March 21, 2023

McHenry, Scott ask Fed for oversight info of failed banks

US Capitol buildingHouse Financial Services Committee Chairman Patrick McHenry, R-N.C., and Senate Banking Committee Ranking Member Tim Scott, R-S.C., wrote to Federal Reserve Chairman Jerome Powell Monday requesting that the Fed provide insights into its supervision of Silicon Valley Bank and Signature Bank.

In the letter, McHenry and Scott said their “oversight responsibilities to the American people require that we evaluate the root causes of these bank failures as well as the failures of U.S. regulatory agencies to prevent these collapses from occurring.”

They indicated they are interested in “obtaining full information about what appears to be glaring bank mismanagement, fundamental lack of prudence in bank risk and balance sheet management, and regulators’ lack of basic supervision and enforcement of safety and soundness rules, regulations, and principles” and asked for:

  • a comprehensive timeline of events on the Fed’s lending, supervisory, and examination activity for the past two years related to the banks;
  • a comprehensive timeline of events to support invoking the Systemic Risk Exception for the two banks; and
  • the names and titles of all officials and employees of the Fed involved in any capacity related to the previous points.

McHenry announced last week that the House Financial Services Committee will hold a hearing on the bank failures March 29. He and Ranking Member Maxine Waters, D-Calif., also sent a letter to the Government Accountability Office (GAO) calling on the office to begin a study and an investigation into the Silicon Valley Bank and Signature Bank collapses.

NAFCU, as well as the NCUA, has continued to reiterate that these were not systemic issues and that the credit union industry remains strong.