Barney Frank Signature Bank Board Member Pushed to Ease Financial Regulations

Former congressman and co-sponsor of the Dodd-Frank bill says there is no evidence the change enabled bank’s failure. By Julie Bykowicz Updated March 13, 2023 at 6:27 pm ET

Barney Frank, who has earned more than $2.4 million in compensation from Signature Bank since 2015, rejected the idea that the regulatory change abetted Signature’s collapse.

“Nobody has shown me any evidence of systemic or other kinds of fraud that would have been prevented” without the 2018 rollback, Mr. Frank said.

Lifting the threshold, Mr. Frank said, was a good change that “saved smaller banks a lot of paperwork.” Mr. Frank said that as early as 2013 he began talking publicly about the need to change it, predating his employment with Signature Bank.

Jeff Hauser, who analyzes corporate influence on government for the Revolving Door Project, a progressive group in Washington, said Mr. Frank’s position with Signature Bank after years of working on banking regulation was “a classic case of having your cake and eating it, too.”

“Democrats like to develop story lines about institutions it is supposedly OK to revolve into,” Mr. Hauser said. “It always comes back to bite.”

Both Signature Bank and Silicon Valley Bank, which failed and was taken over by regulators Friday, have close ties to policy makers.

As a board member of Signature Bank, former Rep. Barney Frank has earned more than $2.4 million in compensation.Photo: Anna Moneymaker/Getty Images

Mary Miller, a former Treasury official under former President Barack Obama, has been on SVB’s board since 2015. “Her investment and regulatory knowledge as well as cultural alignment will enable Mary to add unique perspective and insight,” the board’s chairman at the time said in the announcement of her appointment.

Ms. Miller couldn’t be reached for comment.

The bank’s president and chief executive officer, Greg Becker, was on the board of directors at the Federal Reserve Bank of San Francisco until Friday, and was one of its three finance executives.

All seven of Silicon Valley Bank’s registered lobbyists last year previously held government positions, according to public records. Signature Bank didn’t employ registered lobbyists last year, the records show.

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During the lobbying push ahead of the 2018 legislation, Signature Bank retained former Sen. Al D’Amato (R., N.Y.) and his firm, records show.

Mr. Frank joined Signature Bank’s board in 2015, about two years after retiring from Congress. Mr. Frank’s long government career and “distinguished expertise in financial services” will be an asset to the bank, the board’s then-chair wrote at the time.

He didn’t register as a lobbyist, but appeared frequently on television and in opinion pieces and newspaper articles to weigh in on the 2018 plan to roll back pieces of his namesake bill.

He told The Wall Street Journal in 2017 that the $50 billion threshold in Dodd-Frank was “arbitrary” and “seemed like a much bigger number” than it was.

And in a March 2018 op-ed for CNBC, he wrote that the limit was “a mistake” and that a higher amount—he suggested $100 billion—“could in fact provide a more competitive environment, lessening, even marginally, the foundation of the mega banks.”

Lawmakers including Sen. Tom Carp (D., Del.) and then-Sen. Heidi Heitkamp, a North Dakota Democrat, cited Mr. Frank’s assessment as a reason they felt comfortable voting for the bill.

Andrew Ackerman contributed to this article.

Write to Julie Bykowicz at [email protected]

Corrections & Amplifications Jeff Hauser works for the Revolving Door Project, a progressive group in Washington. An earlier version of this article incorrectly said Mr. Hauser’s employer was the Center for Economic and Policy Research. In addition, Barney Frank’s surname was spelled incorrectly as Franks in one instance. (Corrected on March 13)

The Collapse of Silicon Valley Bank: Your Next Steps

The Collapse of Silicon Valley Bank: What You Need to Know

By Julie Bykowicz Updated March 13, 2023 at 6:27 pm ET

The abrupt collapse of the Silicon Valley Bank, the second-biggest bank failure in U.S. history, prompted regulators to impose emergency measures to stem the fallout. WSJ’s Rachel Ensign explains how the crisis unfolded and what could happen next. Photo: Preston Gannaway for The Wall Street Journal

The 2010 Dodd-Frank legislation set tougher regulatory safeguards on banks with more than $50 billion in assets. After leaving office and joining Signature’s board, Mr. Frank, a Massachusetts Democrat, publicly advocated for easing those new standards for smaller banks.

Part of what former President Donald Trump signed into law in 2018 raised the asset threshold to $250 billion, meaning Signature and other regional banks no longer needed to comply with the extra regulation set out in Dodd-Frank.

After the bill was signed, New York-based Signature more than doubled in size to $110 billion in assets, and $88.6 billion in deposits as of the end of 2022. The stricter requirements, had they been in place, might have prompted bank executives and their overseers to move more quickly to place the lender on sounder financial footing, some industry observers say.