Sen. Elizabeth Warren said the Senate is making a mistake allowing a bill to move forward that would ease regulations on regional banks, warning it could lead to another financial crisis.
Warren, D-Mass., said on CNN’s “State of the Union” the bill puts the country at a greater risk of the government being forced to bail out more banks.
“It puts us at much greater — puts us at greater risk that — that there will be another taxpayer bailout, that there will be another crash and another taxpayer bailout. And you don’t have to take my word for it, this is what the Congressional Budget Office says,” she said.
The bill is intended to help regional banks, such as Birmingham, Ala.-based Regions Bank and Cincinnati-headquartered Fifth Third Bank, by making Federal Reserve oversight less burdensome for banks with less than $250 billion in assets, up from $50 billion now. Banks under that threshold would get some relief from the annual stress tests conducted by the Fed, as well as other requirements.
The bill, authored by Senate Banking Committee chairman Mike Crapo, R-Idaho, enjoys the support of about a third of the Democratic caucus. The legislation’s supporters advertise the legislation as regulatory relief for small banks and regional banks, but not for Wall Street megabanks.
Warren said treating these banks as if they are local community banks is missing the point.
“These 25 banks together sucked down more than $50 billion in taxpayer bailouts. Why? Because the economy needed them to stay up and running,” she said. “Nobody went to jail. And this bill says, let’s let those 25 banks be regulated just like they were tiny little community banks.”
