Washington, D.C.— With the consumer price index (CPI) continuing to skyrocket and Americans suffering from an unprecedented inflation crisis, U.S. Congressman Andy Barr (R-Ky) pressed the Chief Executive Officers (CEOs) of the seven largest retail banks financing American energy companies to lower prices and rescue the U.S. economy from recession. Many banks are under siege by far-left politicians and activists pushing banks to cut off or restrict access to capital for the American energy sector and other politically disfavored industries. The result has been sky-high energy prices. According to a report from the National Energy Assistance Directors Association, household energy prices are set to hit a ten year high this winter, costing the average family $1,200.
The full transcript of Congressman Barr’s questioning is below:
Barr: Thank you Madam Chair and Mr. Dimon. In your April letter to shareholders you called for a new Marshall Plan to ensure energy security for the United States and our European allies who are overly dependent on Russian energy. I couldn’t agree more, which is why I am so skeptical of ESG (Environmental, Social, and Governance) and the weaponization of financial regulation designed to discriminate against American energy companies. It’s why I oppose the imposition of European style climate stress tests on the U.S. banks, requiring banks to hold more capital when lending to fossil energy or carbon intensive firms, and the Securities and Exchange Commission’s (SECs) flawed climate disclosure rule which would politicize capital allocation, redirect capital away from American energy firms and steer retail investors into higher fee, less diversified, and lower return ESG investments.
I commend you for recognizing in your letter that quote, “national security demands energy security for ourselves and our allies overseas and for rejecting the demands of climate alarmists who have called on you to immediately cut off financing for fossil energy firms,” but my specific question relates to coal since coal still accounts for twenty two percent of all electricity generation in the united states, and you write in your letter that quote, “using gas to diminish coal consumption is an actionable way to reduce CO2 emissions expeditiously.” Mr. Dimon, do you believe that a coal company with a strong balance sheet, little or no debt and a demonstrable track record of credit worthiness should have equal access to conventional bank financing as a natural gas company with similar financial characteristics?
Jamie Dimon: Yes
Barr: Will your institution commit to continue the financing of American coal producers who are still needed and will be for some time to supply the most affordable and reliable source of base load power to the American economy?
Dimon: We are working with the responsible coal producers and utility companies, many of whom by the way, have dramatically reduced CO2 as we speak.
Barr: Mr. Moynihan, I’ll spare you similar questions, but as you and I have discussed and notwithstanding your net zero commitment, I appreciate your focus that job number one is on addressing inflation, and to lower the rate of inflation, we cannot rely exclusively on Fed tightening, we must also address the supply side, and that means more, not less financing of American energy exploration and production. I urge all of the CEOs here to adopt a similarly measured approach to financing fossil energy. Mr. Moynihan, my question pertains to the FDIC’s March request for information on the regulatory framework that applies to merger transactions involving one or more ensured depository institutions. The FDICs action signals a heightened regulatory resistance to bank mergers, presumably on the grounds that consolidation of the banking industry, which has significantly reduced the number of smaller banking organizations and increased the number of large systemically important banking organizations, is a threat to financial stability. My question Mr. Moynihan is which of the following institutions is a more formidable competitor to Bank of America? Is it Sun Trust operating alone, is it BB&T Operating alone or is it the combination of the two institutions now known as Truist?
Brian Moynihan: Undoubtedly the combination of the two institutions is a more formidable competitor.
Barr: And Mr. Rogers, since I evoked the name of your institution, would you care to comment?
William Rogers: I’m proud that Mr. Moynihan named me as a strong competitor to his business.
Barr: I take it from the response from both of these gentlemen that an overtly aggressive resistance to mergers by the FDIC could actually diminish competition at the GSIB level and therefore undermine financial stability. Final question to all of you and anyone who wants to chime in. Do you assess the impact of a CBDC as a positive or negative for our economy and our credit markets? Specifically, how would a CBDC impact your deposit base and therefore your ability to deploy capital in the real economy? Mr. Dimon?
Dimon: If it is properly done it’ll be fine. I don’t trust it will be properly done. You’re not going to have the Federal Reserve running call centers. So, there’s a lot more to banking services than the actual token that moves the money. There are fraud risk alert services, call centers, bank branches, ATM, CRA. So, properly done is not a problem, improperly done you will have an issue.
Barr: Ms. Fraser, with my remaining time, to increase capital requirements, Vice Chair Barr suggests he wants to review this. What would that do to the ability of your customer to repair supply chains and your ability to deploy capital and fix inflation?
Fraser: Given we passed stress tests, which should be a test of whether we have sufficient capital, which is important to safety and stability, and then the question becomes when you increase capital above that limit, then that can have a detrimental effect on one’s ability to lend at the right point when the capital markets shut down.