Rep. Maxine Waters: ‘What Are We Going to Do About the Uninsured from Now on?’

(CNSNews.com) – Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, said Monday that the federal government should be commended for how it protected both insured and uninsured depositors of the failed Silicon Valley Bank.

“Let me tell you, in examining as much as I can what has taken place, listening to the briefings that one I put together with FDIC, talking with the feds, with [Fed Chair Jerome] Powell, talking with [Treasury Secretary Janet] Yellen over at the Treasury [Department], what I know is this that the Silicon Valley Bank was a go-to bank for start-ups. Basically no other bank would support them,” Waters told MSNBC’s “The Reidout.”

“For the most part many I think the traditional banks didn’t understand this innovation and all that the start-ups were trying to get funding for, and so it’s like not only did they support the start-ups, they might have taken too much risk in doing it,” she said.  

“In addition to that, you have to understand when we talk about regulation and deregulation, et cetera, the financial services and banking community is interested in the bottom line,” the congresswoman said.

“So they’re always going to be advocating for what they think will get the most money for them and take care of the customers that they want to serve, and so those of us who sit in the positions like the financial services committee, we have to be about regulation. We have to make sure we’re protecting the people of this country,” she said.

“We have to make sure that we’re watching the SEC, for example, our cop on the block, and so we have been in a struggle, and we will always be in a struggle, because their mission is a lot different from ours, and so you have this bank that was a go-to bank, that was supporting all of these start-ups, et cetera, and I don’t know how they missed looking at their balance sheets to see what was going on, and of course, when they actually understood, I suppose, what was going on, it was too late to borrow money,” Waters said. 

“It was too late to sell securities, and so here we have a bank that collapsed, and in that collapse, it forced this government to have to come to grips with we had a real problem and we had to do something fast,” the congresswoman said.

“We should be, the government should be complemented in the way that they put together protecting the depositors, both those that are insured, those that were not insured, how we were able to protect jobs and how we were able to get those payrolls done so that these owners of these small tech companies could pay their staffs, etc.,” she said.

“We did a miraculous job, and we need to thank our agencies for doing that. We have new questions that we have to deal with. For example, what are we going to do about the uninsured from now on? We know that the bank had 90% uninsured. We have to deal with that,” Waters said. 

 The congresswoman said that reports that Silicon Valley Bank’s CEO dumped millions in stock is “a serious thing, and we must be concerned about it, and we’re not bailing out the banks.”

“We are really taking care of our depositors, both again, insured and uninsured, and banks that have done, you know, suspicious things or things that perhaps already are in violation of regulation of laws are going to have to be accountable. They’re going to have to be accountable for what they have done,” she said.

Host Joy Reid pointed out that former Rep. Barney Frank (D-Mass), one of the congressmen behind the Dodd-Frank Wall Street Reform and Consumer Protection Act, reportedly supported weakening some banking regulations then left to join the board of Signature Bank, which failed on Sunday.

“Is that an issue where you have members of Congress who understand the regulatory process and then going out into the private sector and joining these organizations on their boards and then supporting weakening the regulations?” Reid asked.

“Well, you know, I think we have looked add those issues somewhat. we need to look at them in depth and determine whether or not we’re going to do, and these instances like we’ve done in saying you can’t lobby for a certain length of time,” Waters said.

“I think that those issues are worth looking at Signature Bank has closed down and I think that may happen with a few other banks, but I’m looking at Signature to see how much crypto was involved there, because we have to know what role did crypto play in any of this,” the congresswoman said.

“So we have a lot to explore, a lot to investigate, a lot to understand. [Rep. Patrick] McHenry and I are– we’re getting together. We’re going to have a hearing as quickly as we can, and we’re going to try to work in a bipartisan way because we have to make sure that we are concerned continuously still about contagion.  We don’t know a lot of stuff still out there, and so we have work to do,” she said.

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