion. I have been very focused on pushing the fed to adopt this fed now program. We have the clearinghouse system out there as well. I want to get a brief sense of where we are. I understand mr. Vince, mr. Sharp and mr. Diamond, your institutions have enrolled in fed now, and my right . In the qualifications . That is right. Okay. I know ms. Fraser you and i had a conversation about this and i understand youre working through technical issues, correct . Yes. We will be joining the system. Mr. Moynahan if you can give us an update on where you are. Bank of america, sorry. American express is not here. We are in the process of doing Technical Work as jane said. It is just a matter of when not if. The more that you can do to push and get this system, the better. My last question, does not relate to banking specifically but it does to an issue that the chairman and i have worked on for years with respect to trying to close a tax loophole, i know youre not all directly involved, but you all are involved in the finance system and you understand the workings of this. Mr. Diamond, do you agree we should close the carried interest loophole once and for all . Yes. I always have i have been public about it. I appreciate that. I hope that we can do that and it is just egregious that it has gone on for so long. Thank you senator. The senator from alabama is recognized. Thank you mr. Chairman. It is a pleasure to be with you. Thank you for carving out time for this. Over the last year we have seen a host of incredibly complex and market altering rules come out of nearly every financial, federal agency. Interestingly five of the top five financial regulators set before this Committee Last month and unanimously told me they believe the u. S. Banking system to be strong. At the same time they argue for proposals that could fundamentally weaken it without providing an answer to the question, why. You have seen actions, and we have seen them here from the Federal Reserve, the fdic, ocd, the sec, many of which seem to go far beyond the bounds of their authority. Equally concerning is the apparent lack of initiative by these regulators to understand both the qualitative and cumulative impacts of all of these rulemakings. For example, focusing on basel iii proposal. In this committee a few weeks ago vice chair barr said it will have a minimal impact on lending that banks do. I would like to say, mr. Sharp, most said you have the most rule ranches of all the banks are presented here. My question is, can you briefly respond to that . With this proposal only have a minimal impact on wells fargos lending . We will be commenting on the Federal Reserve. When you look at the increases in capital that are proposed it will affect the availability of credit and price of credit in the marketplace. Additionally, as we have seen in other asset classes, when regulation like when this has taken hold you can see substantial migration outside the Banking System. Thank you. At the end of the day it does play a vital role in the u. S. Economy and i do not want to diminish that. I do want to focus on downstream. Smaller institutions to and businesses across the country, the manufacturing Energy Sectors, individuals seeking a shortterm liquidity to help pay their bills. I think a list of these impacted goes on and on. On this point, your banks have said by raising Capital Requirements by 20 the proposal would limit access to capital across the board and undermine Economic Growth. Mr. Moynahan can you explain this triple down affect if your banks are squeezed by the requirements of this, what does it mean for Small Business owners seeking a loan, first time homebuyer or a small Financial Institution in lets say alabama. Thank you, senator. As mr. Sharp said and we talked about a lot today if you increase, if you have the same Capital Requirements increased 20 to do the same activities you have to get a higher return. That will be born by the Customer Base and none of those is good for the Customer Base and that applies throughout the board. The idea of this does not trickle down through the Banking System. We provide service to the banks and the Customer Service will go up. It has much more of an impact than people think. I know im running out of time and i would love an answer from all of you. Would it be an inaccurate statement for regulators to assume that under this threshold , those under the 100 billion dollar asset mark, they have said they will not feel the impacts of this . My question for you is, will those institutions and people that i just mentioned under the 100 billion mark that our quote not affected, will they feel the impacts of basel iii . Yes or no down the line. Ultimately, yes absolutely. We provide a lot of services. Yes, the trickledown effect israel. Yes. Is an integrated system. Yes, senator, it is likely. Yes, i agree. Yes. Last but not least, if this rule is implement it as written, do we risk putting the United States Banking Sector at a Global Competitive disadvantage . Ms. Fraser . We already have a unlevel Playing Field with the european banks. The american banks play an Important Role globally in the Financial System and they affect the competitiveness of the American Companies. Senator warren from massachusetts is recognized. Thank you. I want to talk about how criminals are using the Financial System to move money to finance terrorists, drug traffickers and sanction countries like russia, iran and north korea. Our witnesses are the ceos of the largest banks in the United States and they do with this issue every single day. Mr. Moynahan, you are the ceo of