CBA’s Johnson to Congress: Banks Will Continue to Help Families Achieve the American Dream

WASHINGTON, D.C. - Testifying before the U.S. Senate Banking Committee at a hearing entitled "The Affordability Agenda" today, Consumer Bankers Association (CBA) President and CEO Lindsey Johnson will highlight how America's leading Main Street banks drive the economy forward and urge policymakers to address the root causes of affordability.

Key excerpts from Johnson's prepared opening statement are below.

On the important role America's leading Main Street banks play in driving the economy forward:

"For as long as there has been an American economy, banks have helped families and small businesses build within it […] Banks take deposits and put them to work in communities, helping consumers establish credit, finance an education, buy a car, purchase a home, and start or expand a small business. For millions of Americans, a credit card or small loan can help a family move from credit invisibility to financial opportunity […] Banks will continue to serve as foundational partners in American life and support opportunity, promote stability, and help families achieve their own American Dream."

On how bank products like credit cards can help hardworking Americans make ends meet when facing an unexpected expense:

"When a paycheck and a bill do not line up, when a car breaks down or when hours are cut, banking products can be the bridge between a difficult month and a genuine crisis. A credit card, an overdraft service, or a home equity line of credit can help a family absorb a shock, stay current, and keep moving forward. Banks also provide another layer of support consumers may not always see: fraud prevention, payment security, and the technology that makes modern commerce possible. They help families and businesses participate safely in the domestic and global economy."

On how misguided proposals could inadvertently restrict access to credit for those who need it most:

"As policymakers consider additional solutions, it is important to preserve the financial tools that help families manage through difficult moments. While "quick fixes," like credit card rate caps to address affordability challenges may feel responsive, they make it harder for families to weather life's shocks and reduce access for marginal or credit-invisible consumers pushing them towards costlier and less regulated alternatives."

On the need to continue to address the root causes of affordability:

"Today's economy and consumers remain remarkably resilient, but affordability is still a real concern for many families, as essentials like housing, health care, food, and transportation-what we refer to in our written testimony as the "four horsemen of affordability"-continue to pressure household budgets […] Congress, this Committee, and the Administration deserve credit for advancing solutions, focused on core sources of affordability challenges-including pending bank capital proposals that will enhance lending capacity, bipartisan work to expand housing supply, and support for small business lending. Banks cannot solve structural affordability challenges alone. But banks can-and do-help families manage through them-ensuring access to essential credit and liquidity-in a competitive and sustainable way."

To read Johnson's full written testimony, click HERE.

The Four Horsemen of Affordability

CBA recently released a new white paper, "Affordability and Household Expenses, Big and Small: Evidence from Public Federal Data 2013-2024," authored by economist Dr. Alexei Alexandrov, analyzing how American household income and expenses have evolved over the past decade, examining the key areas that today's consumers are struggling to afford, and key considerations for policymakers.

The findings underscore that rising affordability pressures are concentrated in four major categories: housing, healthcare, food, and auto. It also highlights how these costs are most burdensome for lower income consumers, because, while real incomes kept pace with rising expenses, consumers in the bottom two quintiles consistently spent more than they earned.

The paper also looked at various financing charges, which are themselves an expense for consumers, and found that credit card interest, overdraft, or other bank fees represent a relatively small share of overall household spending - and importantly, that they represent the critical need of these products as a shock absorber for millions of consumers.

CBA Advocacy

• To read CBA President and CEO Lindsey Johnson's recent newsletter on affordability and the American consumer, click HERE.
• To read a recent blog post on the affordability story behind credit card balances, click HERE.
• To read a recent blog post analyzing the real story behind rising household costs, click HERE.
• To read CBA's "Vision for America - A Bank Policy Agenda for All," which outlines the retail banking industry's priorities, beliefs, and positions on a number of consumer-focused financial services policy issues, click HERE.
• To read CBA's white paper calling for CFPB reforms to transform the CFPB into the credible, durable regulator that consumers deserve, click HERE.