FACT SHEET: “President Biden Urges Regulators to Reverse Trump Administration Weakening of Common-Sense Safeguards and Supervision for Large Regional Banks…As the President said when his administration announced actions to stabilize the banking system, he is committed to “continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.” The Obama-Biden Administration put in place strong requirements – primarily through the Dodd-Frank Act and subsequent regulations and supervision – to reduce the risk of future banking crises. Unfortunately, Trump Administration regulators weakened many important common-sense requirements and supervision for large regional banks like Silicon Valley Bank and Signature Bank, whose recent failure led to contagion.The President believes that the weakening of common-sense bank safeguards and supervision during the Trump Administration for large regional banks should be reversed in order to strengthen the banking system and protect American jobs and small businesses. Specifically, the President urges the federal banking agencies, in consultation with the Treasury Department, to consider a set of reforms that will reduce the risk of future banking crises, including:
- Reinstating rules that were rolled back in the previous Administration for banks with assets between $100 and $250 billion, including:
- Liquidity requirements and enhanced liquidity stress testing.
- Annual supervisory capital stress tests.
- Comprehensive resolution plans (also known as “living wills”).
- Strong capital requirements for banks, at an appropriate time after a considerable transition period…”