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20 July, 2024
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Banks fail Menendez's quiz on $4 billion consumer paybacks

Senator Menendez unravels banking secrets


In a fiery congressional hearing on Wednesday, Senator Bob Menendez targeted Wall Street's top executives, putting them in the hot seat with a pop quiz on their firms' financial misdeeds.

The focus? How much money had each bank returned to consumers following Consumer Financial Protection Bureau directives for alleged violations.

Despite the CEOs' inability to provide answers, the staggering figures emerged—$4 billion collectively. Menendez emphasized the significance, challenging the banks to acknowledge the impact on hardworking consumers over the past dozen years.

Amid Menendez's legal battles, charged with bribery, the hearing delved into broader issues, including the ongoing Supreme Court case challenging the CFPB's constitutionality. Menendez defended the watchdog, highlighting potential consequences for consumer protection if the lawsuit succeeds.

The hearing also explored new regulations affecting major financial institutions, with a clash over capital reserve requirements.

While big banks argued limitations on lending to lower and middle-income buyers, Senator Sherrod Brown countered, suggesting banks prioritize riskier investments.

The indicted Menendez also confronted banks on overdraft fees, framing them as a choice that disproportionately affects minority communities. Citibank's move to eliminate such fees earned commendation, prompting Menendez to urge other CEOs to learn from the example.

As financial giants navigate regulatory challenges and public scrutiny, Menendez's relentless questioning sheds light on the industry's practices, leaving the path forward uncertain, especially regarding overdraft fees that continue to impact consumers.

[With information sourced from Fortune]

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