Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, delivered the following statement at a full Committee hearing entitled, “The Federal Regulators' Response to Recent Bank Failures.”

Good morning. I’d like to thank Chairman McHenry for working with me in a bipartisan way on investigating the failures of Silicon Valley Bank and Signature Bank. Today’s hearing is the first of what I expect will be several hearings on this important topic.

Chair Gruenberg, Vice Chair Barr, and Under Secretary Liang, the collapse of SVB and Signature Bank earlier this month marked the second and third largest bank failures in U.S. history. In fact, SVB customers withdrew a staggering $42 billion in less than a day, making it the largest bank run ever, and threatening to snowball into a full-blown banking crisis. But 2023 is not 2008. Because of the Dodd-Frank reforms Democrats on this Committee passed as well as the bold and swift response by President Biden, Secretary Yellen and our banking regulators, a crisis was averted, and our banking system remains strong.

However, these events are a wakeup call. We must uncover how management, regulatory, and supervisory failures contributed to these events and explore solutions to strengthen the safety and soundness of our banks. Small business owners should not be expected to serve as a financial regulator when paying their employees, and community banks and minority depository institutions should not have to pay for the failures of bank mismanagement at SVB or Signature Bank.

Since day one of SVB’s collapse, Committee Democrats have been on the case. In fact, under my leadership as Ranking Member, we quickly organized several bipartisan briefings with our nation’s regulators to better understand what happened, share what we were hearing from constituents, and urge regulators to act. Since then, we’ve sent letters demanding answers from our regulators. And, in response to Biden’s call to Congress, I and my colleagues are working on legislation to, for example, enhance clawbacks and other penalties. We also need answers from the CEOs who not only ran these banks into the ground, but enriched themselves.

It’s also important to know how we got here—deregulation. Former and disgraced President Trump said he’d do a “big number on Dodd-Frank” and his appointed regulators did just that. At that time, I sounded the alarm on the dangers of weakening capital and liquidity rules for banks like SVB. The light-touch cautions from the Fed to SVB management are clearly not what Congress intended for bank supervision. I hope Republicans will join Democrats in strengthening compliance with bank rules and transparency over this process.

Before I close, I want to address the extreme MAGA Republican narrative about the bank failures. Let me be very, very clear. Silicon Valley Bank collapsed because of management failures and possible regulatory weaknesses – not because there was one Black man on the board. We saw this same racist playbook during the 2008 financial crisis when some Republicans blamed the Community Reinvestment Act and loans made to people of color. Rest assured, Democrats will not stand for this blatant racism.

With that, Mr. Chair, I yield back the balance of my time.

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