Barney Frank, a former Congressman representing Massachusetts who helped author the post-recession ‘Dodd-Frank’ legislation that regulated banks, may have played a role in the collapse of Signature Bank that happened this week.
Many are already speculating about Frank’s role in the bank’s collapse after it was revealed that he sat on the board of Signature Bank.
Dodd-Frank architect, Barney Frank, has bank he sits on the board of fail…#SignatureBank #banks #SVBCollapse #SVB #DoddFrank https://t.co/Fi1S2ng1rQ
— Carol Roth (@caroljsroth) March 13, 2023
Worse yet, just a year before, Frank began advocating for revising a key provision of the Dodd-Frank regulations that benefited Signature Bank before its collapse.
In the original Dodd-Frank bill, banks with assets above $50 billion were subject to additional regulations. Frank gave his blessing to a bill passed in 2018 that increased the threshold to $250 billion.
On December 31st of, 2022, Signature’s total assets were around $110 billion, with $88.5 billion in deposits.
Top Democratic legislators attempting to rally their colleagues to support the bill touted Frank’s statement for increasing the threshold.
“I think it’s really important that we debate the actual merits of this bill and not the boogeyman merits: the statements that this bill will somehow lead to the catastrophic downfall of our financial system,” Sen. Heidi Heitkamp (D-N.D.) said in a speech on the Senate floor. “Even Barney Frank disagrees with that evaluation of this bill.”
Heitkamp on Dodd-Frank rewrite: "It's really important we debate actual merits of the bill & not the bogeyman merits, the statements this bill will somehow will lead to catastrophic downfall of our financial system. Even Barney Frank disagrees with that evaluation of this bill."
— Craig Caplan (@CraigCaplan) March 13, 2018
At a House Financial Services Committee hearing in 2014, one year before sitting on the board of Signature, Frank said, “we should look at” revising the $50 billion threshold.
Other lawmakers cited Frank’s statements as the reason why they supported loosening regulations in the Dodd-Frank bill.
“Barney Frank was quoted as saying that for the most part it leaves Dodd-Frank alone,” Senator Thomas R. Carper, D-Del. said, noting that the former lawmaker’s comments helped persuade him to support the plan.
“Those are the original authors,” Senator Jon Tester, D-Mo. said of Frank’s support for the bill. “That’s why it’s called Dodd-Frank” he said, citing Frank and Dodd’s contention that the 2018 bill protected the biggest Wall Street banks.
“It does not in any way weaken the regulations we put in there for the largest banks or that were there to prevent the kind of crisis we had ten years ago,” Frank concluded.
"'It does not in any way weaken the regulations we put in there for the largest banks or that were there to prevent the kind of crisis we had 10 years ago,” [Barney] Frank said.'"
— Joel Goldenberg (@JoelGoldenberg1) March 13, 2023
Frank has repeatedly claimed that his role on the board of Signature did not influence his decision to support a rollback of banking regulations.
“My being on the board has not changed my position on this at all,” Frank said. “These efforts began well before I began at Signature Bank.”
Independent watchdog and ethics groups claimed otherwise before the bill was passed.
“When citing Barney Frank as the historic creator of Dodd-Frank, it’s important to flag he may have different motivations now as the public gauges whether these rollbacks are good for them or good for Wall Street,” said Lisa Gilbert, vice president of legislative affairs at Public Citizen, a government ethics watchdog.
Subscribe to Florida Jolt Newsletter!
As a member of the board of Signature Bank, Barney Frank was a direct beneficiary of the increased threshold from $50 billion to $250 billion. At the time of the bill’s passage, Signature had $40 billion in assets. The bill’s passage allowed it to grow significantly without additional regulatory barriers.
Former Rep. Barney Frank (D-MA) endorsed changes to his own Dodd-Frank law in 2018 that freed mid-sized banks from undergoing stress tests. He sits on Signature Bank's board, which just collapsed.
I reached him via phone tonight and he declined to comment https://t.co/JY77rtNkHt
— Joseph Zeballos-Roig (@josephzeballos) March 13, 2023
Gregg Gelzinis, a banking expert at the Center for American Progress, warned about what might happen if the threshold was increased.
“This legislation reduces the resilience of that critical segment of the banking sector,” Gelzinis said. “It makes it more likely one or many of these banks fail the next time we have severe stress in the financial system, making it more likely they’ll trigger or exacerbate the next financial crisis.”
Other stories you may want to read:
Transactions Frozen for ‘Mompreneurs’ on Etsy Due to Silicon Valley Bank Collapse
Jesus Revolution, a Movie for the Masses-Tracy Caruso Says Jesus is Just Alright With Me 🎶
- ‘State-Sanctioned Kidnapping’ California Bill Would Let Therapists Take Children from Homes Without Due Process - March 27, 2023
- Stormy Daniels Pornhub Web Traffic Skyrocketed After News of Trump Indictment Broke - March 26, 2023
- Video: Memphis Female Collegiate Basketball Player Who Sucker-Punched Rival Charged with Assault - March 25, 2023