WYOMING — During a Senate Banking Committee hearing on March 28 exploring the reasons behind recent bank failures, U.S. Senator Cynthia Lummis (R-WY) pushed to exempt Wyoming community banks from any new fees levied to cover the depositors at the recently failed banks.
The collapse of the Silicon Valley Bank (SVB), along with Signature Bank, has been one of the largest bank failures in U.S. history. At the Senate hearing, Senator Lummis pressed Federal Reserve Board Vice Chair for Supervision Michael Barr and Federal Deposit Insurance Corporation (FDIC) Chairman of the Board Marty Gruenberg about exempting Wyoming community banks from footing the bill by complying with heavily burdensome regulations.
According to Senator Lummis, federal regulators had plenty of authority to prevent the SVB collapse but failed to do so. Senator Lummis expressed her concern that Wyoming community banks shouldn’t end up paying for the federal failure through higher assessments from the FDIC.
“Will you exempt community banks from having to pay for this?” Senator Lummis asked Gruenberg multiple times at the hearing.
“The law does give the FDIC authority in implementing that assessment to consider the types of entities that benefit from any action taken or assistance provided,” Gruenberg said after being pressed by Lummis. “I’m suggesting we have some discretion there and we’re gonna consider that issue carefully.”
Gruenberg anticipates the final decision about assessment implementation won’t be made until May, as dictated by legal requirements of this type of rule-making.
