President Biden said Monday that the U.S. banking system is “safe and secure” following the failure of Silicon Valley Bank and closure of Signature Bank last week.
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them,” Biden said in remarks at the White House before leaving for a three-day visit to California and Nevada.
Biden blamed the bank collapses on former President Trump’s 2018 decision to scrap some Obama-era banking rules.
“Unfortunately, the last administration rolled back regulations,” Biden said.
Regulators seized control of Santa Clara-based Silicon Valley Bank, which served start-up and venture capital-funded tech companies, late last week.
Then, over the weekend, regulators shuttered New York-based Signature Bank after they determined it also presented a systemic risk. The closing marked the second major bank failure in the span of three days.
The Treasury Department announced on Sunday it would provide a federal backstop to all depositors at those two banks to ensure customers, including those who have funds exceeding the $250,000 federal insurance limit, have access to their funds beginning Monday.
Biden promised that taxpayers would not bear the costs and the money would instead come from fees that banks pay into the Deposit Insurance Fund.
Biden also vowed to hold those responsible for the collapse accountable and said the bank’s shareholders would not be protected.
The president said he planned to ask Congress and bank regulators to restore Obama-era rules that were put in place in the wake of the 2008 financial crisis. In 2018, Trump signed a bipartisan bill exempting midsize institutions such as Silicon Valley Bank from those rules.
Democrats were divided about the overhaul of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, with more liberal lawmakers including Sen. Elizabeth Warren (D-Mass.) warning the changes would put “American consumers at greater risk.”
Sixteen Senate Democrats and independent Angus King of Maine, who usually votes with Democrats, joined Republicans to vote for the bill. In the House, 33 Democrats joined all but one Republican in approving the measure. Florida Gov. Ron DeSantis, a possible 2024 presidential candidate who was a member of the House at the time, was among the Republicans who voted for the bill.
The president is set to meet with British Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese later Monday in San Diego, where the three leaders will unveil new details of the security pact known as AUKUS. Biden will travel to Monterey Park on Tuesday to discuss gun violence.