bank of america. Let me ask you. If a terrorist group that wants to attack the United States tried to move money through bank of america accounts, do you have systems in place to identify that activity . To report it to Law Enforcement and to shut it down . Yes, we do. Mr. Diamond. You are the ceo of j. P. Morgan, if a terrorist group try to move money through j. P. Morgan accounts you have systems in place to catch it, report it and shut it down . We have extensive systems in place, but no system is foolproof. You do have systems in place. Let me just ask all of you in the interest of time, race or high and if you have programs in place. Good i see all the hands up. I believe none of you want your banks used to finance terrorist attacks. Lets be clear, none of you runs antiMoney Laundering programs out of the goodness of your hearts. In i270 Congress Passed the Bank Secrecy Act to make sure banks do not run a Financial System open to terrorist and drug traffickers and rogue nations. Time past and the crooks got more sophisticated. After the 9 11 terrorist attacks , Law Enforcement discovered the way terrorist had gotten around the Bank Secrecy Act and congress was then called on to update the laws to cut off future access, that is what congress did. Todays terrorist, have a new way to get around the Bank Secrecy Act, crypto currency. Last year an estimated 20 billion in illicit crypto transactions funded every kind of dangerous criminal. North korea has funded at least half its missile program, including nuclear weapons, using the proceeds of crypto crime. Israeli officials have confirmed that hamas received millions of dollars through crypto transactions including quote, large sums of from iran. Mr. Diamond, you have been ceo at j. P. Morgan for almost 2 decades. Can you explain why crypto is such an attractive financial tool for terrorists, drug traffickers and rogue nations . I have been opposed to crypto. A true use case as criminals, drug traffickers tax avoidance and a use case for it is somewhat anonymous not fully because you can move money instantaneously because it does not go through, all of these systems have been built up over the years, it did not get bypassed. If i was the government close it down last week federal Law Enforcement asked congress to update the banking laws saying quote, we cannot rely on statutory definitions through decades old to address the illicit finance risks that we face in 2023. These Law Enforcement officials specifically called out the use of crypto to finance terrorist attacks. The laws clearly need to be updated but crypto lobbyists are working overtime to block legislation. They claim crypto is special and it should not have to comply with the Bank Secrecy Act even if that means letting terrorists and drug traffickers and ransom where criminals and rogue nations move billions of dollars totally unrestricted do you think Crypto Companies facilitate transactions should have to follow the same anti Money Laundering rules that your bank has to follow . Absolutely. Lets go on down the line. Mr. Moynihan per absolutely. Absolutely. Certainly periods absolutely. Absolutely periods absolutely. Absolutely. Absolutely. The word of the day. We have a way to do this, senator marshall and i along with 18 of our Senate Colleagues including senator cortez masters, senator smith, senator warnock, senator butler , they have a bill that would do exactly what lawenforcement asks. It would extend the anti Money Laundering rules that banks follow so that crypto could not be used for financing terrorist attacks or north Koreas Nuclear program. When it comes to banking policy, i am not usually Holding Hands with the ceos of multibillion dollar banks, this is a matter of National Security. Terrorists, drug traffickers and rogue nations should be barred from using crypto further dangerous activities and it is time for congress to act. Senator daines from montana. Chairman, thank you. Thank you to all of you for being here. Earlier this year we saw a series of Bank Failures, some of the largest in our nations history. These failures were due to gross mismanagement by Bank Executives and regulators who were asleep at the wheel. Instead of holding accountable, those in the supervisory positions responsible for missing the impending crisis, regulators decided to put forth a host of regulations that would have done nothing to prevent the failure in the first place. Any regulator i questioned this year in hearings like this has confirmed what we all know to be true, that is the u. S. Bank system is strong and more capitalized. The proposals put forth by vice chair barr and regulators will limit Economic Growth, reduce lending to Small Businesses and for those able to obtain financing, they will see increased cost. Businesses, i hear from them firsthand about the critical need for access to capital, the concern they have with pending regulations that could threaten their businesses. I question vice chair bart before this a very committee about risks, waiting, and requirements in the basel iii end game proposal. Astonishingly, he claimed that Small Businesses would be better off under the proposed scheme than they are now, despite the fact that less than 1 10 of 1 of businesses are publicly listed and would qualify for the lower risk waiting. Can you speak to how the basel iii end game proposal would speak to your ability to land critical fund to Small Businesses and what trickle down effects we might expect if this were to be implement it . Thank you for the question, senator. First off, these questions should have been answered way