Photo: Minh Nguyen

Republicans doing the bidding of Wall Street for years led to the current banking crisis.

In 2018, Republicans led an effort, lobbied heavily by the financial industry, that resulted in a law, signed by former President Donald Trump, that gutted the Dodd-Frank Wall Street Reform and Consumer Protection Act’s risk assessment safeguards for midsize banks.

The effort, led by House Financial Services Committee Chair Patrick McHenry, gave federal agencies discretion in regulation, which paved the way for banks such as Silicon Valley Bank to take huge risks beyond their means without fear of real federal consequences, according to Accountable.US, a financial watchdog group.

“Chairman McHenry and fellow conservatives in the pocket of the financial industry rammed through a law that weakened Congressional oversight of midsize banks and pawned off responsibility to a Trump-appointed regulator who they knew shared their loyalties to Wall Street special interests,” said Liz Zelnick, director of economic Security and corporate power for Accountable.US.

In the aftermath of SVB and Signature Bank collapse, at least 10 economic experts have called the collapse “a 100 percent avoidable problem,” blaming weakened banking regulations for “allowing banks like SVB and Signature to increase deposits” in the absence of Stress tests, Zelnick said.

At hearings on the SVB collapse, Republicans on the Senate Banking and House Financial Services committees scolded federal regulators while denying their regulation busting efforts had no effect.

If McHenry was serious about “getting to the bottom” of what happened there would be testimony from the former Trump official that ran wild with deregulation of banks such as SVB thanks to McHenry’s own Dodd-Frank rollback bill, she said.

Once again, Republicans are trying to rewrite history and cover up their wrongdoing.