Washington The nation’s top bankers came to account for themselves Wednesday to a wary public, displaying a blend of financial might and humility as they pledged to build public trust with greater lending and fewer perks.
“We’re Americans first and bankers second,” John Stumpf, president and chief executive of Wells Fargo & Co., told a House committee.
“As an industry, we clearly made mistakes,” added John Mack, chairman and CEO of Morgan Stanley.
Eight chief executives sat at a witness table for more than six hours Wednesday assuring lawmakers that an infusion last fall of $165 billion in taxpayer money to their banks was good for consumers. The money was part of a $700 billion financial rescue approved by Congress in October.
Lending has increased, they told the House Financial Services Committee, and CEO bonuses have been eliminated.
And while some lawmakers said they hoped that by their testimony the bankers could gain some credibility, some of their inquisitors weren’t convinced. “America doesn’t trust you anymore,” declared Rep. Michael Capuano, D-Mass.
Added committee Chairman Barney Frank, D-Mass: “There has to be a sense of the American people that you understand their anger.”
The financial sector was also in law enforcement’s cross hairs. FBI Deputy Director John Pistole told the Senate Judiciary Committee on Wednesday that the FBI was conducting more than 500 investigations of corporate fraud amid the financial meltdown. Pistole said the bureau may reassign to the fraud cases some of the positions that were reallocated to anti-terrorism work after the Sept. 11, 2001, attacks.
To a man — and, yes, all eight CEOs are male — the executives at the House hearing said they would pay back the taxpayer money by 2012 and sooner if they could help it.
As they made that pledge, Senators on the other side of the Capitol were pressing Treasury Secretary Timothy Geithner without success to reveal how much more money the federal government would have to inject into the financial system to improve lending and reverse the escalation of mortgage foreclosures. Geithner only conceded that further requests could be possible.
“So you have no clue,” said Sen. Lindsey Graham, R-S.C.
Geithner, a day after he outlined an overhaul to the government bailout, continued to face questions about the lack of details in his plan and promised specifics “as quickly as we can.”
The blunt treatment of the financial sector and its Obama administration overseer came as the House and Senate reached agreement on a $790 billion economic stimulus package that represented the other major component of President Barack Obama’s response to the economic crisis.
At the House Financial Services Committee, the bankers represented the eight firms that received capital injections last fall in hopes that the money would unfreeze credit and lead to more lending. Joining Stumpf and Mack were CEOs from The Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., State Street Corp. and the Bank of New York Mellon.