Two senior aides to House Speaker Kevin McCarthy were among the top lobbyists for the bank at the center of a new financial crisis.

by Ken Klippenstein, The Intercept

After successfully lobbying for the rollback of new rules applied to Wall Street in the wake of the financial crisis, lobbyists for Silicon Valley Bank immediately began pressing their case further to the federal authority that insures bank deposits in the event of another crisis, according to lobbying disclosures reviewed by The Intercept. The lobbying effort managed to exempt banks the size of Silicon Valley Bank from more stringent regulations, including stress tests aimed at uncovering the type of weaknesses that led to the bank’s implosion Friday. Two of the bank’s top lobbyists previously served as senior staffers for House Speaker Kevin McCarthy, who himself pushed for the repeal of significant pieces of the landmark Wall Street reform legislation known as Dodd-Frank.

The meltdown of Silicon Valley Bank represents the second-largest bank collapse in American history and the first since the 2008 financial crisis. Over 90 percent of the bank’s deposits exceed the amount federally guaranteed by the Federal Deposit Insurance Corporation, meaning that those people may either never see their money again or lose substantial amounts.

Silicon Valley Bank headquarters and branch; Silicon Valley Bank, a subsidiary of SVB Financial Group, is a U.S.-based high-tech commercial bank

Silicon Valley Bank President Greg Becker himself pushed for weaker banking regulations, telling Congress to lift “enhanced prudential standards … given the low risk profile of our activities,” as The Lever reported.

A chief culprit, economists say, is legislation President Donald Trump signed into law in 2018, which rolled back key parts of the Dodd-Frank banking regulations passed in the wake of the 2008 financial crisis. That 2018 legislation, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, passed with strong support from the Republican Party and critical support from some Democrats. Among those leading the charge was McCarthy, then House majority leader.

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