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A bill introduced earlier this week by U.S. Rep. Monica De La Cruz that would require financial officials to appear before Congress has been rolled into a financial reform bill, which passed out of committee on Thursday, according to a news release.
On Monday, De La Cruz announced that she introduced the Banking Regulator Accountability Act, which would mandate the heads of each federal banking agency to testify twice a year before the House Financial Services and the Senate Banking, Housing and Urban Affairs committees.
De La Cruz is a member of the Financial Services Committee.
As of today, only the Federal Reserve’s vice chair for supervision is required to testify before Congress once a year, according to a news release.
De La Cruz’s legislation would require the Comptroller of the Currency, the Federal Deposit Insurance Corporation chairman and the National Credit Union Administration chairman to appear before Congress regularly.
The bill would also expand reporting requirements for federal banking agencies relating to supervision activities, including providing confidential reports to the chair and ranking member of the House Financial Services and Senate Banking committees.
This bill, however, has since been rolled into the Increasing Financial Regulatory Accountability and Transparency Act, which is a financial reform package led by U.S. Rep. Andy Barr, R-Kentucky.
Both De La Cruz and Barr referenced recent bank failures as the reason for the legislation.
In March, the Silicon Valley Bank collapsed, which the Federal Reserve said was a result of poor management, weak regulations, a lack of staff oversight while adding that the banking industry is in need of stricter policing to prevent future failures, the Associated Press reported.
Signature Bank from New York also collapsed in March and First Republic Bank, another bank from California, failed in May, according to the Federal Deposit Insurance Corporation — the government entity that insures financial institutions.
“As evidenced by the recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank, federal regulators missed opportunities to monitor the health of these institutions and hold them to the standards set by law,” De La Cruz said in a news release. “It put the assets of millions of Americans at risk and brought unnecessary fear to Americans. Accountability is a two-way street. Not only should the leaders of these banks be accountable for their failures, but the regulators charged with overseeing these institutions should also answer to Congress.
“That is why I introduced the Banking Regulator Accountability Act — because the American people deserve answers.”
Barr said the failures of bank supervisors contributed to the largest bank failures in modern American history.
“Simply put, bank supervisors were asleep at the switch, despite having all the tools necessary to prevent these banks from collapsing,” Barr said in the release. “These common sense reforms take meaningful steps to increase Congressional oversight of bank supervisors to ensure they are effectively performing their function and to ensure the stability in our banking system going forward.”