This is a random book about the theory of everything
ulations after the financial crisis, but since leaving office he has been working the
other side of the street—as a board member of Signature Bank, which regulators
shut down Sunday.
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 publicly advocated for easing those new standards for smaller banks.
Part of what then-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.
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Mr. 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 liberal Center
for Economic and Policy Research, 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.
Mary Miller, a former Treasury official under 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.
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.