SVB Failure Gives California Senate Contenders a Chance to Bash Banks

Karen Breslau
·2 min read
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(Bloomberg) -- Adam Schiff wants to go after banker pay for failed lenders.

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His House colleague Katie Porter plans to introduce a bill to reverse the Trump-era rollback of bank regulations passed after the 2008 financial crisis.

Not to be outdone, Representative Barbara Lee is touting her voting record against deregulating Wall Street in 2018.

Banking has suddenly emerged as a hot-button issue for California politicians after the rapid implosion of Silicon Valley Bank and anxiety over San Francisco-based First Republic Bank and other lenders. It’s particularly relevant for Democrats Schiff, Porter and Lee, who are competing for the US Senate seat to be vacated next year by Dianne Feinstein.

In California, where registered Democrats outnumber Republicans by two to one, bashing the GOP and the Trump administration for de-regulating banks so they could take “reckless risks,” as Porter charged in a tweet, is a politically safe bet. None of their proposed measures are likely to find support in a Republican-led Congress. But the quick calls for action point to how banking is again becoming a divisive electoral issue.

Republicans are pushing their own claims about SVB, blaming the bank’s collapse on “woke” policies. “This bank, they’re so concerned with DEI and politics and all kinds of stuff,” Florida Governor Ron DeSantis, a likely Trump challenger for the GOP nomination in 2024, told Fox News, referring to diversity, equity and inclusion. “I think that really diverted from them focusing on their core mission.”

With the SVB blame game accelerating, there are few voices in Washington — or California — urging moderation, though one is House Republican Dusty Johnson of South Dakota.

“At some point we need to do an after action review but let’s not jump to add burdens that prevent community banks from serving their customers,” Johnson said in an interview. “The executives are going to punished and the depositors are going to be spared.”

The California representatives are striving to win a coveted Senate seat that Feinstein has held since 1992, and each are outspoken critics of Donald Trump.

See also: Feinstein’s Senate Seat Is Glittering Prize With a Record Cost

Schiff led the first impeachment of the former president in 2020. Porter, who captured a GOP-held district in Orange County, is an economic populist who gained attention on social media for her feisty interrogations of Trump administration appointees and corporate executives. Lee was one of 10 Democrats who sued Trump, his attorney Rudy Giuliani and extremist groups for inciting the Jan. 6, 2021, attack on the US Capitol.

--With assistance from Erik Wasson.

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