Sanders, Warren Urge Big Banks to Prioritize Lending over Dividends

U.S. Senators Bernie Sanders and Elizabeth Warren on Monday called on the nation’s six largest banks to increase lending to households and businesses rather than boosting shareholder payouts. They argued that redirecting capital toward loans would better support economic growth and address rising income inequality.

Key Points

• Sanders and Warren jointly pressed bank CEOs at a Senate hearing.
• Top six lenders have seen record profits and share buybacks amid tepid loan growth.
• Senators warned that prioritizing dividends undermines small businesses and working-class families.

Lead Senators Bernie Sanders and Elizabeth Warren on Monday confronted executives from the country’s largest banks, demanding they use newly eased regulations to expand lending to households and small businesses instead of enriching shareholders through dividends and buybacks.

Nut Graf Speaking at a Senate Banking Committee hearing in Washington, the progressive duo highlighted that despite receiving regulatory relief intended to spur credit, big banks have directed excess capital into share repurchases. They emphasized that boosting loans would deliver tangible benefits to communities struggling with high borrowing costs and stagnant wage growth.

Main Part During the three-hour hearing, Sanders cited Federal Reserve data showing that loan growth at the six major institutions has lagged behind profit increases by more than 10 percentage points over the past year. He warned that this trend exacerbates economic inequality and hampers recovery in small-town America.

Warren, echoing Sanders, pointed to mortgage and small-business loan applications that remain below pre-pandemic levels despite record bank earnings. She pressed CEOs on why dividend payouts continue even as many Americans face credit access challenges.

Bank representatives defended their capital decisions, arguing that healthy dividends underpin market confidence and allow them to raise funds more cheaply. However, Sanders countered that shareholder returns should not come at the expense of lending to communities in need.

The senators concluded by urging the Federal Reserve and the Office of the Comptroller of the Currency to revisit post-crisis capital rules, ensuring that relief measures tie directly to measurable increases in lending rather than financial engineering.