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Some in Washington blame the bank failures on a rollback of landmark banking rules

LEILA FADEL, HOST:

Some Democrats in Washington blame the recent bank failures on a rollback of landmark banking regulations. Those regulations were meant to stop a repeat of the 2008 financial crisis. And this is what Massachusetts Senator Elizabeth Warren said when I asked her about it yesterday.

ELIZABETH WARREN: I warned, this is not going to work. This is not going to end well. And sure enough, we saw the consequences of that over the weekend.

SACHA PFEIFFER, HOST:

Warren was talking about legislation in 2018 that decreased regulations known as Dodd-Frank. That had the effect of giving midsize banks a break. But after the collapse of Silicon Valley Bank and Signature Bank, Warren and other Democrats want to turn back the clock.

FADEL: Carter Dougherty is with the left-leaning advocacy group Americans for Financial Reform. He says that 2018 decision wouldn't have happened without bipartisan support.

CARTER DOUGHERTY: The Senate being what it is, the bank lobby that supported this had to peel off a certain number of Democrats in order to get it through the Senate. And they did succeed in doing that.

FADEL: Sixteen Senate Democrats voted for what was called the Crapo bill, named after its sponsor, GOP Senator Mike Crapo of Idaho.

DOUGHERTY: Money does talk in Washington. There was a significant effort by commercial banks, especially in that 50 to $200 billion size range, that stood to benefit from the deregulation of the legislation.

PFEIFFER: Senator Chris Coons of Delaware was among the Democrats who voted to ease the rules for midsized banks. In a statement to MORNING EDITION, he told us it's not clear whether the old Dodd-Frank regulations would have made a difference. He also said relaxing some of those rules helped many community banks stay in business.

FADEL: Former Democratic Congressman Barney Frank agrees. He's the Frank in Dodd-Frank and a former board member of Signature Bank, which was shut down by regulators over the weekend.

BARNEY FRANK: 2018 didn't say no regulation or weak regulation. It said you wouldn't regulate a bank at 50 billion in assets the same way you would regulate a bank in several trillion. But they retain strong power to regulate.

PFEIFFER: Frank told NPR's All Things Considered that he believes investment in cryptocurrency contributed to Signature Bank's collapse. Frank says by shutting down that bank, regulators in New York were sending a message that, in his words, crypto is toxic. Those are two different narratives on what went wrong, both coming from Democrats. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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SOMOS CONNECTICUT es una iniciativa de Connecticut Public, la emisora local de NPR y PBS del estado, que busca elevar nuestras historias latinas y expandir programación que alza y informa nuestras comunidades latinas locales. Visita CTPublic.org/latino para más reportajes y recursos. Para noticias, suscríbase a nuestro boletín informativo en ctpublic.org/newsletters.

The independent journalism and non-commercial programming you rely on every day is in danger.

If you’re reading this, you believe in trusted journalism and in learning without paywalls. You value access to educational content kids love and enriching cultural programming.

Now all of that is at risk.

Federal funding for public media is under threat and if it goes, the impact to our communities will be devastating.

Together, we can defend it. It’s time to protect what matters.

Your voice has protected public media before. Now, it’s needed again. Learn how you can protect the news and programming you depend on.