(SNews) – Democrat former Rep. Barney Frank (D-MA) was a member of the board at the collapsed Signature bank.
As Slay News reported, New York-based Signature was shut down by regulators on Sunday in the wake of the Silicon Valley Bank (SVB) collapse on Friday.
Now it has emerged that the former Democrat congressman, author of the 2010 Dodd-Frank bill, was a board member at the imploded bank.
In a joint statement on Sunday, the U.S. Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) announced the plan to manage the fallout of SVB’s collapse as well as the demise of Signature Bank.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” the joint statement read.
“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” it added.
“All depositors of this institution will be made whole.
“As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
*Signature Bank has been closed
*All depositors of Silicon Valley Bank and Signature Bank will be fully protected
*Shareholders and certain unsecured debtholders will not be protected
*New Fed 13(3) facility announced with $25 billion from ESF to backstop bank deposits pic.twitter.com/LKipIRMg1T
— Nick Timiraos (@NickTimiraos) March 12, 2023
SVB collapsed last Friday after depositors rushed to withdraw money in fear of its impending fall.
It was the 16th largest bank in the country its implosion marked the second-largest U.S. bank collapse in history.
According to Fox Business, Signature Bank became “popular among crypto companies” and provided “deposit services for its clients’ digital assets but did not make loans collateralized by them.”
Prior to the SVB collapse, Signature said it had been trying to limit such deposits.
The bank promised that it was in a “well-diversified financial position” and had “limited digital-asset related deposit balances in the wake of industry developments.”
“We want to make it clear again that Signature Bank is a well-diversified, full-service commercial bank with more than two decades of history and solid performance serving middle market businesses,” Joseph J. DePaolo, Signature Bank Co-founder and Chief Executive Officer said in a statement.
“We have built a strong reputation serving commercial clients through nine business lines and reached in excess of $100 billion in assets by continually executing our single-point-of-contact, relationship-based model where banking teams are capable of meeting all client needs,” he added.
Frank, who sat on Signature Bank’s board, strongly supported legislation in 2018 that curtailed some of the regulations that his own law Dodd-Frank put in place.
The bank that was just closed, Signature Bank, is the one that Barney Frank joined after retiring from Congress pic.twitter.com/25TNEFn3GK
— Lee Fang (@lhfang) March 12, 2023
“Dodd-Frank imposed additional regulatory safeguards on banks with more than $50 billion in assets, but the rollback that passed this week, among other things, raises that threshold to $250 billion,” the Washington Post reported in 2018.
“Signature Bank has more than $40 billion in assets and can now grow significantly without automatically facing additional regulation,” the report added.
“Frank has served on Signature’s board for three years and has received more than $1 million in payments from the bank during that time.”
Former Rep. Barney Frank (D-MA) endorsed changes to his own Dodd-Frank law in 2018 that freed mid-sized banks from undergoing stress tests. He sits on Signature Bank's board, which just collapsed.
I reached him via phone tonight and he declined to comment https://t.co/JY77rtNkHt
— Joseph Zeballos-Roig (@josephzeballos) March 13, 2023