Hawley introduces bill to shield bank customers from fees over bailout for failed banks
Sen. Josh Hawley has introduced a bill aimed at shielding banking customers from any new fees to pay for the cost of keeping financially-stressed banks afloat in the wake of the collapse of Silicon Valley Bank and Signature Bank.
Hawley, a Missouri Republican, on Wednesday introduced the Protecting Consumers from Bailouts Act along with Sen. Mike Braun, an Indiana Republican.
The legislation comes after Hawley and other Republicans have attacked Silicon Valley Bank as “woke” and criticized the Biden administration for offering what they have derided as a bailout for the bank’s depositors, many of which are tech firms and other startups fueled by venture capital.
President Joe Biden’s administration over the weekend said the U.S. government would guarantee the deposits of all Silicon Valley Bank customers, including those with accounts greater than $250,000 — the cap for federally-insured deposits. A special assessment will be levied on banks to make up for any payments made to make customers whole, a decision that has drawn the ire of Hawley and other GOP lawmakers.
“Consumers and community banks should not have to shoulder the cost of fiscal irresponsibility by big financial institutions,” Hawley said in a statement. “The Biden administration wants to take money from the American taxpayer and local banks through new fees so they can use it to bail out California billionaires. We must protect hardworking Americans and force the big banks to pay for their own mistakes.”
Hawley and Braun’s bill specifically prohibits banks from passing on to customers the costs of any special assessment related to Silicon Valley Bank or Signature Bank. It also prevents the Federal Deposit Insurance Corporation from levying special assessments related to those banks on community banks, and it would allow the FDIC to claw back bonuses provided to executives at the failed banks.
The stocks of regional and mid-size banks fell Monday but recovered somewhat Tuesday. But fears about the stability of Credit Suisse created new instability in the stock market on Wednesday.
Kansas City-based UMB Financial Corp. stock is down 24% over the past five days. Commerce Bank, which is also based in Kansas City, has seen its stock drop about 5% over the same period.
