Missourians shouldn’t have to pay for the failure of two banks in California and New York, an animated Sen. Josh Hawley tells The Heartlander.
The Biden administration this week announced “special assessments” on banks nationwide to cover losses in the Federal Deposit Insurance Corporation – which, in an unprecedented and ominous move, is covering even uninsured depositor losses at Silicon Valley Bank in California and Signature Bank in New York.
Normally, only deposits of up to $250,000 are insured.
Calling the failure of SVP in California the apparent result of “stupid management,” Hawley, along with Sen. Mike Braun R-Indiana, responded to the FDIC’s move by filing the Protecting Consumers from Bailouts Act – which would, according to Hawley:
- Prohibit banks from passing on to customers the cost of any “special assessment” by the FDIC
- Prevent the FDIC from levying “special assessments” on community banks to pay for bailing out the uninsured depositors of failing banks
- Allow the FDIC to claw back bonuses paid to executives of failed banks
Asked by The Heartlander what should happen in this banking crisis, Hawley replied with what shouldn’t.
“I tell you what should not happen is, Missouri workers shouldn’t be on the hook to pay for the California billionaires,” he said. “There’s no way we should be paying for a bailout, but that’s what Biden wants to do. He wants to force everybody in Missouri who has a checking account – which is every working person – to have to pay fees and taxes to bail out the Californians.
“I’m totally opposed to that. So I’ve introduced legislation that would stop it: no bailout for the California tech billionaires who, by the way, just happen to also be big-time Democrat donors. I mean, how do you think they got their bailout? It’s because they’re well-connected politically. So let’s stop that, and let’s protect community banks.”
It’s those smaller community banks Hawley thinks the nation should be thinking about.
“I’m really worried that community banks across our state are shutting down. We’re going to be left with just three or four national banks, who will no doubt pursue all kinds of crazy woke policies (and) won’t make loans to people in our state who need them.
“I think we need to stop the nationalization, and we need to protect community banks.”
Even liberal-leaning media are asking questions about whether Biden’s bank bailout – announced Sunday in a joint statement by the Department of the Treasury, the Federal Reserve and FDIC – will put all the nation’s depositors on the hook for future bank failures, even if the cause is stupid management, as Hawley puts it; woke policies that prioritize left-wing sensibilities over fiscal stability; or even corruption.
“Will the FDIC’s move to cover uninsured deposits set a risky precedent?” asks a headline at National Public Radio. The bailout, NPR notes, “has renewed a huge debate over government intervention in the banking industry and has raised questions over how the FDIC will operate moving forward should other banks run into trouble.”
The Biden administration’s statement that “no losses associated with the resolution of Silicon Valley Bank (or Signature Bank) will be borne by the taxpayer” may be technically accurate, but not wholly true: Bank customers, most of whom are indeed taxpayers, will likely bear the cost of the bailout.
Moreover, “Saying that the taxpayer won’t pay anything ignores the fact that providing insurance to somebody who didn’t pay for insurance is a gift,” Forbes quotes University of Chicago economics professorAnil Kashyap.
As Hawley noted about Missourians, Oklahoma banks “are about to pay a special fee to be able to bail out millionaires in San Francisco,” Sen. James Lankford, R-Oklahoma, said on the Senate floor.