Warren, Porter unveil bill to undo Trump-era Dodd-Frank rollback after Silicon Valley Bank collapse

Sen. Elizabeth Warren (D-Mass.)
Greg Nash
Sen. Elizabeth Warren (D-Mass.) questions Federal Reserve Chairman Jerome Powell about his semiannual Monetary Policy Report to Congress before the Senate Banking, Housing, and Urban Affairs Committee on Tuesday, March 7, 2023.

Sen. Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.) have introduced a bill to repeal part of a Trump-era bank regulation rollback law in the wake of the collapse of Silicon Valley Bank.  

The bill, called the Secure Viable Banking Act, would put banks with at least $50 billion in assets back under strict Federal Reserve oversight and Dodd-Frank Act stress tests. A bipartisan 2018 bill to loosen Dodd-Frank raised that threshold to $250 billion, which exempted Silicon Valley Bank and dozens of other banks from the strictest federal oversight.

Warren, one of the lead Democratic opponents of the 2018 bill, and many of her Democratic colleagues have blamed the Dodd-Frank rollback for Silicon Valley Bank’s collapse. 

Five things to know about the Silicon Valley Bank takeover

“In 2018, I rang the alarm bell about what would happen if Congress rolled back critical Dodd-Frank protections: banks would load up on risk to boost their profits and collapse, threatening our entire economy – and that is precisely what happened,” Warren said in a Tuesday statement.

“President Biden called on Congress to strengthen the rules for banks, and I’m proposing legislation to do just that by repealing the core of Trump’s bank law.”

President Biden, who was vice president during the 2010 passage of Dodd-Frank, called this week for stronger banking regulations, blaming former President Trump and some members of his party for making the financial system less secure.

Dozens of Senate and House Democrats have co-sponsored Warren’s bill, but it faces little chance of clearing the GOP-controlled House or a Republican filibuster in the Senate. 

Democrats who supported the 2018 rollback law have argued that Silicon Valley Bank failed due to serious mismanagement and that stress tests would not have necessarily revealed the danger facing the bank. 

Silicon Valley, Signature banks lobbied hard to loosen bank rules

Republican lawmakers, who are generally opposed to tightening bank rules, say Biden administration regulators and the Federal Reserve Bank of San Francisco failed to spot clear signs of Silicon Valley Bank falling apart.

“The underlying causes [were] basic fiscal and monetary policy errors and a failure — not of a lack of regulation — but inadequate bank supervision,” Rep. Andy Barr (R-Ky.), a top GOP member of the House Financial Services Committee, told Fox Business on Tuesday.

“The regulators need to do some soul searching about extracurricular political errands they are on instead of basic nuts and bolts bank supervision.”

Tags Andy Barr Dodd-Frank Act Donald Trump Elizabeth Warren Elizabeth Warren Joe Biden Katie Porter Katie Porter President Joe Biden Silicon Valley Bank

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