CNN
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After Silicon Valley Bank collapsed, Florida Gov. Ron DeSantis pointed the finger at several culprits, including the firm’s diversification efforts and federal regulators, who he said “seem to always be concerned about preventing financial Crisis scoffs.”
But DeSantis’s comments made no mention of his own record on bank regulation.As a member of Congress, DeSantis was an outspoken advocate for deregulation of small and mid-sized financial institutions, and 2018 He voted for a bill that eventually became law deregulating midsize banks such as Silicon Valley Bank.
The 2018 legislation that then-President Donald Trump signed into law came under renewed scrutiny amid the collapse of Silicon Valley Bank, the start-up lender’s latest collapse that rocked the venture capital world and brought fears to the country’s financial system. chill. The law, passed with bipartisan support, undoes provisions of the Dodd-Frank Act passed by Congress and signed by President Barack Obama after the 2008 financial crisis, including some for small and medium-sized institutions.
Among the many provisions of the 75-page law is a measure backed by regional banks, Raise the asset threshold Requires federal banking regulators to increase oversight from $50 billion to $250 billion.That affects Silicon Valley Bank, which With $209 billion Total assets as of the end of 2022, according to the FDIC.
DeSantis has said little publicly about the 2018 law, one of his last major votes as a member of the U.S. House of Representatives before resigning to run for governor — but he has repeatedly bragged about Republican votes to repeal Dodd-Frank the year before. Bill in an interview on Fox Business Network.
In one such appearance in June 2017, DeSantis strongly advocated loosening restrictions on banks further down the financial food chain.
“You know, I think Dodd-Frank is very good for the economy, getting rid of the too-big-to-fail situation and really taking the burden off a lot of our small and mid-sized financial institutions that were just hit by Dodd-Frank,” DeSanti S said.
DeSantis’ office declined to comment on his 2018 vote. In an interview with Fox News on Sunday, DeSantis pointed the finger elsewhere, saying: “We have a massive federal bureaucracy, but when we need them to be able to stop something like this from happening, they never seem to be there. ”
DeSantis’ spokesman, Brian Griffin, said Monday that Sunday’s remarks “stand in their own right.”
The 2018 vote was the latest example of how DeSantis’ congressional records are cluttered with what could be a headache for Florida Republicans as they contemplate launching a presidential campaign. CNN’s KFile previously reported that DeSantis already called For the privatization of Medicare and Social Security, both Trump and the Democrats have seized on the position, and DeSantis has since backed out.desantis also Once supported Has taken a tough line on arming Ukraine and confronting Russia, but echoed Trump in recent statements criticizing U.S. involvement in conflicts overseas.
DeSantis isn’t the only one among contenders in favor of repealing Dodd-Frank in 2024.Potential candidates other than Trump, who has successfully pushed Congress to ease banking regulation it is.Tim Scott South Carolina, former Wyoming Rep. Liz Cheney and current South Dakota Gov. Christy Noam vote For the 2018 law.
The 2018 law gave the Fed the flexibility to impose stricter regulations on certain banks with at least $100 million in assets, while banks above that threshold still face “regular” stress tests under the 2018 law. But raising enhanced regulatory standards to $250 billion was seen as a major win for mid-sized banks, driven in part by SVB Chief Executive Greg Becker.
As Baker wrote in congressional testimony to a Senate committee in 2015, those stricter rules “would stifle our ability to extend credit to customers without any meaningful corresponding reduction in risk.”
But DeSantis’ past calls for a more laissez-faire approach to the financial industry are also at odds with his stance. recent move Penalize banks and sever ties with financial institutions that consider factors such as environmental and social interests in their investment and lending strategies, corporates framework known as environmental, social and governance, or ESG. On Sunday, DeSantis blamed progressive corporate policies for the collapse of Silicon Valley Bank.
“They care a lot about (diversity, equity and inclusion) and politics and all kinds of stuff. I think it really takes away from their core mission,” DeSantis told Fox.
The comments mimicked a report from the New York Post over the weekend, another news outlet in Rupert Murdoch’s media empire, which published a report outlining the bank’s diversification and inclusion effortsHis office declined to elaborate when asked what DeSantis was referring to in his comments. Sheila Bair, the former FDIC chairwoman and a Republican appointee of President George W. Bush, laughed off the charge in an interview with CNN on Tuesday morning.
“Let’s not politicize it,” Beyer said. “That’s really useless.”
Florida’s financial ties to SVB were not mentioned in DeSantis’ criticism.Florida’s pension system had invested $1.7 billion as of last June money management Invested by SVB Capital, the investment arm of the financial group behind Silicon Valley Bank.That number has doubled since DeSantis become governor. DeSantis is one of three trustees on the state executive board, the body that oversees the state’s pension fund.
While the state holds a sizeable stake in SVB’s related businesses, the state’s direct exposure to the bank is less than $25 million of the state’s $177 billion in retirement investments, according to a state assembly spokesman.
DeSantis kicks off push to unravel Dodd-Frank in first successful campaign for Florida congressional seat in 2012When he ran as a Tea Party conservative, his platform called for the repeal of Dodd-Frank and Sarbanes-Oxley—one bill overwhelmingly passed In 2002, after the Enron and WorldCom accounting scandals, only three people combined did not vote in the House and Senate.
After his victory, DeSantis helped found the conservative House Freedom Caucus and worked with other conservatives to make the repeal of Dodd-Frank a priority. Earlier, DeSantis was particularly concerned about rollback rules for community banks and voted multiple times for legislation that would repeal much of the law.
But by 2017, with Trump newly elected, House Republicans responded to the president’s broader calls to repeal parts of Dodd-Frank pass through Financial Choices Act.In addition to weakening much of the regulation on banks, it would remove the federal government’s if the bank gets involved Close to collapse. DeSantis voted in favor of the bill.
Appearing on Fox Business’ “Mornings with Maria” four days after the bill passed, DeSantis argued that the bill would free up loans to small businesses. DeSantis argued that “it’s really the small and medium-sized institutions that are hurting,” Dodd-Frank.
He lamented that the Senate was unlikely to consider the House bill. Instead, the Republican-controlled Senate passed its own bill in 2018 with the support of 17 Democrats and sent it to the House of Representatives. The Senate bill does not repeal the Orderly Liquidation Act, but reduces oversight of midsize banks.
DeSantis voted yes, and Trump signed it into law.