WARREN BLASTS FED, CALLS FOR LIFTING DEPOSIT INSURANCE CAP
Sen. Elizabeth Warren, DMass., on Sunday called on Congress to lift the federal insurance levels for bank deposits above $250,000, a week after the
Biden administration announced it would protect all depositors at Silicon Val- ley Bank, re- gardless of how much money they had in the failing institution.
Currently, the Federal Deposit Insurance Corporation, or FDIC, insures only up to $250,000 in deposits at banks. On CBS’s “Face the Nation,” Warren, a member of the Senate Banking Committee and a commercial and bankruptcy law expert, suggested raising that figure to anywhere from $2 million to $10 million.
“Small businesses need to be able to count on getting their money to make payroll, to pay the utility bills,” she said. “Nonprofits need to be able to do that. These are not folks who can investigate the safety and soundness of their individual banks. That’s the job the regulators are supposed to do.”
Warren, who was among a faction of Democrats who vocally opposed a 2018 law that rolled back key provisions of the 2010 Dodd-Frank Act and weakened bank regulations, said that lifting the FDIC insurance cap would be “a good move” if done in conjunction with tighter regulations on banks.
In another appearance, on ABC’s “This Week,” Warren got more specific, saying she wants Congress to repeal a provision of the 2018 law that had loosened restrictions on banks with $50 billion or more in assets.
“Those are the banks for whom the principal regulator is the Federal Reserve Bank. And those are the banks that took on these risky practices that ultimately have ... blown up at least three banks,” Warren said. “We need tough regulation. If you’ve got more than $50 billion ... you ought to be subjected to stress tests and decent capital requirements and so on.”
A longtime critic of Federal Reserve Chair Jerome H. Powell, Warren also said he should ensure that the Fed pause its campaign to raise interest rates, citing factors such as the war in Ukraine and price gouging. The Fed’s next policy meeting is this Tuesday and Wednesday, with the rate announcement due Wednesday afternoon.
“Raising interest rates doesn’t do anything to solve those problems. All it does ... is put millions of people out of work,” Warren said.