Bringing the Discount Window Into the 21st Century Act
Floor Speech
Mr. Speaker, I rise in support of H.R. 3390, the Bringing the Discount Window into the 21st Century Act, sponsored by Representative De La Cruz.
It has been almost 3 years since we saw the dramatic failure of Silicon Valley Bank, Signature Bank, and First Republic Bank, representing the second, third, and fourth largest bank failures in United States history.
Silicon Valley Bank was the fastest bank run ever, with $42 billion of deposits withdrawn on a Thursday and customers trying to pull out another $100 billion the next morning when the bank failed.
Upon learning of Silicon Valley's failure, Ranking Member Waters organized Member briefings with the Treasury Secretary and banking regulators. We encouraged Biden's regulators, led by former Secretary Yellen, to use their emergency tools to mitigate the damage, which they successfully did.
We worked with our former chairman, Mr. McHenry, and launched a bipartisan investigation to conduct oversight and understand what went wrong. We received reports and supervisory documents, and hearings were also held.
Based on the lessons we learned, I and my Democratic colleagues, including Representatives Waters, Sherman, Lynch, Green, Casten, Tlaib, and Pettersen, introduced a wave of commonsense bills to promote safety, soundness, and accountability.
Since then, we have been pushing for action that is long overdue, and I am glad that Chairman Hill agreed to include several of our post- Silicon Valley Bank bills in the housing package.
We have other good reforms for community financial institutions in that packet, but another most critical issue Congress must address is the need to update our deposit insurance framework.
I appreciate that Chairman Hill recently held a hearing on Representative Waters' bill, H.R. 4551, the Employee Paycheck and Small Business Protection Act. We have had a good discussion on the pros and cons of different approaches.
After Silicon Valley Bank's failure, community banks watched small businesses move their deposits to the biggest banks to make sure that they could pay their workers in good times or bad.
There have been at least 37 bank failures since 2007, including a recent one in Oklahoma, that were too small for regulators to use emergency tools, and unlike Silicon Valley Bank's customers, small business depositors lost money through no fault of their own.
Representative Waters' bill would take the data-driven approach that Chairman Hill prefers to study and then update our deposit insurance framework to allow more business payment accounts to be insured based on that research.
This effort has strong bipartisan support, including that of the Vice President and Treasury Secretary, so I hope we can advance those reforms soon for community financial institutions, midsized banks, and small businesses and their workers.
Turning back to the bill that we are considering here, H.R. 3390, I have heard from minority deposit institutions and other community banks about various challenges that they have had in accessing Fed facilities, including the discount window in 2023.
This is a commonsense bill to ensure the Federal Reserve improves its discount window to provide emergency liquidity to banks when they need it.
I appreciate that the chairman and sponsor worked with Representative Waters and Representative Foster to include our amendments to help ensure that we learn how technology may require faster emergency liquidity deployment, as well as understanding barriers like stigma that need to be addressed to improve the functioning of the discount window.
Mr. Speaker, I urge Members to support H.R. 3390, and I reserve the balance of my time.
Mr. Speaker, this bill will help ensure smaller banks can access the Federal discount window when they need it, which may be sooner rather than later, given that Trump's policies are once again raising the threat of another crisis.
Therefore, I urge Members to vote ``yes,'' and I yield back the balance of my time.
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