When Silicon Valley Bank was bailed out, regulators made a point of bailing out the billionaires, many of them shareholders in the bank, even though their accounts exceeded FDIC limits.
It turns out that they they did nothing to protect the funding of hundreds of affordable housing projects that the bank was involved with, because bailouts are only there for rich people:
When federal banking regulators bailed out Silicon Valley Bank’s wealthy depositors and gave its new owner a $17 billion discount, it turns out they offered no such rescue to another group impacted by the bank’s historic collapse: low-income communities to whom it had promised billions in lending.
Banking regulators told The Lever this week that “these pledges ended with the failure of the bank,” evaporating an expected source of affordable mortgage and small-business loans in California. The move could leave thousands of planned Bay Area affordable housing units in jeopardy at a time when a quarter of area residents are struggling to afford basic necessities, and halted a $10 million program to increase homeownership in communities of color.
Those pledges were made as part of an $11 billion community benefits agreement signed by Silicon Valley Bank, or SVB, ahead of a major merger in 2021. Progressive lawmakers and financial reform groups had urged regulators to preserve the agreement as a condition of SVB’s sale to First Citizens Bank & Trust Company, but no such terms were included in the deal they ultimately struck.
“Federal regulators missed an opportunity to show the American public that they work in their best interest, and not in the interests of banks,” said Paulina Gonzalez-Brito, executive director of the California Reinvestment Coalition (CRC), which collected 22,000 signatures on a petition calling on regulators to enforce the agreement, one of the most comprehensive negotiated to date with a major bank.
Ms. Gonzalez-Brito misses the point, the regulators did not miss an opportunity to, "Show the American public that they work in their best interest, and not in the interests of banks," they TOOK the opportunity to show the banks that they work in the banks best interest, and not in the interest of the American public.
Banking regulators are thoroughly captured by the industry.
1 comments :
And when they bailed out those billionaires, they did it at the expense of the survivability of the FDIC itself. If (when) we got hit by a large round of additional bank runs, the FDIC will have that much less in the kitty to help it survive.
We will live in interesting times. I'm going to polish up my Jimmy Stewart impersonation.
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