House Plans First Hearing on SVB, Signature Bank Failures

On March 29, House Financial Services Committee Chairman Patrick McHenry, R-N.C., and ranking member Maxine Waters, D-Calif., plan to hold the first of "multiple" hearings on the failures of Silicon Valley Bank and Signature Bank.

Those testifying include Martin Gruenberg, chairman of the Federal Deposit Insurance Corp., Board of Directors, and Michael Barr, vice chair for Supervision at the Federal Reserve Board.

McHenry and Waters also sent a letter Monday to the Government and Accountability Office calling on the office to begin an "immediate" study and an investigation into the recent collapse of the two banks.

Specifically, "GAO should focus on examining the factors that led to potential mismanagement at Silicon Valley Bank and Signature Bank; the changing conditions and analyses that occurred between March 10 and 12; any regulatory, supervisory or examination failures in the Federal Reserve System (Fed) and the Federal Deposit Insurance Corporation (FDIC)," the lawmakers state in a letter.

"The competency and qualifications of supervisory management and personnel should be included in this review," they added.

"Separately, GAO should examine the decisions and actions taken by the FDIC, the Fed, and the Secretary of the Treasury surrounding the recent bank failures, enhanced prudential standards, and systemic risks," McHenry and Waters wrote.

Also on Monday, McHenry and Sen. Tim Scott, R-S.C., ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, demanded information from the Federal Reserve and the FDIC regarding their regulatory activities with respect to the two banks "for the two years leading up" to the collapse.

The lawmakers also requested that the Fed and FDIC "preserve all records, future and existing, related to this matter."

"Our 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," McHenry and Scott wrote. "These responsibilities include 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."

House Financial Services Committee Chair Patrick McHenry, R-N.C. (Photo: House)