NEW: First Republic Bank was taken over by the FDIC and sold to JPMorgan Chase overnight.
These recent bank failures were avoidable. So after the Silicon Valley Bank and Signature Bank collapses in March, I introduced two bills. One would impose guardrails that help prevent collapses like this one. The other would clawback compensation from executives who make millions while overseeing a bank failure.
But even after the first two failures, Congress failed to act on either of these bills.
We know how to help prevent bank collapses. After the 2008 financial crisis, Congress passed legislation to require banks to hold onto more liquid cash. This thicker cushion lowered the risk for consumers—but it wasn't ideal for the banks, which want to invest as much as possible to earn more profit.
Wall Street lobbied to reverse these consumer protections ever since. In 2016, a group of Senators pushed to allow medium-sized banks, like Silicon Valley Bank, to hold onto less liquid cash. I wasn't yet in Congress, but as a consumer protection attorney I sounded the alarm that this was a dangerous move that put people's money at risk. In the end, Congress—in a bipartisan vote—caved to Wall Street and loosened our nation's banking laws.
Banking inherently involves risk, but when bank executives recklessly endanger customers' deposits, they must be held accountable. Capitalism needs guardrails to deliver a strong, stable, globally competitive economy that works for working people.
I'll keep pushing my colleagues to stand up to Wall Street and protect consumers.
Our campaign doesn't take a dime from Wall Street CEOs. I'm the only person in the race who has taken this pledge. I don't want Wall Street's money. I'm running for the U.S. Senate because we need leaders willing to stand up to lobbyists and corporations and fight for the people we represent. Can you join our team today?
Thank you,
Katie Porter
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