House Financial Services Committee Republicans Demand Transparency from Regulators on Bank Failures

Strategic Insights -

House Financial Services Committee Republicans have sent several letters to Treasury Secretary Janet Yellen, Acting Inspector General of the Treasury Richard Delmar, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg, demanding more information regarding the supervisory efforts of their agencies surrounding the recent bank failures. This move comes ahead of upcoming reports from the Government Accountability Office (GAO) and federal banking regulators. Committee Republicans' letters build upon lawmakers' extensive efforts to get answers from regulators on the collapse of Silicon Valley Bank and Signature Bank.

Key Takeaways:

  • Committee Republicans sent letters to Treasury Secretary Yellen, Acting Inspector General Delmar, and FDIC Chairman Gruenberg demanding additional information regarding the supervisory efforts of their agencies surrounding recent bank failures.
  • The letters specifically request information on the Financial Stability Oversight Council's (FSOC) actions, the Treasury's determination to take extraordinary action in response to threats to the stability of the US Financial System, and the effectiveness of the Council of Inspectors General on Financial Oversight (CIGFO).
  • Subcommittee Chairman Andy Barr sent letters to Inspector General Delmar in his capacity as Chair of the Council of Inspectors General on Financial Oversight (CIGFO), requesting a review and evaluation of the effectiveness and internal operations of FSOC surrounding the failures of SVB and Signature Bank.
  • The lawmakers also demanded a full readout of BlackRock Financial Market Advisory's (BR-FMA) acquisition of SVB and Signature Bank securities held in FDIC receivership.
  • Committee Republicans have sent multiple letters to banking regulators following recent failures, including letters to the Federal Reserve, FDIC, and state regulators, demanding greater transparency and information regarding supervisory efforts and regulatory red flags.

Statistics:

  • Multiple letters were sent to regulators by Committee Republicans, including:

+ A letter to Treasury Secretary Yellen on April 26

+ A letter to Inspector General Delmar on April 24

+ A letter to FDIC Chairman Gruenberg on April 24

+ Multiple letters sent on March 23, March 22, March 20, and March 17

  • 12 letters were sent to regulators in the past month, including letters to the Federal Reserve, FDIC, and state regulators.

Sources:

  • Rep. Patrick T. McHenry's news release
  • Committee Republicans' letters to Treasury Secretary Yellen, Acting Inspector General of the Treasury Richard Delmar, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg
  • Government Accountability Office (GAO)
  • Financial Stability Oversight Council (FSOC)
  • Council of Inspectors General on Financial Oversight (CIGFO)
  • BlackRock Financial Market Advisory (BR-FMA)
  • Federal Reserve
  • FDIC
  • California Department of Financial Protection and Innovation (CDFPI)
  • New York Department of Financial Services (NYDFS)
  • House Financial Services Committee