before, because it is very complex, the work should have been done, the details should have been shared with. We would have to charge more, and a lot of unintended consequences. We have to charge more locally just to make sure we get our return as close to capital. Secondarily, the Operational Risk capital will increase the cost of a Small Business Checking Account or making a loan. All of these things are cumulative effect. It will also affect our local community banks, your local Affordable Housing, or the montana pension plan. So, all these things will trickle through, all of them will become more expensive, and there will be some other unintended consequences. How we deal with customers i think some people may drop a few customers. It also leads to more concentration, because you have to get more revenues from clients to justify the loan. Thank you, mr. Scharf, do you have any comments . I agree with what mr. Dimon said. I want to shift into the issue of oil and Gas Investment in this last year and a half with russias invasion of ukraine, i have had the opportunity to travel extensively throughout europe for an event with leaders of other countries that border ukraine on the westside, also in the politics, as well as Ukraine Border countries. One thing i have heard that is really universal is they have let the winds of the day dictate their Energy Policy, and moved to quickly away from reliable baseload forms of energy like natural gas, coal, hydropower, and nuclear. I was struck, they took me out to their facility. By the way, when these floating ships, which are parked there, it is fittingly called the independence print as this lng really has been key coming off from the United States to get europe back on its feet to a certain extent. But i asked these folks who own the lng plants, what did you do before you were in lng . I had a background in chemistry and im always curious about process. They said we used to run a Nuclear Plant in lithuania. What do you mean you used to run it . We used to supply 70 of lithuanias electricity for an energy plant print button 2009, it was shut down. So, why was it shut down . As a condition of joining the eu, they made them shut it down, and lithuania went from being a Net Energy Exporter to energy importer. This is just a warning thing for all of us to take into account, the winds of the moment. Some particular sect of the green movement. It was an old russian design chernobyl type reactor that needed to be shut down. And they are paying a severe price for it. The need for fossil fuels is not going to dissipate in the nearterm. I am very concerned the Biden Administration has an all out assault on the oil and gas industry in the United States to further their green fantasy and hallucination. We can do this the safest and most environmentally sound way to have a balanced energy portfolio, that is to include the renewables and the exciting future we have in transition, but we better make sure we think about expanding our portfolio when the world is going to need 50 more energy than it does today in the next 25 years. Mr. Dimon very briefly, 30 seconds, if you can print can you discuss the importance of Capital Requirements, lending, and so forth in the oil and gas industry . Secure, safe, Affordable Oil and gas to do that. Doing a great job reducing co2. If you dont have affordable, cheaper energy, the cost on poor people, poor nations will be dramatic. We can get it done right as long as you are very thoughtful about it. Senator smith is recognized from minnesota. Thank you, mr. Chair and all of you, glad to have you all with us. I would like to start with you, mr. Scharf. So, i want to talk to you about the Community Reinvestment act. I think that this is a really important tool for making sure that people and businesses in low and moderate income communities have access to capital and lending and Financial Services. I for one am encouraged by the new cra rulemaking, which i think is an important update, and i think it makes some thoughtful changes to realign the cra and to give banks and Financial Institutions clear direction on what activities qualified for cra credit. So, mr. Scharf, could you tell me how u. S. S. This final rulemaking for the cra and do you think these changes will better enable banks to meet their cra obligations . Senator, i very much agree with your sentiment of cra. And the need to make changes in existing cra legislation, to ensure the ultimate goals are actually achieved through the actual legislation. I think when you look at the changes that have been made, there are certainly many items that are taken into account, which are directionally supportive of what i just said. We have given some comments to regulators about some of the specifics that we would like them to just reconsider as they work towards that goal. But directionally rethinking cra and doing it in a way that all the regulators come together is extremely helpful. Thank you, i agree with that, i think having everybody be on the same page was an extremely important part of this as well. Another thing that i think is true is that these updates to this dra were decades overdue, so do you think it would be helpful for regulators to update these roles more regularly, to have a more rapid cycle . I am not talking about changing rules all the time, but i am saying learning from our to make sure they are learning well . Senator, it absolutely makes sense to relook at these things and make sure they are having the intended consequences. All of those changes then filter through a lot of work we have to do. Strike and that