[Congressional Record Volume 169, Number 57 (Wednesday, March 29, 2023)]
[House]
[Page H1538]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WALL STREET PUSHES BACK ON REGULATIONS
The SPEAKER pro tempore. The Chair recognizes the gentlewoman from
California (Ms. Porter) for 5 minutes.
Ms. PORTER. Madam Speaker, back in 2017, I took a public stand
against Wall Street and its efforts to roll back the financial
regulations put in place after the 2008 financial crisis. I opposed S.
2155, a deregulatory bill that ultimately passed into law.
Then, in 2017 and 2018, I was running for Congress for the first time
in a politically divided district. Standing against Wall Street wasn't
a safe position to take. In fact, that is why too many Republican and
Democratic lawmakers alike ended up supporting S. 2155. It was seen as
safer to be pro-business.
Every real capitalist knows there is nothing pro-business about a
bank failure. That is why, in 2010, Congress passed strong regulations
to keep our economy stable, our banks viable, and our businesses
growing. Just 8 years later, in 2018, Washington, D.C., reversed course
and passed S. 2155 at Wall Street's behest.
How did we get from this deregulation to the recent Silicon Valley
Bank failure, the biggest bank failure in over a decade?
In short, S. 2155 made it lawful for Silicon Valley Bank to leave
itself vulnerable when depositors wanted their money back faster than
the bank could pay it out.
When you walk into a bank, Madam Speaker, and you deposit $100, the
bank takes most of that $100 and invests it. They buy securities and
bonds. They don't just have your $100 sitting around. However, the bank
is supposed to hang on to a big enough portion of that deposit so that
if you want your money back, they can give it to you. It is
straightforward when a couple of people come in and want their money,
but sometimes a lot of people want all of their money all at once.
Why wasn't Silicon Valley Bank prepared for that scenario?
The bank's recent failure is a deregulation problem. Title IV of S.
2155 raised the asset threshold at which a bank is considered and
regulated as a systemically important bank. What we saw in Silicon
Valley Bank and other similarly sized banks is a result of Congress'
own actions in 2018 when they were removed from these enhanced
liquidity requirement stress testing and other safety and soundness
rules.
Because of these lax regulations, when push came to shove, Silicon
Valley Bank hadn't kept enough liquid assets to pay out the dollars
being drawn out. If Dodd-Frank were still applied to banks of that
size, then Silicon Valley Bank wouldn't have been able to put its own
profits over the stability of our banking system and our economy.
Let's not give banks that choice again. When Silicon Valley Bank
collapsed, Senator Elizabeth Warren and I partnered on legislation to
restore the regulations that were directly implemented as a result of
lessons learned during the 2008 financial crisis, not on the politics
of the moment or the political power of the bank lobby.
Our new bill, the Secure Viable Banking Act, the SVB Act, would
repeal title IV of S. 2155. It would restore Dodd-Frank regulations as
they are applied to banks the same size as Silicon Valley Bank.
Banking failures are bad. We should all be able to come together and
agree that systemically significant banks need regulations to limit the
risks of failure and to reduce the harmful consequences when a bank
does fail.
Let's agree to let Silicon Valley Bank be our last hard lesson. Let's
not swing regulations back and forth with the political tides and whims
of lobbyists. Let's, instead, keep rules in place that deliver a well-
regulated, stable, and growing economy.
My SVB Act would do that.
Madam Speaker, I urge Members to support the bill that creates a
banking system that works for all of us, not just one that boosts
banks' bottom lines.
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