BANKS & FAMILY: Banking & Finance: Banking executives to testimony before House Finance Committee article Bank executives who oversaw Faze banks and Synchrony banks have been invited to testify on Thursday about the financial crisis and its aftermath, as lawmakers try to hammer out an interim banking law.
The Federal Deposit Insurance Corporation, the Federal Reserve and the Treasury Department have also all been asked to testify, the House Financial Institutions Committee announced Thursday.
In a letter sent to the banking industry last week, the committee said it’s asking the executives to share their perspectives on the financial crash and its effect on the economy and the country.
The committee is calling on the banks to produce a comprehensive response by the end of March, with an initial public offering or a series of quarterly earnings reports that could be released later in March.
“We’re asking for their perspectives and insight,” said Rep. Elijah Cummings, the top Democrat on the committee.
“If you’re not willing to speak on this, we don’t know what you’re going to do.
If you’re afraid of being fired, that’s the worst thing that could happen.”
Faze and Synchronicity were two of the nation’s largest banks that were part of the country’s largest financial rescue effort during the crisis, and the two firms have been the subject of many scandals and investigations.
Faze was fined $1.7 billion by the Federal Deposit Loan Insurance Corp. last year for failing to prevent a $1 billion fraud at one of its affiliates.
Synchro’s $5.5 billion loan to an affiliate in 2012 for faulty accounting caused a $400 million loss.
Synchronys first bailout of a major bank came in December 2012, when it paid $2.5 million to a former CEO to pay back $4.9 billion in loaned money.
The firm has been embroiled in a string of scandal after a former executive, Peter Higgs, pleaded guilty to fraud and other charges related to a scheme to manipulate a New York-based company into paying back the firm’s loan.
The lawmakers also want to know how the bank executives have managed to survive the crisis.
“We want to find out what they’re doing, what’s going on with their families,” Cummings said.
“How are they coping?”
The lawmakers plan to hold a hearing next week, when Faze and synchronicities executives will testify.