right now is also, i think, very important. Great, thank you. Mr. Solomon, good afternoon, good to see you. Many of us are giving thought to how ai, Artificial Intelligence, is being deployed, and how we should be setting guardrails for its use, and understanding that ai has been in use for many years. I think it is true that generative ai has gotten a lot of attention over this last year, both for its capacity and also for the limitations that have been in full view. Earlier this year, the chatbot urged a New York Times reporter to leave his wife, and just last week, it was reported the amazon chatbot experienced severe hallucinations and delete confidential data. So, my question for you as the leader of Goldman Sachs is how do you see using this . I know that you probably have been using ai tools for quite a long time, but could you talk a little bit about how the generative ai projects that you are working on, how you see the is being deployed internally and how you are thinking about the appropriate guardrails . Thank you for the question, senator. Obviously it is something we are very focused on. And as you highlight, there are super offensive productivity things that can be done with the technology. As you point out, we have been using Artificial Intelligence in our business for quite some time. These Large Language Models accelerate our ability to use very, very highly paid people more effectively with clients. [ indescernible ] is sorted and organized more quickly, those are the positives. The negative, the technology can obviously be used to disrupt activities, disrupt markets. Thinking about cyber protection, guardrails, we have an enormous amount of focus in thinking through how these tools could be used to attack our system, our platforms, et cetera. I think it is the acceleration of this technology, it is going to continue, the pace is quite robust, and i think there are opportunities, but we also certainly have to be vigilant to recognize there are things that are going to develop and we have the right protections in place. And mr. Fraser, i have a couple minutes left. Tell me how you think about this. About four years ago, we put some principles in place about how to use ai and topics such as transparency and how it is used, making sure you can understand entries the different algorithms that are in place and things like that, making sure that there are human beings governing this. And make sure the protections are there, so we get the opportunity from it and also use it to defend against threats. Thank you. Senator fetterman from pennsylvania is recognized. Thank you, mr. Chairman, thank you. So, mr. Moynihan , back in 2008, the bank of america, your bank, didnt have enough capital for bad Investment Decisions as you made, and you had to be bailed out and then in 2023 of this year, the Silicon Valley bank didnt maintain enough capital and had to cost over 20 billion from the fdic. So, let me ask you, should we believe you that you have a bet man, weve got this, kind of an issue or should we be able to have an intervention to adjust this . Well, senator, i think since the financial crisis, this body, along with congress and the president , passed an act, and it changed capital rules. There is a an adoption of standards, on top of that, [ indescernible ] even the last five years, we have probably had 10 to 15 more capital required for those tests. So, i think there has been a significant amount of regime change made. The question is the institutions that failed earlier this year, none of them are [ indescernible ] our view as a group, we had to go and do two things, keep them alive long enough for a result, and secondly this week, a similar check of 2. 1 billion to the fdic to pay for the cost of the cleanup, and our Company Along with all of us, our view is that these capitals arent really going to address that. And there have been many capitals applied to these institutions and banks which do apply to that, and that is why you saw a source of strength earlier this year. Yeah, well, if you felt that we all supported those kind of changes after the crash, and then how can we have what happened at the Silicon Valley bank, now some 15 years later, if there wasnt the kind of intervention, there would have been another kind of a crash. So, have we got it right yet . Should we have to make any more changes . Are you okay with this idea that a relatively small bank, especially compared to the size of all of you in front of us tonight, could cause a crash, systemwide, unless the president had to quickly interviewed and make sure that we addressed this . Any changes . Anything else . Is it okay to worry that a small bank could imperil an entire Financial System . I think 4000 banks have failed over the course of time, thats what the fdic was created to help, and they have been resolved about have any of them almost crashed their entire economy . 