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okay I'm a major skeptic on crypto tokens which you call currency like Bitcoin they are decentralized Ponzi schemes and and the notion that's good for anybody is unbelievable well good afternoon I'm excited to be here with each of you before I get started on my questions Mr Moynihan I wanted to let you know so Ruthie raise your hands to Ruthie she has been my team member for a couple of years now but on Monday she becomes a Bank of America team member about which she is very very excited so I hope you'll take good care of her and know and recognize the talent that she has shown already in our office I'm sure she'll do the same at Bank of America we will do that and her father already works for us so he'll take care of it you should have called us today we'll continue a tradition we started last year and hear from CEOs of the nation's seven biggest retail Banks after years of consolidation and concentration through banking crises and rubber stem mergers your Banks dominate the banking industry together you have over 13 trillion thirteen thousand billion dollars in assets that's half the nation the wage growth which means that the average person's spending power is going down not up last six months we've seen inflation over eight percent fast forwarding another six to 12 months where are we and why you know the economy is facing some very tough things okay we have a strong U.S consumer they're spending money still 10 over prior 10 over the last year 35 or prior year they're checking accounts are in better shape their balance sheets in better shape their Debt Service ratio is actually almost historical lows uh obviously it's being eroded by inflation but it's meat and that's kind of the current in the future not that far away you have QT Rising rates you know more inflation more in Ukraine which is deteriorating oil prices which I still think are kind of precarious and yeah those things have the potential to put the country and the world into recession which will obviously help inflation but it's not the preferred way to get there so the worst out the worst outcome is stackflation so concrete inflation is a very important thing to do welcome to key stock and crypto Channel and we have the big Bank CEOs back in front of Congress and the big banks are the biggest what I'm going to let you finish that and these big Banks get billions and billions of dollars from overdraft fees even during the c word they were collecting them during the housing crisis and the banking collapsed a lot of these Banks were Consolidated a lot of these credit unions are in like a credit union network and a lot of people don't even know that so these big banks on a lot of these Credit Unions when we look at these big Banks and big corporations is all monopolies and while the FED is raising rates and shrinking this balance sheet they're going to get the rest of these small Banks and they're going to allow these small businesses to Fall by the wayside because there's no way you can fund your business with no Capital so these big Banks and big corporations are going to pick the winners and losers these big banks are well positioned for the downturn as you listen and then plus guys there's a new digital economy is going to rise as a legacy Market Falls we know about JP Morgan coin and like he stated they're moving trillions and trillions of dollars digital already Federal Reserve 2.0 on blockchain is on his way but guess all I have for you have a wonderful day very important thing to do so when I look at the credit card balances they're going up not down the challenges for small businesses finding employees of course not better the truth is that in many ways our economy is looking at some really strong headwinds we would hope that the worst is in the back in the rear of your mirror but truly it perhaps is in the windshield and I just wonder as we think about the stress tests and trying to break this down for the average person at home listening to a banking hearing I'm not sure why they would be listening but just in case they are the question I ask myself is we have these conversations about Capital requirements going up which means that loans will go down and inflation still is heading in the wrong direction finding employees is harder than it was having been a small business owner that formula looks like a first-time business owner minority business owners are going to have a harder time getting the credit they need to grow and strengthen the economy in their neighborhoods am I wrong when you add all that together I think there are capital requirements which are causing us to reduce lending right now to build up Capital because of a recent stress test which I thought was completely unnecessary the stress tests actually proved that we are in a healthier position than we've ever you all are in healthier position you've ever been in therefore increasing the capital requirements that reduces loans might have the unintended perverse consequence for small business owners trying to figure out how to bring more opportunities to their communities is that accurate this major seems abnormally yeah um yes that seems a possible outcome anyone disagree with that so to me it seems like the solution is if if our stress tests and the challenges that were the challenge that we're putting our banks through in order to make sure that they are healthy enough to endure a pandemic or 2008 should suggest if we want more lending for more business startups then we would be heading according to Vice chairman bars comments we would be heading in the wrong direction thoughts I love when you guys are silent says so much Senator if I may um there's two things that have changed over the last few years one is the Cecil accounting standard which causes Banks to have to reserve for the life of the loan potential losses as we go into a slower economic period which I believe we're going to go into it's going to cause Banks to reserve and pull money off the table at the same time as we're raising Capital requirements which are also which is also going to pull money off the table so effectively we're Pro cyclical in the potential downturn that we're going to face here from those two effects can people as you do Mr Diamond I don't think that their choices is to end up in overdrafts your Banks made 64 billion dollars collectively last quarter 64 billion so it's clear to me that there's no reasonable explanation to continue to charge overdraft fees on Working Families uh you just have I don't like to brag about the expensive places I've been the night before