US lawmakers propose bills to hold bank execs accountable for failures and address risks
Maxine Waters did not specifically mention crypto in the proposed legislation, drafted in response to the collapse of Silicon Valley Bank, Signature Bank and First Republic Bank.
Democrats with the United States House Financial Services Committee have introduced several bills in what they described as the “first wave” of legislation aimed at addressing failures at major banks.
In a June 21 announcement, committee ranking member Maxine Waters said House Democrats had backed 11 bills drafted in response to the collapse of Silicon Valley Bank, Signature Bank and First Republic Bank in the United States. The proposed legislation — which has not yet gone to the committee’s Republican members for approval — includes measures to impose fines and ban bank executives from future work in the industry should they “negligently contribute to their bank’s failure.”
“The failures of Silicon Valley Bank, Signature Bank, and First Republic Bank make clear that it is past time for legislation aimed at strengthening the safety and soundness of our banking system and enhancing bank executive accountability,” said Representative Waters. “Congress must not sit idly by.”
RM @RepMaxineWaters announces the introduction of a first wave of Cmte Democratic bills to respond to the recent failures of #SVB, #SignatureBank, & #FirstRepublicBank, which were the 2nd, 3rd, & 4th largest bank failures in U.S. history. | https://t.co/NOSRBnc4Jc pic.twitter.com/Dhsn5ZiCMr
— U.S. House Committee on Financial Services (@FSCDems) June 21, 2023
The House Committee, chaired by Republican Patrick McHenry, often discusses matters concerning digital assets, including the oversight of federal regulatory agencies like the Securities and Exchange Commission. Though some lawmakers have pointed to digital assets as contributing to the failures of Signature and Silicon Valley Bank, Representative Waters did not specifically mention crypto or blockchain in the proposed legislation. The lawmaker also did not invoke the crypto-friendly Silvergate Bank — which in March announced its voluntary liquidation — in introducing the bills.
Other measures included in the proposed bills could give regulators the authority to prohibit bank executives from selling stock under certain circumstances — as was the case with Silicon Valley Bank — and have regulators expand banks’ stress testing requirements. One bill suggested restricting bonus payments to bank executives.
Related: Lack of bipartisan support on crypto regulation could make US ‘less attractive’ to firms: Moody’s
Representative Waters said committee Republicans “expressed openness” to some of the legislation at markup, but it’s unclear which bills have any hope of getting through with bipartisan support. Cointelegraph reached out to the California representative but did not receive a response at the time of publication.
Waters previously called for coordination and cooperation between government agencies and lawmakers to address crypto regulation. She told Cointelegraph in February she was “still optimistic” that a stablecoin bill could pass the committee. Lawmakers reviewed a discussion draft of the bill as part of a June 13 hearing on digital assets.
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