WASHINGTON (NEXSTAR) — Thursday, Democrats and Republicans crashed over calls to ramp up banking regulations.
Democrats say Congress needs to put US banks on a tighter leash. They point to the recent failures of three regional banks, including California’s Silicon Valley Bank.
“The behavior of these executives and board members was irresponsible at best,” said Rep. Steven Horsford, D-NV.
Democrats on the House Financial Services Committee want to re-instate 2008-era banking regulations, which were repeated during the Trump administration.
“That enabled this mismanagement to fester,” said Rep. Al Green, R-TX
Green said it’s clear banks were eager to abuse the relaxed rules and took on too much risk.
“Silicon Valley Bank increased from 56 billion to 209 billion,” Green said.
But Republicans blame federal regulators for neglecting to do their jobs.
“Regulators had the tools at their disposal to prevent these bank failures from happening and they missed it, period,” said Rep. Bill Huizenga, R-MI.
A top government watchdog told lawyers both bankers and regulators dropped the ball.
“At the end of the day, it’s banks’ responsibility to manage the organization. However, we think if there are repeated problems, that the regulators need to take more forceful and early action,” said Michael Clements, with the non-partisan US Government Accountability Office.
“Dates were allowed to slip,” Clements added.
President Biden said he wants Congress to give federal regulators better enforcement tools and raise the penalties on reckless bankers.
Lawmakers are scheduled to have another oversight hearing on the issue next week.