We tell Congress to restore depositor protections after SVB failed

We’re asking Congress to give bank agencies their powers back. In 2018, a previous Congress took away certain powers. Those powers would have helped prevent recent bank failures. We’re supporting the Secure Viable Banking (SVB) Act. It was introduced by Senator Elizabeth Warren (MA), Rep. Katie Porter (CA) and others.

The recent collapse of Silicon Valley Bank (CA) was the second-largest bank failure ever. Its failure also led to the failure of Signature Bank (NY). A third bank, First Republic Bank (CA), also had a bank run. It didn’t fail only because several larger banks invested billions of dollars in the bank. All three banks had one thing in common. They had assets between $50-$250 billion dollars.

After the 2008 financial collapse, Congress gave regulators new powers to protect the economy. The 2010 Dodd-Frank reform bill said banks greater than $50 billion in assets were riskier. So, they had to comply with tougher rules. But, in 2018, Congress passed S2155, which we opposed. The new law rolled back the new powers unless a bank was larger than $250 billion. Its supporters attempted to buy consumer group support by including several supposed consumer protections. We weren’t fooled.

The SVB Act simply eliminates the part of S2155 that prevented regulators from requiring mid-size banks to meet enhanced safety standards.

Learn more about how you can make sure your deposits are FDIC-insured in our post “Is My Bank Account Safe?”