Hundreds of lobbyists spent tens of millions of dollars in campaign contributions to fight banking regulation that led to the eventual collapse of Silicon Valley Bank and Signature Bank.
That unlikely coalition voted in 2018 to roll back portions of a far-reaching 2010 law intended to prevent a future financial crisis. But those changes are now are being blamed for contributing to the recent collapse of Silicon Valley Bank and Signature Bank that prompted a federal rescue and stoked anxiety about a broader banking contagion.
“The bottom line is that these banks would have faced a tougher supervisory framework under the original ... law, but Congress and the Trump regulators took an ax to it,” said Carter Dougherty, a spokesman for Americans for Financial Reform, a left-leaning financial sector watchdog group. “We can draw a direct line between the deregulation of the Trump period, driven by the bank lobby, and the chaos of the last few weeks.
That influence was on full display when the banking lobby worked for two years to water down aspects of the 2010 Dodd-Frank law that had placed weighty regulations on banks designed to reduce consumer risk and force the institutions to adopt safer lending and investing practices. A lobbying strategy also emerged, with companies and trade groups that specifically mention Crapo's legislation spending more than $400 million in 2017 and 2018, according to an Associated Press analysis of the public lobbying disclosures.
The Biden administration is working to contain the fallout after the collapse of Silicon Valley Bank, announcing they will back all deposits after the bank’s historic fall on Friday. Authorities also said they closed Signature Bank in New York and that any customer losses will be recovered. NBC’s Brie Jackson reports.
“The lobbyists were everywhere. You couldn’t throw an elbow without running into one," Sen. Elizabeth Warren, a Massachusetts Democrat who vehemently opposed the bill, told reporters last week.As a reward for their work, Heitkamp , Tester and Donnelly became the top Senate recipients of money from the banking industry during the 2018 campaign season, according to OpenSecrets, a nonpartisan group tracking money in politics.
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