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Congress will examine what happened to Silicon Valley Bank and look at ways to prevent future bank collapses, Senate Majority Leader Chuck Schumer (D-N.Y.) said in opening floor comments on Tuesday, as senators returned to session amid the closing of SVB as well as Signature Bank.
Schumer said if the damage of the bank’s collapse had spread through the banking system, deposits of Americans and businesses would have been at risk, he said the system “is stable” and credited President Joe Biden and regulators for “taking swift action.”
A group of Democratic lawmakers led by Senator Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.) will unveil legislation to strengthen bank regulations, including reducing the “too big to fail” threshold for banks to $50 billion in assets from $250 billion, NBC News reports.
Meanwhile, Sen. Jon Tester (D-Mont.) is urging regulators to use every tool at their disposal to hold SVB’s leadership to account, calling for a clawback of any bonuses received by the executives of the failed Silicon Valley Bank.
“It is completely unacceptable for executives overseeing a Bank at the time of its failure to compensate themselves on the way out the door,” Tester wrote in a letter to Federal Deposit Insurance Corporation Chairman Martin Gruenberg and Federal Reserve Chairman Jerome Powell. Read more
MORE ON THE FINANCIAL FALLOUT
- The Federal Reserve is considering changes to its rules governing midsize banks following the collapse of three lenders, a move that may entail extending restrictions currently applying only to the largest Wall Street firms. Read more from the Wall Street Journal
- US prosecutors were investigating Signature Bank’s work with crypto clients before regulators suddenly seized the lender this past weekend, according to people familiar with the matter. Read more
- America’s banking system remains on steady footing even after the collapse of Silicon Valley Bank and state regulators’ seizure of Signature Bank, Federal Reserve Governor Michelle Bowman said. Read more
Also Happening on the Hill
- The House returns next week.
- The Senate meets at 10 a.m. to vote on nominations.
Democrats are pushing to defend transit funding from any broad federal spending cuts looming on Republican legislative agendas this year.
Senate Judiciary Chairman Dick Durbin (D-Ill.) said he’s not sure about how much support to expect for federal appeals court nominee Michael Delaney, who’s under fire over his representation of a prep school in litigation with a student victim of sexual violence.
Elections, Politics & Probes
Florida Gov. Ron DeSantis (R) is targeting Big Tech with a plan he says will bolster consumer privacy protections, guard against censorship, and enshrine other “digital rights”—though critics charge aspects designed to appeal to the GOP base may not meet constitutional muster.
The company behind former President Donald Trump’s Truth Social has trimmed staff while awaiting regulatory approval for a merger that offers a financial lifeline, according to two people with knowledge of the matter.
Around the Administration
- Biden will discuss his plans to lower prescription drug costs today at 11:30 a.m. PDT at the University of Nevada, Las Vegas. The president returns to the White House at 7:50 p.m. EST.
Biden on Tuesday detailed a new executive order aimed at increasing background checks on gun purchases, an effort to address gun violence even as the prospects for further legislation in Congress remain dim.
TikTok’s leadership is discussing the possibility of separating from ByteDance, its Chinese parent company, to help address concerns about national security risks.
Energy Secretary Jennifer Granholm defended the Biden administration’s approval of a massive ConocoPhillips oil drilling project in Alaska, arguing that fossil fuels are still needed even as the president seeks to reach net carbon neutrality by mid-century.
- ConocoPhillips wasted no time beginning work on its controversial $8 billion project after its approval. Read more
- Environmentalists and indigenous groups filed a federal lawsuit challenging the Biden administration’s approval of the oil project, arguing the government failed to consider smaller, greener options for development. Read more
Jonathan Blum was a Senate staffer early in his career when Congress developed the original Medicare Part D prescription drug program.
Touring musicians, historians, and other groups are warning of potentially unforeseen negative effects on business and research from massive immigration fee increases the federal government is proposing this year.
With assistance from Laura Litvan
To contact the reporter on this story: Michaela Ross in Washington at firstname.lastname@example.org