GOP Senate Banking Committee Member Accuses Fed of Political Bias, Seeks Accountability After SVB Collapse

At the opening of a U.S. Senate Banking Committee hearing, a Republican member of the committee sharply criticized the Federal Reserve, saying the central bank had become susceptible to political pressure and had misplaced emphasis on climate-related finance instead of bank supervision.

The lawmaker said the Fed’s membership in the Network for Greening the Financial System and recent changes in that engagement amounted to “flip flopping” and signaled political influence over an institution that should be independent. “The Federal Reserve is supposed to be an independent institution free from politics,” the Republican member said.

The speaker tied that critique to the March failure of Silicon Valley Bank, calling it the third-largest bank failure in U.S. history and faulting regulators for a lack of accountability. “How is it that no bank supervisor has faced any consequences with 30 MRAs and MRIAs that never had timely action at SVB,” the member asked, calling the situation “egregious failures.” The lawmaker noted that the FDIC had filed a lawsuit against bank executives.

The committee member also criticized federal economic policy under President Joe Biden, describing price increases during his tenure and citing figures from the remarks: “overall prices rose by over 20%,” energy prices by 34%, transportation costs by 31% and groceries by 22%. The speaker said “two-thirds of Americans have less than a thousand dollars in their savings accounts.”

Praising the Trump administration’s economic record, the lawmaker said, “In the first three years of his presidency, President Trump built the most inclusive economy ever — 7,000,000 jobs created and two-thirds went to women, African Americans and Hispanics.”

Turning to bank regulation, the member warned that the Basel III “end game” proposal had forced banks to shore up capital and constrained lending to small, local businesses. “As a ranking member of this committee, I have consistently argued that Basel III end game proposal will raise costs and limit credit access for hardworking Americans,” the speaker said. The lawmaker said uncertainty around Basel III had led banks to “put capital on the sidelines,” reducing credit availability.

The speaker also alleged that regulators had pressured banks to cut services to cryptocurrency firms, political figures and ‘‘conservative-aligned businesses and individuals,’’ saying that such treatment went “against the principles of fairness and market access.”

The Republican member concluded by saying, “Now as chairman, I plan to work to rectify the issues of the Biden administration,” and expressed interest in hearing from Federal Reserve Chair Jerome H. Powell on the Fed’s plans and “right sizing the financial regulatory framework.” The remarks closed as the committee proceeded to call on Ranking Member Warren.

The statements reported here are a summary of the opening remarks made at the committee hearing; the transcript attributes the quoted passages to a Republican member of the U.S. Senate Banking Committee.