Coinbase CEO Touts New Neobank as Crypto-Friendly Banks Disappear

Senators Bemoan Overturning of the Dodd-Frank Act Under Trump

Crypto critic Elizabeth Warren echoed the sentiments. She said that the government’s weakening of financial rules led to the banks’ collapse.

Bank failures are the direct result of leaders in Washington weakening the financial rules.

In 2018, President Trump signed a law rolling back critical protections.

I fought these changes. I warned that banks would run up risk. I wish I’d been wrong.https://t.co/8c9gpfbGiA

— Elizabeth Warren (@SenWarren) March 13, 2023

Similarly, Democrat Ro Khanna told Bloomberg, “We’ve known since 2008 that stronger regulations are needed to prevent exactly this type of crisis. We must come together to reverse the deregulation policies that were put in place under Trump to avert future instability.”

The legislation the politicians refer to, the Dodd-Frank Act, was introduced after the financial crisis. Congress passed the bill to, at least in part, prevent large companies from destabilizing the U.S. economy. Some of the measures it proposed include forcing banks to increase capital reserve requirements and placing illiquid banks in receivership. The Federal Deposit Insurance Corporation placed Signature and SVB under receivership to pay their depositors.

Donald Trump introduced the Economic Growth Act in 2018 to reduce the Dodd-Frank compliance burden for mid-size banks like Silicon Valley Bank.