A group of mid-size banks spent nearly $50 million on a lobbying blitz supporting 2018 legislation that eliminated oversight rules experts now say could have prevented the recent collapse of one its members, Silicon Valley Bank, or SVB.
That legislation, which received bipartisan support in Congress, eliminated key reforms instituted by the Dodd-Frank Act in 2010 for banks with between $50 billion and $250 billion in assets — regulations developed after the last major financial crisis. The two-dozen mid-size banks that stood to benefit from the 2018 bill spent $46 million lobbying lawmakers and executive branch agencies over a key 18-month period while the legislation was being discussed and implemented, a Grid analysis has found.
The banks’ lobbying efforts were accompanied by a flood of campaign cash to key federal lawmakers. Members of the Senate Banking Committee received $2.4 million in campaign contributions from the commercial banking industry during the 2018 campaign cycle.
It paid off: The bill was a rare bipartisan success. The Senate passed it with a 67-31 vote in March 2018, and the House followed, voting 258-159 in May, before then-President Donald Trump signed it into law. Sen. Mike Crapo (R-Idaho), the then-chair of the Senate Banking Committee, said at the time that “relief from enhanced prudential standards” for banks with less than $100 billion in assets was “a key provision of the bill.”