Democrats, including President Joe Biden and Sen. Elizabeth Warren (D-Mass.), are blaming Donald Trump for the sudden collapse of two banks, Silicon Valley Bank and Signature Bank.
But Barney Frank, a leading sponsor of the Dodd-Frank Act, sharply disagrees.
The law, signed by then-President Barack Obama in 2010, made significant changes to Wall Street regulations and federal financial regulatory agencies in the aftermath of the financial meltdown in 2008. The bill, though controversial, was theoretically designed to protect Americans.
What are the accusations?
Democrats say Trump is responsible because he signed a law rolling back some of the regulations enacted by the Dodd-Frank Act.
- Biden: "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."
- Warren: "In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank regulations."
It's true that Trump signed that law. But what Biden and Warren failed to mention is that rolling back the regulations had widespread bipartisan support. In fact, 17 Senate Democrats and 33 House Democrats supported the bill, demonstrating that it was hardly a one-sided effort.
What is Frank saying?
In an interview with Politico, Frank said he doesn't think the 2018 rollback had any impact on the failure of the banks.
"I don't think that had any impact," Frank said. "They hadn't stopped examining banks."
Frank is no partial analyst. After all, he sat on the board of the New York-based Signature Bank until Sunday when it was shut down. But his perspective is strengthened by the fact that he does not believe the rollback of regulations he helped craft contributed to the rapid downfall of Silicon Valley Bank and Signature Bank.
More from Politico:
Frank, who served on Signature’s board since 2015, said his bank was in “good shape” but was hit with a run generated by “the nervousness and beyond nervousness from SVB and crypto.” The bank’s digital assets business made it the “unfortunate victim of the panic that really goes back to FTX,” the cryptocurrency exchange that failed last year.
"I think, if it hadn't been for FTX and the extreme nervousness about crypto, that this wouldn’t have happened — even to SVB or to us," Frank explained. "And that wasn’t something that could have been anticipated by regulators."
Frank reiterated his feelings about the 2018 rollback in an interview with the Wall Street Journal.
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