Bank CEOs Pledge to Work on Foreclosures, Pay Back TARP Money

Top U.S. banking executives said they will do what they can to boost lending and stem foreclosures on Wednesday in a hearing before the House Financial Services Committee.

CEOs from Bank of America, Goldman Sachs, Citigroup, Morgan Stanley, Wells Fargo, JPMorgan Chase, Bank of New York Mellon and State Street all faced harsh criticism from representatives for allowing the financial system to come crashing down in 2008.

Bank of America CEO Ken Lewis agreed to place a moratorium on home foreclosures. He also insisted that his bank is doing more lending because of money lent from the Troubled Asset Relief Program (TARP).

On the issue of executive compensation, Lewis said limits on salaries should be kept to the higher levels of administration. If lower-level employees get salary caps, companies are at a risk of losing those workers, he said.

All CEOs agreed that they will repay any money received from the TARP and said they will not need to borrow more.

Vikram Pandit, CEO of Citigroup, was the only executive who said he may still ask for more funds. He also pledged to take a salary of $1 a year and give up his bonus until Citigroup becomes profitable.

By Megan Ainscow and edited by Sarah Sussman
©CEP News Ltd. 2009