Two U.S. senators are taking JPMorgan Chase, Bank of America, Wells Fargo, and other megabanks to task over plans to boost shareholder dividends and spend a combined $210 billion on stock buybacks.
In a joint statement, US Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) say the three banks, plus Citigroup, Goldman Sachs and Morgan Stanley are placing the “entire economy at risk” instead of increasing lending or improving pricing for customers after the Trump administration reduced their capital requirements.
-->The senators say the susceptibility of banks to economic shocks and their likelihood of failing increases when capital requirements fall.
“These actions disproportionately benefit their wealthy shareholders and executives while threatening American financial stability and paving the way for another taxpayer bailout.”
Per Warren and Sanders, the undercapitalization of “Wall Street banks” led to the 2008 financial crisis and the economic recession that followed.
In the letter addressed to JPMorgan Chase CEO Jamie Dimon, Warren and Sanders say the bank has authorized a $50 billion stock buyback plan and raised dividends by 7.1.
On the other hand, Bank of America has authorized a $40 billion stock buyback program and raised its dividend by 7.6, while Wells Fargo has approved a $40 billion stock buyback plan and increased dividends by 12.5.
Meanwhile, Citigroup, Goldman Sachs and Morgan Stanley have authorized stock buyback plans of $20 billion, $40 billion and $20 billion, respectively, while they have increased dividends by between 7.1, 33 and 8.1, according to Warren and Sanders.
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