07, 08, the system was outside, so many of the people [ indescernible ] that was the invention of the broader purview of the banking regulatory nets. The invention, we talked about, the invention of stress testing, the invention of all these things, and rules to measure, to move to an advanced methodology using models and other things that measure risks, as opposed to standardized methodology which is what we are going back to now. All of that change the system. Silicon valley didnt threaten the u. S. Economy, it could have been resolved and it was resolved. Why did the president act so swiftly if there wasnt such a concern . That is amazing that you can get on the phone and asked so quickly for that kind of money if there really wasnt such a significant risk. I mean, i wasnt read about the other 4000 banks that crashed, required the president to react in such a swift manner. You would have to ask the people. We thought all of that could be resolved differently. Many of us got involved with the First Republic transaction. You are going to have to ask the other people why they did what they did, but it is not us. But again, so, no changes are necessary despite now that we seem to have this entering that kind of a risk that bad behavior or bad investments could actually crash our whole Financial Systems . There were specific things that happen in Silicon Valley banks that should have regulations and the most important was excessive Interest Rate risk. I think the American Public should know that banks pay for the fdic. It is not government money, that is a mutual company, and i would love to take it over and take it off your hands and manage it ourselves but with all due respect, i dont think it really matters who is paying for it, but the fact that anyone has to pay because of these traces actually, mr. Dimon was next. Quickly. Outstanding. Mr. Dimon, you claim that the Capital Requirement that will increase costs and reduce lending. Chase done 5. 7 billion in shared buybacks and 9 billion in dividends so far this year. So, wouldnt it be easier to just kind of hold onto a lot of that money and lend it out . Or why would you want to give it away to the shareholders . Buying back their own stock. It is the shareholders money, and we do all the proper landing we can and should do. It will reduce the probability to bank of doing business, i dont think we should be asking people to do stuff that is on probable for their shareholders. Im happy to talk about that in more detail. My committee will take under advisement mr. Dimons proposal to take over the fdic. Yeah, i wish there was more time, i would love to explain why a democrat should support nikki haley for president. Thank you, mr. Fetterman. While i like your ideas on ssi, mr. Dimon, i need to think more about fdic. Senator warnock is recognized. Thank you so very much, mr. Chair. Before i get to the question that i set out to ask, i have to respond to the senator from ohio, who apparently takes great own bridge to the words are the letters sent by the lease of these institutions, responding to the Voter Suppression bill that was passed in georgia. I know a Little Something about Voter Suppression in georgia. Today is in fact the one Year Anniversary of my election in georgia. My election should not give people the false impression that there is no Voter Suppression in georgia. It should not you have a misunderstanding about how bad our law actually is. In fact, i had to sue the state of georgia. Because at the beginning of my runoff a year ago, they decided that folks wouldnt be able to vote. The first saturday of the runoff. Claiming that this was a clear letter of the law, you couldnt vote a couple days after a holiday, that holiday being thanksgiving, and a day that used to honor the anniversary of confederate general robert e lee. So, i had to sue them, then appeal again and again, just so georgia voters could vote. So, i think people in your position do have a corporate responsibility, and i hope you will certainly feel the freedom to lean in in the places and the spaces where it is necessary, and that the end, i want to ask you about the safer banking act. Legislation recently considered by this committee on cannabis spanking. Many of your banks have lobbied for this bill. And the american bankers association, of which you all our members, supports the bill as well. Can i ask you to raise your hand if you support if you support the safer banking act . None of you support the safer banking act . I am going to ask you a question, raise your hand if you support the safer banking act. Senator, we all support the intent of it, the problem is it doesnt fix the problem. Let me ask my next question. Raise your hand if you believe passing the safer banking act will reduce will reduce the racial wealth gap . So, this is interesting, so we should have some conversation about this. The american bankers association, which all of you are a part, right, this legislation will provide legal and regulatory clarity for banks, and help facilitate access to Financial Services. My question is legal and regulatory clarity for home and who are we making safer . Over 50 years ago, communities across america have been decimated, they have been hollowed out. Communities all across our country in the week of the explosion of mass incarceration. Making us the mass incarceration capitol of the world. Missing bodies and abandoned buildings. The war on drugs has been a war on communities of color. I want to be clear that i am open to safer banking and more regulatory clarity around cannabis, but my fear is that if we pass this bill right now, then your banks and other powerful voices will be missing in action when it comes time to address the broader horns of the war on drugs. And so, i support safer banking, you all seem reluctant to say whether you support it or not. I am concerned about equity. And whether we will get that in the process. So, let me ask you this, will each of you commit to ensuring your banks will uphold the standards that would standards and the Community Investment act, that is, which we will soon have another opportunity to address, will you support standards to increase equity as we move forward, perhaps on safer banking . Mr. Scharf . Yes, senator. Mr. Moynihan . Yes, sir. We support the