Analysis: Troubled First Republic Bank Spent At Least $250K Lobbying to Weaken Dodd-Frank in 2018, Then Awarded $2.1M to Republican Campaigns
Experts Agree Trump-Republican-Led Rollback of Dodd-Frank Rollback Invited Recent Bank Failures
Washington D.C. – A review from government watchdog Accountable.US found First Republic Bank — which spiraled into instability after Silicon Valley Bank collapsed Friday — spent at least $250,000 lobbying Congress to water down Dodd-Frank’s reforms that include risk-assessment measures for banks in 2018, while the bank’s founder has donated over $2.1 million to Republican campaigns since the regulatory rollback. A chorus of experts agree that gutting these safeguards more than likely fueled the current instability crisis among midsize banks. Like Silicon Valley Bank, First Republic Bank pushed lawmakers to go lax on banking oversight in 2018 and got their way from Republicans in Congress, including current House Financial Services Chairman Patrick McHenry, who is deep in the pocket of the financial industry.
Accountable.US’ findings come amid Bloomberg’s reporting that big banks are stepping in to bail out First Republic Bank and Wall Street Journal’s reporting that the bank’s top executives sold $12 million worth of company stock in “the two months before the bank’s shares plummeted during the panic over the health of regional lenders.” WSJ previously reported that: “Investors have grown wary of First Republic for reasons similar to those that caused concern at SVB. Like SVB, First Republic showed a large gap between the fair-market value and balance-sheet value of its assets.”
First Republic Bank spent a quarter million dollars pushing Congress to nix safeguards against the kind of financial system instability that has now left the bank reeling – and rewarded Republican campaigns to the tune of millions when it got its way. It didn’t take much convincing for Congressional Republicans with a vendetta against consumer financial protections after taking money hand over fist from greedy Wall Street banks.
History shows the less oversight and regulation of the banking sector, the riskier their behavior and the greater the likelihood of another financial crisis. And yet alarmingly, conservatives in Congress are more convinced than ever that banks need even less oversight and accountability. Protecting industry donors at the expense of Main Street, even at the risk of a Wall Street meltdown, is the MAGA House majority’s economic plan in a nutshell.”