SVB collapse: Progressives unveil bill to undo Trump-era rollback of Dodd-Frank

A Sen. Elizabeth Warren Rep. Katie Porter, D-CA), and Senator (D-MA), unveiled Tuesday a bill to revive Dodd-Frank Trump’s administration has repealed regulations.

This legislation would restore the capital rules and stress tests that were relaxed for banks of small and medium size in the wake of the collapse. Silicon Valley Bank These and other institutions.

SVB COLLAPSE. DIRECTOR FAILED BANCK WAS THE AUTHOR OF DODDFRANK REFORM LAW

“President Biden called on Congress and regulators to reverse Trump-era deregulation and ‘strengthen the rules on banks to make it less likely that this kind of bank failure will happen again.’ Today I’m proposing legislation to do just that,” Warren tweeted.

The 2018 Economic Growth, Regulatory Relief and Consumer Protection Act was passed by Congress. This increased the Dodd-Frank threshold to $250 billion for banks who were being considered. “too big to fail.” SVB had assets of approximately $209 trillion, making it the 16th-largest federally insured bank in the United States.

In the aftermath of the 2008 financial crisis, Congress established the Dodd-Frank Act as a regulatory system. In 2018, 17 Senate Democrats joined their Republican counterparts to support the relaxation of its rules. Dodd-Frank was too restrictive for banks of smaller sizes, argued supporters.

Former Rep. Barney Frank, D-MA, co-authored 2010 Dodd-Frank financial Reform package and was director at Signature Bank. Signature Bank failed recently. Frank appeared to be in favor of the relaxation of restrictions.Most of the time“Reasonable at the time.

Senators are joining Warren and Porter, who were her former student, and protege, in running for California’s Senate Seat. Sens. Tammy Baldwin, John Fetterman (D–PA), Bob Casey (D–PA), and Pramila Jayapal(D-WA), Ro Khanna and Ruben Galego (D–AZ) are all joining the effort to move the bill. reported.

A few Democrats have stated that they stand behind their 2018 vote, including Sens. Jeanne Shaheen and Mark Warner (D–VA).

After enduring a bank panic, regulators took over SVB on Friday. Last Wednesday, SVB announced that it had been forced to sell $21 Billion of bonds. This consolidated $1.8 billion in losses previously unrealized. It then announced plans to pursue $2.25 Billion in equity. This spooked customers. Thursday’s withdrawal was $42 billion in a single day.

Officials from the government announced plans this weekend to ensure depositors had access to their money. The move was meant to ease panic that could have rippled through the financial sector. Federal Deposit Insurance Corporation protects deposits upto $250,000. However, SVB fills with deposits over that threshold.

CLICK HERE TO READ MORE ABOUT THE WASHINGTON EXAMINER

On Monday, President Joe Biden committed To “strengthen oversight and regulation of larger banks so that we are not in this position again.”

The odds of Warren and Porter’s bill becoming law are unclear, as they would need to overcome the 60-vote filibuster threshold and pass a Republican-controlled House.