House Financial Services Committee Demands Transparency from Regulators on Bank Failures

As the Government Accountability Office (GAO) and federal banking regulators prepare to release reports on recent bank failures, the House Financial Services Committee Republicans are stepping up their efforts to get answers from regulators on the collapse of Silicon Valley Bank and Signature Bank. Chairman Patrick McHenry, along with Subcommittee Chairmen Bill Huizenga and Andy Barr, have sent letters to Treasury Secretary Janet Yellen, Acting Inspector General of the Treasury Richard Delmar, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg, demanding additional information regarding the supervisory efforts of their agencies surrounding the recent bank failures.

The latest letters build upon lawmakers' extensive efforts to get answers from regulators on the collapse of Silicon Valley Bank and Signature Bank. Prior correspondence includes letters sent to Vice Chair for Supervision of the Board of Governors of the Federal Reserve System Michael Barr, President and CEO of the Federal Reserve Bank of San Francisco Mary Daly, and Chair of the Council of Inspectors General on Financial Oversight Richard Delmar, among others.

Key Takeaways:

• The House Financial Services Committee Republicans have sent letters to Treasury Secretary Janet Yellen, Acting Inspector General of the Treasury Richard Delmar, and FDIC Chairman Martin Gruenberg, demanding additional information regarding the supervisory efforts of their agencies surrounding the recent bank failures.
• Chairman Patrick McHenry, along with Subcommittee Chairmen Bill Huizenga and Andy Barr, have also sent letters to various regulators, including Vice Chair for Supervision of the Board of Governors of the Federal Reserve System Michael Barr, President and CEO of the Federal Reserve Bank of San Francisco Mary Daly, and Chair of the Council of Inspectors General on Financial Oversight Richard Delmar.
• The lawmakers are demanding information on the regulatory activities of the Federal Reserve and FDIC with respect to Silicon Valley Bank and Signature Bank for the two years leading up to their collapse.
• The House Financial Services Committee Republicans have also requested the Federal Reserve and FDIC preserve all records related to the matter.
• Chairman McHenry and the Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, Tim Scott, have formally demanded information from the Fed and the FDIC regarding their regulatory activities with respect to SVB and Signature Bank for the two years leading up to the collapse of the two banks.

Statistics:

• 5 letters were sent to Treasury Secretary Janet Yellen, Acting Inspector General of the Treasury Richard Delmar, and FDIC Chairman Martin Gruenberg between April 24 and April 27.
• 3 letters were sent to regulators, including Vice Chair for Supervision of the Board of Governors of the Federal Reserve System Michael Barr, President and CEO of the Federal Reserve Bank of San Francisco Mary Daly, and Chair of the Council of Inspectors General on Financial Oversight Richard Delmar, between March 23 and April 26.
• 2 letters were sent to the Government Accountability Office (GAO) on March 17, calling on the agency to study and examine the recent collapse of SVB and Signature Bank.
• 10 letters were sent to regulators, including FDIC Chair Martin Gruenberg, Treasury Secretary Janet Yellen, and others, between March 22 and March 23, demanding information on the regulatory activities of the Federal Reserve and FDIC with respect to Silicon Valley Bank and Signature Bank.

Sources:

• House Financial Services Committee: "Committee Republicans Demand Answers from Regulators on Bank Failures"
• The Hill: "House Financial Services Committee Republicans demand answers on SVB, Signature Bank failures"
• Bloomberg: "House Republicans Demand Answers on SVB, Signature Bank Failures"