[Congressional Record Volume 169, Number 49 (Thursday, March 16, 2023)]
[Senate]
[Page S811]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                             Bank Failures

  Madam President, on a separate issue, Americans woke up with a bad 
taste of deja vu last week. We witnessed the biggest bank collapse 
since 2008. This time, thankfully, President Biden and Federal 
regulators stepped in swiftly to minimize the damage caused by the 
failure of Silicon Valley Bank. Their actions helped protect the 
financial security of Americans across the country, including small 
business owners in my own home State who banked with SVB and needed to 
make payroll.
  But there is an important lesson here. It is the same lesson we 
learned after the great recession--and even the Great Depression before 
it. The financial industry cannot be trusted to police itself, period. 
We need cops on the beat in our banks, not just for the biggest Wall 
Street banks but for banks that families entrust with their life 
savings and paychecks.
  Banks like SVB want to have it both ways. During boom times, they 
disparage anything to do with government and regulation, but as soon as 
things get rocky or go bust, they come crying to Uncle Sam for a 
bailout. We have seen it over and over.
  Not this time. President Biden made it clear this week that American 
taxpayers won't be bailing out SVB. The President also emphasized that 
our banking system is safe because of the actions regulators have 
taken. Americans should feel confident that their deposits will be 
there if they need them. But we can't stop there. We need to take 
action to prevent these financial meltdowns from happening in the first 
place.
  After the great recession in 2008, Congress passed the Dodd-Frank 
Act, the strongest bank regulations since the Great Depression. Oh, 
there were a lot of big banks whining and crying about too much 
government regulation, but we learned our lesson in the great recession 
and passed that bill in the House and Senate, and it was signed into 
law.
  In 2018, the former President signed a law that rolled back critical 
parts of the bill, and I am speaking, of course, of President Trump. He 
decided that Dodd-Frank went too far, in his estimation, and he rolled 
back some of the protections. And, dramatically, the Trump 
administration's initiative--dramatically--lowered capital and 
liquidity requirements for mid-sized banks just like SVB. In other 
words, then-President Trump's regulatory rollback paved the way for the 
SVB collapse. That is why, on Tuesday, I joined with my colleagues, 
under the leadership of Senator Elizabeth Warren, in introducing 
legislation to correct that mistake and restore critical Dodd-Frank 
protection. This is the least we can do to protect families and small 
businesses that trust banks with their money.
  Importantly, SVB wasn't the only bank that got into trouble this 
weekend. Two other banks, Silvergate Capital and Signature Bank also 
failed. Silvergate and Signature were two of the most crypto-friendly 
institutions and did extensive business with the cryptocurrency 
industry--an industry that is rife with instability, fraud, and 
volatility. So the collapse of Silvergate and Signature is really just 
the latest example of the risk crypto poses to our economy.
  For months, I have been sounding the alarm on crypto. Yes, I am a 
crypto skeptic. The Senate Agriculture Committee, on which I serve, has 
held multiple hearings in recent months on cryptocurrency and proper 
regulation of the industry. At those hearings, I warned about the 
contagion and risk if crypto was more fully integrated into the broader 
financial system. This weekend proved that those fears were not 
unfounded. The fears were confirmed by the failure of these two banks.
  This asset class--cryptocurrency--is unwieldy, unstable, unregulated, 
and we cannot allow it to spread risk across our financial system. 
Frankly, it has already gone too far, and now we need to be honest 
about crypto. It is a dangerous, risky investment that needs more 
transparency, more accountability, and strict regulation.
  The burden is on Congress to act.
  (The remarks of Mr. Durbin pertaining to the introduction of S. 850 
and S. 851 are printed in today's Record under ``Statements on 
Introduced Bills and Joint Resolutions.'')
  Mr. DURBIN. I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDENT pro tempore. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. THUNE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Warnock). Without objection, it is so 
ordered.