Senator Bob Menendez (D-N.J.) undermined on Wednesday the narrative that blames former President Donald Trump for the collapse of Silicon Valley Bank and Signature Bank.
Democrats, including President Joe Biden, have laid blame at the feet of the Trump administration. They point to a 2018 law that Trump signed to roll back regulations on the financial services industry that had been enacted by the Dodd-Frank Act in 2010.
“During the Obama-Biden administration, we put in place tough requirements … to make sure the crisis we saw in 2008 would not happen again. Unfortunately, the last administration rolled back some of these requirements,” Biden said on Monday.
What did Menendez say?
During an interview on MSNBC, the senior Democratic senator said he opposed the 2018 regulatory roll back and still opposes it.
“I voted against the repeal in 2018 that gave regulators greater oversight over banks like these two that failed,” Menendez said. “I thought it was taking away, you know, critical elements of prudential standards and risks that should have been reviewed by the regulators.”
But, more importantly, he highlighted the role that federal regulators played in the collapse of SVB and Signature Bank.
“I also have to question the regulators. You know, they still had a responsibility of oversight over these banks at the Federal Reserve,” he pointed out. “Was the Federal Reserve not looking at their balance sheets? It seems to me that upon looking at them, there were warning signs.”
“And what was the Federal Reserve, who is raising interest rates, thinking about as it relates to banks like these and maybe others that may be affected by their rate hikes and what that means to their depositors? So, there is [sic] a lot of questions to be raised here, but I think the regulators didn’t get it right.”
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Still, Menendez believes those who supported the regulatory roll backs probably regret that decision today.
Even if the 2018 roll backs were directly responsible for what happened, it would be dishonest to blame Trump solely. That is because the roll back was bipartisan; 17 Senate Democrats and 33 House Democrats voted for it.
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Author: Chris Enloe
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