The Silicon Valley Bank (SVB) collapse and turmoil in the banking industry are providing a moment for Sen. Elizabeth Warren (D-Mass.) to jump back into the spotlight.
And Warren, who rose to prominence as a consumer protection advocate and has long made headlines for hammering banks, is seizing the opportunity.
Over the past week, the Massachusetts progressive and one-time presidential candidate has launched a wide-ranging offensive.
She unveiled legislation to repeal a 2018 deregulation law signed by former President Trump that raised the threshold for banks subject to federal scrutiny from $50 billion to $250 billion.
She has been a constant presence on cable news, with more appearances set for this weekend’s Sunday show circuit, penned an op-ed in The New York Times and has pressed former SVB CEO Greg Becker on his lobbying for the 2018 rollback of regulations.
To a number of Senate Democrats, she is an invaluable voice on the subject.
“Very important,” Sen. Bob Casey (D-Pa.), a backer of Warren’s new banking proposal, told The Hill. “She’s got not only a great commitment to consumers and families, more broadly she’s got a lot of expertise and is a great messenger and advocate on these issues.”
But Warren’s ongoing criticism is poised to cause a headache for President Biden and other Senate Democrats, especially those who voted for the 2018 rollback and are up for reelection in 2024.
In total, 12 sitting senators who caucus with the Democrats voted for the bill — including Sen. Kirsten Sinema (I-Ariz.), who voted for it in the House — which raised the asset threshold to $250 billion so SVB and dozens of other banks were exempted from the strict federal oversight.
Warren’s legislation, the Secure Viable Banking Act, was introduced in the House by progressive Rep. Katie Porter (D-Calif.). Despite the warm welcome from some corners of the party, it hasn’t been embraced by Democratic leadership.
When asked if he supports Warren’s blueprint, Senate Majority Leader Chuck Schumer (D-N.Y.) told reporters that “strong legislation” is needed, but that any bill must be bipartisan.
Still, leadership is keenly aware of Warren amid this period of banking tumult. After The Hill noted that Warren has been vocal on the subject this week, Sen. Debbie Stabenow (Mich.), the No. 3-ranked Senate Democrat quipped, “Has she really?”
“She’s always a respected voice, certainly,” Stabenow, who voted for the 2018 bill, said. “[The question is] what exactly are we trying to solve? … I am so grateful that we have President Biden and his team in place. They acted very swiftly and I think in an incredibly competent job to be able to move quickly to calm the waters.”
Biden on Monday blamed the Trump administration for the rollbacks of Dodd-Frank and called on Congress and regulators “to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again.”
Press secretary Karine Jean-Pierre on Thursday said the White House has seen “bipartisan support on a piece of legislation, the [Warren]-Porter bill.” No Republicans had signed onto the bill as of Friday.
Jean-Pierre wouldn’t say if the SVB failure could have been avoided if the Dodd-Frank regulations weren’t rolled back but said the White House will speak on its stance on the $250,000 deposit insurance limit — which the Federal Deposit Insurance Corp. (FDIC) waived for SVB depositors — “in the next few days.”
The White House is looking at the Warren bill, as well as other regulatory changes, an administration official told The Hill, but wouldn’t say if Biden supports the Massachusetts Democrat’s legislation.
Dozens of Senate and House Democrats have since co-sponsored Warren’s bill, but it will be a non-starter in the GOP-controlled House or face a Republican filibuster in the Senate.
“We appreciate their leadership in putting ideas on the table,” the official said. “The Obama-Biden Administration put in place tough requirements after the 2008 financial crisis to make sure that sort of crisis would not happen again. Unfortunately, the last Administration rolled back some of them. As the President said, Congress and regulators must strengthen rules for larger banks so this doesn’t happen again.”
When Warren ran for the Democratic presidential nomination in 2020 before dropping out and endorsing Biden, the difference between her views and the president’s on issues like regulating banks were on display. Biden, who honed in on messaging that he is a centrist and believes in capitalism, was joined on the debate stages by Warren, who has a long history of fighting back against the practices of banks that she adamantly argues are predatory.
Throughout the Biden administration, Warren has been at odds in particular with Federal Reserve Chair Jerome Powell, an official appointed under Trump but in whom Biden has stressed he has full confidence. She opposed Powell’s nomination in 2018, warning at the time that he would weaken financial regulations, and since then has been his fiercest critic in the Senate and has berated him during various hearings.
Warren called on Powell this week to recuse himself from the internal review of the SVB failure, arguing that his actions “directly contributed” to the situation because the Fed chair has signaled that he would support easing bank regulations.
Powell reportedly pushed to not include a phrase mentioning regulatory failures in a press release on Sunday night that was put out jointly by the Fed, Treasury Department and the FDIC, arguing he wanted to focus instead on the actions being taken. Warren tweeted that the Fed chairman’s “attempt to muzzle” government officials was “completely inappropriate.”
“Congress needs to step in to fix these mistakes before things get even worse,” she added.
Meanwhile, Warren cited Biden specifically calling on Congress to act after the SVB failure for her decision to introduce her legislation.
“President Biden called on Congress to strengthen the rules for banks, and I’m proposing legislation to do just that by repealing the core of Trump’s bank law,” she said in a statement on Tuesday.