The Trump Banking Law Rolled Back “Too Big to Fail” Rules; Created Conditions for Collapse of Silicon Valley Bank

Pressley Continues to Call for Financial Services Committee Hearing on SVB Collapse

Text of Bill (PDF)

BOSTON – Congresswoman Ayanna Pressley (MA-07), a member of the House Financial Services Committee, joined Senator Elizabeth Warren (D-MA), Congresswoman Katie Porter (CA-47), and dozens of Democratic lawmakers to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank (SVB) and Signature Bank.

Earlier this week, Rep. Pressley issued a statement on the SVB failure and called for a House Financial Services Committee hearing to investigate the collapse and how Republicans’ 2018 bank deregulation bill contributed to it.

“Make no mistake: the collapse of Silicon Valley Bank was made possible because Trump and Republicans weakened many of the critical banking protections passed after the 2008 financial crisis, jeopardizing the livelihoods of workers, business and families in the Massachusetts 7^th and beyond,” said Rep. Pressley, a member of the House Financial Services Committee. “Congress must restore those critical safeguards and I’m proud to join Senator Warren and Congresswoman Porter on legislation to do just that.”

“In 2018, I rang the alarm bell about what would happen if Congress rolled back critical Dodd-Frank protections: banks would load up on risk to boost their profits and collapse, threatening our entire economy – and that is precisely what happened,” said Senator Elizabeth Warren. “President Biden called on Congress to strengthen the rules for banks, and I’m proposing legislation to do just that by repealing the core of Trump’s bank law.”

“Americans deserve to know their money is safe when they deposit it in the bank,” said Representative Katie Porter, a consumer finance expert. “In 2018, politicians rolled back critical regulations protecting Americans’ deposits—ignoring warnings from financial experts in favor of Wall Street special interests. I’m calling on Congress to restore common-sense guardrails that keep corporate greed in check and restore confidence in our financial system.”

Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act raised the asset threshold at which a bank is considered and regulated as a “systemically important financial institution” to $250 billion, exempting SVB and other mid-sized banks from regular stress testing and enhanced liquidity, risk management, and resolution plan, or “living will,” requirements. The lawmakers’ new bill would repeal these dangerous regulatory rollbacks, which invited banks to load up on risk and increase profits, restoring critical Dodd-Frank protections. 

Joining Pressley, Warren, and Porter on the bill are Representatives Pramila Jayapal (D-Wash.), Jim McGovern (D-Mass.), Hank Johnson (D-Ga.), Jerrold Nadler (D-N.Y.), Dwight Evans (D-Pa.), Bonnie Watson Coleman (D-N.J.), Betty McCollum (D-Minn.), Jan Schakowsky (D-Ill.), Marcy Kaptur (D-Ohio), Jesús “Chuy” García (D-Ill.), Barbara Lee (D-Calif.), Stephen Lynch (D-Mass.), Suzanne Bonamici (D-Ore.), Ro Khanna (D-Calif.), John Larson (D-Conn.), Mark Takano (D-Calif.), Jimmy Gomez (D-Calif.), Jamaal Bowman (D-N.Y.), Eric Swalwell (D-Calif.), Mark Pocan (D-Wis.), Jamie Raskin (D-Md.), Alexandria Ocasio-Cortez (D-N.Y.), Earl Blumenauer (D-Ore.), Jake Auchincloss (D-Mass.), Rosa DeLauro (D-Conn.), Nanette Barragan (D-Calif.), John Garamendi (D-Calif.), Ruben Gallego (D-Ariz.), Cori Bush (D-Mo.), and Robert Garcia (D-Calif.); and Senators Tammy Baldwin (D-Wis.), Cory Booker (D-N.J.), Richard Blumenthal (D-Conn.), Tammy Duckworth (D-Ill.), Ed Markey (D-Mass.), Bernie Sanders (I-Vt.), Mazie Hirono (D-Hawaii), Dick Durbin (D-Ill.), Martin Heinrich (D-N.M.), Bob Menendez (D-N.J.), Bob Casey (D-Pa.), John Fetterman (D-Pa.), Sheldon Whitehouse (D-R.I.), Peter Welch (D-Vt.), Brian Schatz (D-Hawaii), Ben Ray Luján (D-N.M.), and Chris Murphy (D-Conn.).

Text of the bill is available here.

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