last I went to the grocery store yeah inflation is gutting the American people like a fish now we know what our Federal Reserve is doing on the monetary side you know America is uh the leader in World Financial Services uh but that said it's a privilege and there are other countries that are working at a transformative pace in innovation so uh having uh China come up at the conclusion of Mr tester's conversations with you I want to start uh with that issue Mr Diamond um I want to ask you about a comment you made last month you said China looks at America and they say you have been incompetent and lazy and then you said there's some truth to that um so I too am concerned that too many in the financial services industry have been lazy and they don't see the transformative Pace at which the rest of the world is innovating uh Payments Technology For example is far too slow and costly so your bank is currently testing JPM coin it's a type of stabled coin for faster settlement uh could you talk a little bit about um our duty to responsibly innovate to stay a world leader same question to Mr cecere America already is the world innovator and world leader and China is a serious competitive strategic issue we all have to deal with and so I totally agree with that I don't think Americans should be embarrassed I mean we still have the most prosperous Nation to plan that all of the food we're in energy we need free enterprise the gifts of God the gifts of our founding fathers they have autocracy not enough food warrant energy they need 15 million barrels of oil a day they get four from themselves or their immediate neighbor stuff like that we're in very good shape the The Lazy part I'm talking about his policy is things we got wrong or we could have done better immigration taxation regulation Health Care litigation all those things I think of slowed down in America I think we should be focusing more how can we grow more and create more wealthier afford more military et cetera et cetera and innovation in cryptocurrency they are they're probably head in a couple of areas and I think we should recognize that and combat that and I'm not really worried about it as long as we get our act together Sarah I agree I think one particular particularly critically important is money movement and payments activity and I think the banks are working together with each other as well as our regulators and activities like real-time payments sale even fed now all those things I think will put position as well for future payments activity um anyone else want to weigh in on this well I think colleague spoke to it but it the real-time payment system the ability to get a 24x7 wire system at the FED would be critical to it in their new real-time system ought to provide that but one of the disadvantages and payment system technology is ability to pay on the weekends and most substantial amount of money that actually clears t plus zero security settlement would be doable if you actually could have the money move during the night and so I think we're all aware of that we've connected our real-time payment system we're connecting it to other parts of the world that we've put together through the Clearinghouse that'll enable money to move real time you connect that with Zell and things you can move it with no cost to another banking client as long as someone doesn't step in and say oh that is not sufficient to have sent today or in Spain you do the kyc so we can rely on it we we need some enabling things and I think you know if we do that right we can take you will see the Innovation this is already set up and already moving and by the way we move trillions and trillions and trillions dollars a day very efficiently um you know so I think people's view of what's inefficient is kind of interesting but you have to look at what really moves well money was transferred in uh cryptocurrency as donations to Ukraine they were spending it the next day and if it had been transferred in U.S dollars it would have taken about 10 days for it to reach I see some of you shaking your heads disagree Mr Diamond right now we're moving 10 trillion dollars around the world zipping and zapping through AML systems ofac systems regulations AI systems cyber systems safely immediately a lot of its real-time you're talking about retail payments yes I am yes and I agree with that that's a thing that we all can work on Wells Fargo Bank of America JPMorgan Chase truest U.S bank and PNC jointly created and owned the nation's most popular peer-to-peer payment platform so the banks Market sale as quote fast safe and an easy way to spend money end quote that is only partly true uh it is definitely fast sell is fast Zell is easy and they increase Bank profit margins but Zell is not safe last year alone sale users were defrauded out of about a half a billion dollars that we know of now you built the system you profit from every transaction on the system and you tell people that it is safe but when someone is defrauded you claim that's the customer's problem we do oversight on Banking Committee so I want to know exactly how big this problem is in July other senators and I wrote to ask you how many fraudulent Zell transactions your customers have reported since 2018.
all only Mr Rogers of truest provided the data 52 000 claims of fraud totaling 46 million dollars thank you Mr Rogers for being transparent but the rest of you stonewall so today I got to ask you in person do I have any volunteers who want to go first and share the numbers that I asked for in July or will I just pick volunteers okay if you represent the largest bank here today so let me start with you you didn't provide any of the information that we requested in our letter none of it so what I want to know is is that because you don't keep track when your customers report fraudulent Zell transactions or is it because you do keep track and you know exactly how many fraudulent transactions have been reported and you want to keep that report a secret I I deeply apologize if we didn't give you the numbers you asked for I'm sure we responded and we pay anything that's unauthorized we do cover so you're really talking about authorized transactions that we have enormous amount of systems to stop and the amount of fraud relatively is very small for this free of charge service I very much appreciate appreciate that you're going to get the commercial for Zell but if I don't have the numbers I don't have any way to verify that you're going to get them immediately okay you want to give me a ballpark right now I don't
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