Influential lobbying groups representing Silicon Valley Bank, the company whose abrupt collapse has sparked banking crisis fears, fought a proposal to increase payments into an insurance fund that the government is tapping into so it can safeguard customer deposits.
Federal regulators said on Sunday the government would make sure SVB depositors"have access to all of their money" and that any losses to the Deposit Insurance Fund, a group under the Federal Deposit Insurance Corporation insuring depositors, will be recovered by a special assessment on banks. Bank lobbying groups mobilized in 2022 against an FDIC proposal to increase insurance premiums for the fund, records show.
"Numerous other enhancements to prudential standards have encouraged banks to strengthen their balance sheets and risk management," the groups wrote in a letter at the time to James P. Sheesley, the FDIC's assistant executive secretary."The proposed increase would unduly burden banks and may harm the broader economy."
Nevertheless, the FDIC approved its proposal in October, according to a press release. When the groups sought to influence the FDIC, its insurance fund maintained under $126 billion and had a reserve ratio that was not in lockstep with federal law. In 2022, SVB spent $200,000 lobbying on banking issues related to"innovation and technology," according to disclosures. Its CEO, Greg Becker, notably urged the Senate in 2015 to exempt SVB and other financial institutions from regulations approved on the heels of the 2008 financial crisis.
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