Congress proposes reestablishing Dodd-Frank protections
Lawmakers in Congress have introduced the Secure Viable Banking Act, legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank (SVB) and Signature Bank. That Trump-era law reduced oversight and capital requirements for banks like SVB, which in part may have helped lead to that bank’s collapse.
Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act raised the asset threshold at which a bank is considered and regulated as a “systemically important financial institution” to $250 billion, exempting SVB and other mid-sized banks from regular stress testing and enhanced liquidity, risk management, and resolution plan, or “living will,” requirements. The lawmakers’ new bill would repeal these regulatory rollbacks, which some say invited banks to load up on risk and increase profits, and restore protections established under the Dodd-Frank law enacted after the Great Recession of 2008–09.