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Democratic Rep. Maxine Waters, chair of the House Financial Services Committee, told CNBC on Wednesday banks have “extraordinarily high” executive salaries and should do more to boost employee pay, because they were helped by the Republican tax cuts and are flush with profits.
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“When you take a look at what the entry-level salaries are, the mid-management salaries are, it’s just too big a gap,” Waters said on “Closing Bell.” She was responding to a question about the fairness of top executives at big banks having pay as high as 486 times the median salary of employees.
“They are overflowing with profits, the banks,” Waters said. “They’ve gotten a lot from the tax reform that the president did. And so yes, they should do better by employees; they should be increasing the pay.”
On Wednesday, the CEOs of some of the country’s top banks were on Capitol Hill to testify before the House Financial Services Committee on how the industry has changed 10 years after the financial crisis. They were asked questions on everything from diversity and salaries to Russian accounts and policies involving gun manufacturers.
Waters said when the banks received benefits from the 2017 tax reform signed by President Donald Trump, they pledged to invest that money. She said there’s an expectation they will create new programs, expand branch banking, reduce costs and take other steps.
“I don’t know if all of those investments are there,” she said. “But we have to ask those questions, and we have to follow up with what people say they’re going to do, to make sure that we understand what we must do to correct it with legislation.”
The ranking member of the Financial Services Committee, Rep. Patrick McHenry, R-N.C., used his opening remarks during Wednesday’s congressional event to slam Democrats’ motives: “This is a hearing in search of a headline.”
Waters rejected that claim, saying her job as chair of the Financial Services Committee includes oversight and investigations.
“We have to make sure we’re representing the people of this nation,” said Waters. “And so this is our ordinary business. This is not something extraordinary, and we will have them back every year.”
Waters said she would like to see more diversity in bank leadership and therefore formed a new subcommittee focused on diversity and inclusion “to open up opportunities for others, for women, minorities, etc.” All seven of the bank CEOs at Wednesday’s hearing were white males.
“We have institutionalized racism in the country, and we just have to face it,” said Waters. “And of course, all seven of those bank CEOs were white. And this is typical of what goes on in this country.”
The Democrat also said she’s looking for changes from all the banks after previous abuses led to some fines. She said they need “to stop paying fines as a cost of business. All of them have areas that they can strengthen and do better in.”