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Democrats from the US House Financial Services Committee have introduced several bills that they call the “first wave” of legislation aimed at tackling major bank failures.
In a June 21 statement, senior committee member Maxine Waters said House Democrats supported 11 bills designed in response to the collapse of Silicon Valley Bank, Signature Bank and First Republic Bank in the United States. Among the proposed bills, which have not yet been approved by Republican committee members, were measures to impose fines, as well as a ban on the further work of bank executives in the industry if they “carelessly contribute to the bankruptcy of their bank.”
“The failures of Silicon Valley Bank, Signature Bank, and First Republic Bank make it clear that the time has come for legislation to strengthen the safety and soundness of our banking system and increase the accountability of bank leaders,” Rep. Waters said. “Congress should not sit idly by.”
RM @RepMaxineWaters announces the introduction of a first wave of Cmte Democratic bills to respond to the recent failures of #SVB, #SignatureBank& #FirstRepublicBank, which were the 2nd, 3rd, & 4th largest bank failures in US history. | https://t.co/NOSRBnc4Jc pic.twitter.com/Dhsn5ZiCMr
— US House Committee on Financial Services (@FSCDems) June 21, 2023
The House Committee, chaired by Republican Patrick McHenry, often discusses issues related to digital assets, including the oversight of federal regulators such as the Securities and Exchange Commission. While some lawmakers have pointed out that digital assets contributed to the failures of Signature and Silicon Valley Bank, Rep. Waters did not specifically mention cryptocurrency or blockchain in the proposed legislation. The legislator also did not refer to the Silvergate cryptocurrency bank, which announced its voluntary liquidation in March, when introducing bills.
Other measures included in the proposed bills could give regulators the power to prohibit bank executives from selling shares under certain circumstances—as was the case with a Silicon Valley bank—and require regulators to expand stress testing requirements for banks. One bill proposed limiting bonus payments to bank executives.
Related: Lack of bipartisan support for cryptocurrency regulation could make US ‘less attractive’ to firms: Moody’s
Rep. Waters said the committee’s Republicans have “expressed openness” to some of the bills at the mark-up, but it’s unclear which bills hope to pass with bipartisan support. Cointelegraph reached out to the California representative but received no response as of press time.
Rep. Waters has previously called for coordination and cooperation between government agencies and lawmakers to address the issue of cryptocurrency regulation. She told Cointelegraph in February that she was “still optimistic” that the stablecoin bill could pass committee. Lawmakers considered the draft bill for discussion as part of the Digital Asset Hearing on June 13.