Committee Republicans Are Conducting a Comprehensive Review of Recent Bank Failures
Republicans are working to get the facts regarding potential supervisory failures and the Administration’s response
Washington,
March 28, 2023 -
Ahead of tomorrow’s hearing to examine recent bank failures, Republicans on the House Financial Services Committee are working to hold regulators accountable for potential supervisory failures. Through a series of letters, Committee Republicans are conducting a comprehensive review of the events leading up to the failure of Silicon Valley Bank (SVB) and Signature Bank, as well as the Biden Administration’s response.
On March 17, the Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), and Ranking Member Maxine Waters (CA-43) sent a letter to the Government Accountability Office (GAO) calling on the agency to study and examine the recent collapse of SVB and Signature Bank. Specifically, the lawmakers urged the office to examine the factors that led to mismanagement of both banks, including any regulatory or examination failures.
On March 20, Chairman McHenry and the Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, Tim Scott (R-S.C.), formally demanded information from the Fed and the FDIC regarding their regulatory activities with respect to SVB and Signature Bank for the two years leading up to the collapse of the two banks. The top Republicans also requested the Federal Reserve and FDIC preserve all records, future and existing, related to this matter.
On March 22, Chairman McHenry and the Vice Chairman of the House Financial Services Committee, French Hill (AR-02), sent letters to FDIC Chair Martin Gruenberg and Treasury Secretary Janet Yellen. In the letters, Chairman McHenry and Vice Chairman Hill demanded detailed information regarding the Biden Administration’s response to recent bank failures, particularly regarding whether there was a viable private sector option for SVB and Signature Bank.
On March 23, Republicans on the House Financial Services Committee demanded the California and New York state-level regulators, that supervised Silicon Valley Bank and Signature Bank respectively prior to their failures, provide information regarding their supervisory efforts, coordination with federal regulators, and decision making regarding the failed banks. The letter to Commissioner Clothilde Hewlett of the California Department of Financial Services and Innovation (CDFPI) was led by Subcommittee Chairmen Andy Barr (KY-06) and Bill Huizenga (MI-04), and Congresswoman Young Kim (CA-40). The letter to Superintendent Adrienne Harris of the New York Department of Financial Services (NYDFS) was led by Chairmen Barr and Huizenga, along with Congressman Andrew Garbarino (NY-02) and Congressman Mike Lawler (NY-17).
On March 23, Subcommittee Chairmen Barr and Huizenga sent letters to Financial Stability Oversight Council (FSOC) Chair Janet Yellen and Chair of the Council of Inspectors General on Financial Oversight, Richard Delmar, demanding greater transparency regarding a March 12 meeting of FSOC that focused on the recent turbulence in the banking system. In the letters, Subcommittee Chairmen Huizenga and Barr requested unredacted minutes of the March 12 meeting in addition to a record of all votes taken, among other information.
On March 23, Subcommittee Chairmen Barr and Huizenga, along with Congresswoman Kim, sent a letter to Vice Chair for Supervision of the Board of Governors of the Federal Reserve System (FRB) Michael Barr and President and CEO of the Federal Reserve Bank of San Francisco (FRBSF) Mary Daly expressing concern about supervisory activity conducted prior to the collapse of Silicon Valley Bank (SVB). In the letter, the lawmakers specifically demanded all communications between the FRB and FRBSF, along with the regulators’ communications with SVB and SVB Financial Group regarding supervisory determinations and regulatory red flags, among other requests.
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