President Donald Trump celebrates with lawmakers after signing the Economic Growth, Regulatory Relief and Consumer Protection Act at the White House on May 24, 2018.
WASHINGTON ― Former President Donald Trump on Monday blamed “vigilance” for the collapse of Silicon Valley Bank, not the law he signed in 2018 that gutted federal Dodd-Frank regulations on smaller banks.
Trump boasted days after taking office that he would follow the Dodd-Frank Act, which was signed by President Barack Obama in 2010 after the 2008 financial crisis and which forced banks to be more conservative in investing the money of its depositors.
“Dodd-Frank is a disaster. We’re going to be dealing a lot with Dodd-Frank,” Trump said on Jan. 30, 2017, when he signed an executive order requiring agencies to eliminate two regulations for every new one they want to implement.
Sixteen months later, he signed a bill that exempted regional banks like SVB from many Dodd-Frank rules. “They should not be regulated in the same way as large, complex financial institutions,” he said. “As a candidate, I promised that we would save these community banks from Dodd-Frank, the Dodd-Frank disaster, and now we’re keeping that commitment.”
However, in recent days, Trump has blamed corporate “vigilance.” On Sunday and Monday, Trump expanded on posts alleging that SVB’s diversity and environmental policies were behind the bank’s bankruptcy. (BuzzFeed, HuffPost’s parent company, banked with SVB.)
“The same awakening that caused banks to hand out subprime mortgages to unqualified buyers and crashed the economy in 2008 has now been renamed ESG and DEI and is crashing our financial system again in 2023,” reads one post by a lawyer and “warrior of commies” Rogan O’Handley, which Trump shared with his 5 million followers on his social media platform Truth Social. He was referring to the ‘environmental, social and governance’ guidelines for socially responsible investing and ‘diversity, equity and inclusion’ considerations in business.
Another post, also by O’Handley and also reposted by Trump, said the federal government’s quick response to guarantee all bank depositors contrasted with its failure to pay residents of East Palestine, Ohio, after a freight train carrying toxic chemicals, derail there. “They are all left to die. But if you’re a big techie? You get every dollar you need in just one weekend,” O’Handley wrote.
On Monday, Trump defended the 2018 deregulation law, claiming banks were being “eaten alive” by regulations. He said the issue now is the Federal Reserve raising interest rates. “Interest rates are too high,” he told reporters traveling with him on a flight to a campaign stop in Iowa, according to CBS News political director Finn Gomez. “The prices are very high. And that’s a big problem.”
However, the rise in interest rates does not seem to have affected the majority of banks, which are hedging against them using accepted practices that reduce risk at the cost of reducing profits.
Trump campaign spokesman Steven Cheung, asked if Trump bore any responsibility for the bank failure because of the 2018 law he signed, instead blamed Democratic President Joe Biden. “This is nothing more than a sad attempt to inflame the public to avoid responsibility,” Cheung said. “The fact is that Biden has presided over a disastrous economy that has devastated ordinary Americans and caused misery across the country because of his anti-American policies.”
Blaming the “woke” cops and the Biden administration has become a standard Republican response to the bank’s demise. Trump’s eldest son, Donald Trump Jr., claims there have been no bank failures under his father’s watch.
“I don’t remember banks collapsing under Trump,” he said wrote in a social media post on Sunday.
In fact, 16 banks failed during Trump’s presidency, while SVB was the first bank to fail during Biden’s tenure, according to Federal Deposit Insurance Corp. records.
Trump is under criminal investigation by Georgia prosecutors and the U.S. Department of Justice for his attempts to overturn the 2020 presidential election, which culminated in the violent attack on the Capitol on January 6, 2021, that left four supporters dead. Trump and five police officers and 140 police officers were injured. The Justice Department is also investigating Trump for keeping top-secret documents at his Palm Beach country club, and a New York district attorney is investigating Trump’s secret $130,000 payment to a porn star in the days leading up to the 2016 presidential election.
However, Trump is running for the Republican Party’s presidential nomination in 2024 and is leading in most polls.