WASHINGTON — Sen. Sherrod Brown, D-Ohio, the chairman of the Senate Banking Committee, struck a critical tone of the banking industry's lobbying during comments at the American Bankers Association's Washington Summit.
Following the failures of Silicon Valley Bank and Signature Bank, Brown said that he's not "ruling out" legislative action, but that most of the changes to bank regulation in the short term will likely come from regulators, most notably the Federal Deposit Insurance Corp., and the Federal Reserve.
"My job here is oversight," Brown said.
Brown noted Silicon Valley Bank CEO Gregory Becker's past comments to Congress as it considered some changes to Dodd-Frank, particularly around the regulation of midsize banks. Brown said that the executive told Congress that the bank had a low risk profile. Some Democratic lawmakers have
"SVB spent hundreds and thousands of dollars pushing for exemptions for banks like theirs," Brown told the room full of bankers. "I know many of you think that critique is unfair. Many of you get unfairly targeted because big banks screw up."
Brown put out a call for the bankers to let Congress and regulators develop rules around midsize banks, and to hold off lobbying for weaker regulation.
"Please don't use this crisis to come and lobby Congress to weaken standards," Brown said. "I think we continue to pay the price when that happens."
He doubled down later in response to reporter questions.
"Banks, they need to back off their lobbying and let us do this without too many members of Congress being in the pockets of ABA and the banks," Brown told reporters after his public comments. "I'm sure that's not what they wanted to hear."
The American Bankers Association said a statement that the group isn't lobbying for any kind of specific regulatory changes as a result of the bank failures.
"To the contrary, we want to know what happened and why the very robust oversight and supervisory tools already in place today were not fully utilized," said Jeff Sigmund, an American Bankers Association spokesman. "Until we have those answers, it's premature to suggest changes to current rules."
Brown's comments are indicative of an increasing divide between Republican and Democratic lawmakers on the supervision of midsize banks. Democratic lawmakers have called for legislation and regulatory change, while Republican lawmakers have
"I think we need to dig in a little deeper into why the regulators did so little," said Sen. Tim Scott, R-S.C., ranking member of the Senate Banking Committee, in comments at the same conference later in the morning.
