Sen. Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.) introduced a bill that would repeal the Trump-era changes to the Dodd-Frank Act.
“Americans deserve to know their money is safe when they deposit it in the bank,” Porter said. “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.”
The 2018 passage of the Economic Growth, Regulatory Relief and Consumer Protection Act, signed into law by President Donald Trump, made changes to the threshold at which a bank is subject to certain oversight provisions of the Dodd-Frank Act and related regulations. Specifically, it increased the threshold at which a bank is considered a “systemically important financial institution” from $50 billion to $250 billion.
In an opinion piece published in The New York Times, Warren pointed to this change as a key factor in the recent failure of Silicon Valley Bank and Signature Bank.
“Greg Becker, the chief executive of Silicon Valley Bank, was one of the many high-powered executives who lobbied Congress to weaken the law,” Warren wrote. “In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, letting financial institutions load up on risk.
“I fought against these changes,” Warren continued. “On the eve of the Senate vote in 2018, I warned, ‘Washington is about to make it easier for the banks to run up risk, make it easier to put our constituents at risk, make it easier to put American families in danger, just so the CEOs of these banks can get a new corporate jet and add another floor to their new corporate headquarters.’”