intent, but i would have to see the actual words, the actual law. What you support efforts to be intentional about supporting equity and addressing the awful impacts of 40 years of the war on drugs, which has been a war on black and Brown Community is . Yes, but for me to agree to something, i like to see the actual detail down to the last word. I absolutely support the intent of the details, we look at it. [ indescernible ] we support the intent. Similar to my colleagues, we would want to see the detail. Mr. Solomon . I would want to understand the detail more, we will continue to do things to support investment in underserved communities. Thank you so very much. I think this is critical. There is nothing in history that suggests to me that if we leave behind these communities that are marginalized, as we make banking safer, for powerful banks and people in positions who sit here, was sent there, there is nothing in history that suggests to me that we are going to go back and get those folks, so i hope i can continue to engage you as good, corporate, responsible citizens, he will take an active interest in this, recognizing that it is not only the right thing to do for the future of our economy, it is the smart thing to do. Thank you so much. Thank you for setting the record straight on the Georgia Election law. Thank you, mr. Chairman. Welcome. There has been a lot of talk today about basel iii. We know what it means for your banks. I would like to explore for a little bit what it means for Small Community banks. Wyoming and other rural states rely on Small Community banks, and while the Capital Requirements apply to the systemically important banks, i would like to know if there are additional impacts on Smaller Community banks and their customers. So, i will address the question to mr. Dimon, and then ask anybody else who wants to take a swing at this to weigh in as well. Thank you, senator. I think the Smaller Community banks are not directly affected by this, but since a lot of those banks, we banked their retirement funds, we think the city is, we bank other Small Businesses, we bank local schools, cities, states, hospitals, it will trickle down to higher costs to them in one way or the other. It also changes the competitive landscape. It makes it harder to compete with us as opposed to less hard. Would anyone else like to take a swing at that one . Thank you. Americans interact with Financial Institutions through their banks and they save for kids College Education with mutual funds and protect their families with insurance. Can you explain why ultimately these changes will impact families planning for the future . So, my question is what are the impacts of basel iii on pensions, mutual funds, insurance companies, and other users of derivatives who heads . Now, hedging in my industry, agriculture, is very important. So, i am interested in the implications for hedging and the other entity as i mentioned. Perhaps ms. Fraser, would you address this . Yes. Hedging plays a very Important Role for protecting against risk and helping mitigate risk. [ indescernible ] it is important for providing stability and income flows and commodity hedging is a critical piece for any farmer in america. So, the increase in capital associated with the basel iii role will have an impact on the cost of that hedging, and potentially even provision of that hedging, and as you say, it permeates many different parts of our economy and society, it is not just for the most sophisticated players. I want anyone who is interested in responding to this question to take it. One of the things that my staff observed is that one of the most poorly thought out parts of basel iii is how public listings are used as a proxy for counterparty risk and derivatives. Counterparty credit risks in derivatives. So, it looks like this would harm at a minimum nearly 70 million households who invest in mutual funds. I would like to know if you agree with my staff concern and how we might address that . This is for anyone who wishes to take it. Yes, sir . It is a very crude measure of risk and doesnt reflect the fact that some of the largest and most sophisticated companies in america are public. So, it is just putting in one basket, saying that by definition, if you are not public and if you look at the trends, in fact, fewer and fewer companies are public these days, that is a whole different kind of debate we could get into some other time, but it is an terribly crude measure. Do you know why they chose to make public versus private company is different and treat them different in terms of using them as a proxy for counterparty credit risk in derivatives . Anyone . Well, we dont know either, so we are all in the dark. Okay, question, why and this again is for anyone who wishes to weigh in. Why is it so important that the United States have a Regulatory Framework that allows our Financial Institutions to compete on the global stage . As we see the rise of china asserting the influence all over the world, help me understand why we have to stay competitive. I speak as an immigrant to the states. America plays a Critical Role around the world in terms of supporting supply chains, it provides stability, populations all over the world, the investment funds, we account for over 50 of all of those capital activity and investment activity in the world, that is a Strategic Asset for america, it is something we should be incredibly proud of, and it is something we need to defend. Anyone else . Anybody else want to answer . I think when you are next to last, people are kind of tired. Thank you very much