Durbin Applauds The Administration’s Response To Collapse Of Silicon Valley Bank
On Senate floor, Durbin raises concerns about Trump’s decision to roll-back Dodd-Frank; cryptocurrency
WASHINGTON – In a speech on the Senate floor today, U.S. Senate Majority Whip Dick Durbin (D-IL) spoke about the recent collapse of Silicon Valley Bank and applauded the Biden Administration’s swift action to minimize the damage. During his speech, Durbin slammed former President Trump’s decision in 2018 to roll-back critical parts of the Dodd-Frank Act—the strongest bank regulations since the Great Depression.
“Americans woke up with a bad case of déjà vu. We witnessed the biggest bank collapse since 2008,” said Durbin. “This time, thankfully, President Biden and federal regulators stepped in—swiftly—to minimize the damage caused by the failure of Silicon Valley Bank (SVB). Their actions helped protect the financial security of Americans across the country, including small business owners in my home state who banked at SVB and needed to make payroll. But there’s an important lesson here. It’s the same lesson we learned after the Great Recession, and the Great Depression before it: The financial industry cannot be trusted to police itself. We need cops on the beat—not just for the biggest Wall Street banks, but any bank that families entrust with their life savings and paychecks.”
Durbin went on to commend President Biden’s decision to not bail out SVB with American taxpayer dollars. He also highlighted the President’s reassurance that our banking system is safe. Durbin went on to state that we need to take action to prevent these financial crises from happening in the first place, which is why Congress passed the Dodd-Frank Act after the Great Recession.
“In 2018, the former President signed a law that rolled back critical parts of that bill… The Trump Administration dramatically lowered capital and liquidity requirements for mid-sized banks like SVB. In other words: then-President Trump’s regulatory rollback paved the way for SVB’s collapse,” Durbin continued.
On Tuesday, Durbin joined Senator Elizabeth Warren (D-MA) in introducing the Secure Viable Banking Act, legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018. The legation will restore criticalDodd-Frank Act protections.
Durbin then spoke on the dangers and risks of cryptocurrency. Silvergate Capital and Signature Bank, two of the most “crypto-friendly” institutions, also recently failed.
“[Crypto is] an industry that is rife with instability, fraud, and volatility. So the collapse of Silvergate and Signature is really just the latest example of the risk crypto poses to our economy. For months, I have been sounding the alarm on crypto. Yes, I am a crypto skeptic. The Senate Agriculture Committee—on which I serve—has held multiple hearings in recent months on crypto and proper regulation of the industry. At those hearings, I have warned about the contagion and risk if crypto was more fully integrated into the broader financial system… The fears were confirmed by the failure of these two banks. This asset class—cryptocurrency—is unwieldly, unstable, unregulated, and we cannot allow it to spread risk across our financial system. Frankly, it has already gone too far. And now, we need to be honest about crypto: it is a dangerous, risky investment that needs more transparency, more accountability, and strict regulation,” Durbin concluded.
Durbin has also continuously raised concerns about the inclusion of crypto in retirement accounts, especially how it exposes plan participants to unnecessary risk and could have devastating impacts. Last week, he sent a letter to the Department of Labor (DOL) urging the Department to expeditiously act on the announcement that it would investigate plans that offer investments in crypto.
Video of Durbin’s floor speech is available here.
Audio of Durbin’s floor speech is available here.
Footage of Durbin’s floor speech is available here for TV Stations.
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