U.S. Sen. JD Vance (R-OH) is espousing the benefits of legislation he has introduced to improve bank supervision and regulation for insured state banks with assets of $100 billion or more.
Vance recently detailed the Bank Failure Prevention Act. Institutions overseen by the Federal Reserve or Federal Deposit Insurance Corporation (FDIC) as their primary federal regulator would instead fall under the jurisdiction of the Office of the Comptroller of the Currency (OCC).
“In the run up to the collapse of Signature Bank and Silicon Valley Bank, federal regulators responsible for overseeing our financial system failed to do their jobs,” Vance said. “It would be reckless and irresponsible for us to sit back and rely on a regulatory regime that has proven itself to be inadequate.”
Vance said the bill would protect consumers and the nation’s financial system by reducing the risk of additional bank failures.
The reclassification would also apply to state-chartered banks which reach or exceed the $100 billion asset threshold in the future. The OCC, unlike the Federal Reserve and FDIC, is focused solely on the supervision and regulation of banks and has a strong track record in preventing bank failures.
Those favoring the legislation maintain the present overlapping regulatory structure lacks clarity and leads to ineffective oversight.