for your patience. Senator butler, the newest member of this committee and sorry you have to sit there. And number 100. When you are number 100, you stand between the panelists and lunch. So, i appreciate very much the time you all put into talking to with me, knowing i was going to be the last person asking questions. Because most of you have a significant footprint in the state of california, i am on behalf of the 40 million california residents, sitting here the entire time, and representing their interests across this industry. I am glad our Ranking Member made his way back as the newest member of the senate, i am still getting to know my colleagues. I want the Ranking Members to know i do agree with him on a key point he made and his opening remarks, and that is a majority of American People who are watching this broadcast, particularly who are still watching, are not talking about nor have any interest in basel iii end game. They are talking about fairness and fees and affordability. And so, that is where i want to land my two questions. I want to it is honestly not to pick on anyone, but really in the space and intention of moving things along. I want to pick up on senator smiths point around algorithms and algorithmic deployment. Ms. Fraser, you and i spoke about this, as it relates to Customer Account closures. We talked specifically about the november fifth New York Times article in which the city was specifically mentioned, a customer of yours who owns a bar. And who was making bar like deposits, end of day cash deposits in round amounts, so they could actually keep petty cash on hand to be able to make change at the bar. And found themselves the victim of an account closure due to what the algorithm determined was suspicious activity. Can you talk more about the process that you have deployed across the city to give customers confidence that when you are doing your Due Diligence as a significant Global Investment institution, when you are doing your Due Diligence to provide and enhance National Security, how do those American People who are still watching, who are still listening, you will hear this back, how can they have confidence that their credit isnt going to be negatively impacted, that you are going to return whatever their remaining balance that they might have on time, in a way that they can actually get their bills paid, due to no wrongdoing of their own . Thank you very much for the question, thank you also for sitting through the entirety of the hearing today. You raised really important points, all of us want to protect our customers, there is a tremendous amount of fraud, cyber probably keeps us awake at night, we want to do a good job for our customers, we want to look after them and enable them to make their lives and their financial lads secure. We have Money Laundering requirements that are very significant, in which we are not allowed to go and tell the customer why it is we have closed their account. And i think all of us appreciate how frustrating that is for our customers, but we must follow the law. You and i have also talked about when it is found out that a customers account is being closed in error or for some other reason, how do we then help them recover their funds quickly . Again, i think there is no bank ceo on this table that does not want to help a customer to do that. We are very happy to follow up with you on the different ways that can be achieved. Thank you. Thank you, thank you for extending that opportunity to continue to figure out ways that this body can act to protect not only california customers, but people who are banking with her institutions around the country. My last question, mr. Dimon, you and i also talked about this, as the representative from california, it is critical that i represent those voices on affordability and home affordability. In particular, your institution has done an incredible amount on this issue, and i want to applaud and recognize you for that. The other on the other hand, the other issue that i raise with you is a concern, of this intersection of both a declaration and a support for investing in Affordable Housing and making mortgages more affordable for low and middle income families, and the practice of Financial Institutions and buying Real Estate Development purely for the purposes of putting it up for rents. Those two things seem to be an opposite and in contrast to me, and there was a report of jp specifically on california about this behavior, and i would love to give you the opportunity to talk to californians about how you are meeting both of those obligations, the obligation to provide more Affordable Housing, help to create more access to the American Dream, and at the same time, buying more and more singlefamily residential properties, where they are going to be only available for renting. Be brief. Thank you for the question, senator. [ indescernible ] much lower costs. I have been dying to work on that for 10 years now. [ indescernible ] building homes. I think it is 200 homes for rental. Remember, rental is appropriate for some people. I understand your concern and i will look into the specific thing, but building more homes is good for Affordable Housing. Thank you, thanks to the eight of you for joining us today. For senators who wish to submit questions, those questions are due one week from today, wednesday, december 13th. To the banks, please submit your responses to these questions for the record no more than 45 days from the date you receive them, thank you again, the hearing is adjourned
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