WASHINGTON, DC — Former executives for failed Signature Bank and Silicon Valley Bank were on the defensive at today’s Senate Banking Committee hearing over their efforts to lobby Republicans in Congress to gut key risk assessment safeguards under Dodd Frank in 2018 that ultimately contributed to their own demise.
VIDEO HIGHLIGHTS: Chairman Sherrod Brown noted it was the Trump-era regulatory rollbacks under the direction of former Fed official Randal Quarles that allowed bank executives to take extreme risks at the expense of American consumers. Senator Elizabeth Warren called out the “successful” efforts of SVB’s CEO to lobby Congress to deregulate key Dodd Frank financial regulations and go on to recklessly take on too much risk. When asked directly by Warren, former Signature Bank Chairman Scott Shay admitted he won’t return the generous bonus he received after his bank collapsed.
As government watchdog Accountable.US previously documented, SVB CEO and President Greg Becker “personally led” the bank’s $500,000 lobbying efforts to reduce financial regulations on capital requirements and stress tests. After Becker claimed the bank had a “low risk profile” while testifying against capital requirements, the bank did not have a Chief Risk Officer for eight months while the venture capital market was spiraling ahead of its collapse.
Accountable.US has also documented how the 2018 Republican-led, financial industry-pushed, Trump-signed law that gutted Dodd-Frank’s risk-assessment safeguards for midsize banks gave a key Trump-appointed regulator–Federal Reserve Vice Chair Randal Quarles–all the “discretion” the former banker needed to drive “an overall cultural and practical shift in which banks expected, and got, more lax treatment from their supervisors” – paving the way for banks like Signature Bank SVB to take huge risks beyond their means without fear of real federal consequences.