U.S. Senators Elizabeth Warren and Bernie Sanders charged that the country’s biggest banks are funneling capital into dividends and executive pay after clearing the Federal Reserve’s stress test, instead of supporting lending to households and firms, according to a Monday media report.
In June, all 22 banks in the stress test had scored above the minimum common equity tier 1 (CET1) capital requirement during a hypothetical recession, prompting the lenders to announce dividend and buyback plans.
JPMorgan Chase (NYSE:JPM), the U.S.’s largest lender, authorized up to $50B in share buybacks and made plans to boost its quarterly dividend to $1.50 per share.
“These actions directly contradict the rhetoric your lobbyists and trade associations are deploying in Washington to sell policymakers on Wall Street deregulation,” the senators said in a letter to JPMorgan CEO Jamie Dimon, Reuters reported. “The behaviour of big banks in 2025 suggests, much like a long body of historical empirical evidence, that this rhetoric is dangerously misleading.”
The Fed last month finalized individual capital requirements for the banks.
Warren and Sanders said that Wall Street is pressing the Trump administration to roll back tougher capital rules meant to keep big banks resilient, a push that the lawmakers warn could hurt the broader U.S. economy, the article said.
Reuters noted that JPMorgan (NYSE:JPM), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS), Bank of America (BAC) and Goldman Sachs (GS) all declined to comment.