As First Republic Bank Reports $102B Drop in Customer Deposits, Watchdog Finds Top Exec Gave $2.1M to Republicans After Rolling Back Risk Assessment Regs
Washington D.C. – Amid reports that First Republic Bank has hemorrhaged $102 billion in customer deposits in its first quarter despite receiving a $30 billion bailout from big banks last month, government watchdog Accountable.US released an analysis finding the bank’s top executive personally awarded Congressional Republicans over $2.1 million after passing the 2018 Dodd-Frank rollback bill that gutted risk assessment rules — which experts credit with the recent spate of instability and failures among mid-sized banking institutions. Accountable.US also found First Republic spent at least $250,000 lobbying Congress to water down Dodd-Frank’s reforms that likely could have prevented recent troubles.
News of First Republic’s $100 billion bank run follows reports in March that its 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 left the bank reeling – and then rewarded Republican campaigns to the tune of millions when it got its way. Republicans in Congress like Patrick McHenry that did the bidding of their financial industry mega-donors by loosening critical banking safeguards have been desperate to shirk responsibility as the chickens come home to roost. McHenry and fellow foes of consumer protection invited a culture of hands-off banking supervision during the Trump administration, which led to risky behavior that ultimately caught up with mismanaged banks. There’s only one dot to connect between Chairman McHenry and the troubles mid-size banks continue to face that threaten the stability of the financial system.
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, McHenry and fellow conservatives in Congress are more convinced than ever that banks need even less oversight and accountability. The MAGA House majority insists on protecting their industry donors at all costs -- even at the risk of another Wall Street meltdown at the expense of Main Street.”