Rep. Sherman outlines package on bank accounting reforms, China risk disclosures and limits on federal involvement in crypto

Representative Brad Sherman used Member Day testimony to detail several legislative proposals aimed at tightening bank accounting and market disclosures and limiting federal exposure to cryptocurrencies.

Sherman said the Bank Safety Act would change how banks treat long‑term securities and address the accounting treatment that he said contributed to recent failures. “This is exactly what Silicon Valley bank did. And that's why we don't have Silicon Valley bank,” he said, describing a practice of treating certain long‑term treasuries as if they had no mark‑to‑market risk for regulatory purposes.

Sherman also described a China Risk Reporting Act to require public companies to disclose risks arising from operations in China and to explain measures to “de‑risk” or decouple operations. He proposed restricting investment in certain sanctioned foreign companies and said index funds that invest through variable interest entities can obscure investors’ exposure to Chinese firms.

On cryptocurrencies, Sherman proposed two measures: the No Crypto Bailout Act, which would bar taxpayer bailouts of crypto firms, and a prohibition on federal investments in crypto assets. “Crypto should not be bailed out by the American taxpayer and we shouldn't use taxpayer money to buy crypto assets,” he said, adding that while Federal Reserve Chair Jerome Powell said he does not seek authority to buy crypto, Treasury does have authority and that is a risk.

Sherman presented the items as part of a package rather than as finalized bills at mark‑up; committee members asked about jurisdictional boundaries and next steps. There were no votes or formal actions during the member‑day hearing.