U.S. Sens. Sherrod Brown (D-OH) and J.D. Vance (R-OH) are advocating on behalf of the state’s regional banks in the wake of the Silicon Valley Bank and Signature Bank failures.
Brown, chairman of the Senate Banking, Housing, and Urban Affairs Committee, and Vance recently forwarded correspondence to Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg regarding the FDIC recovering the costs of protecting depositors and promoting confidence in the banking system via a special assessment on the banking industry.
“While the FDIC’s proposed special assessment does not apply to most community banks, it does impact some Main Street-focused regional banks,” the legislators wrote. “Regional banks in Ohio play a critical role in the strength of our local, state, and regional economies. They use deposits to fund mortgages and affordable housing developments, lend to small businesses, and invest in their communities. Ohio regional banks, unlike Silicon Valley Bank, also have more traditional business models and a significantly smaller proportion of uninsured deposits, certain of which are also less likely to “run” in a crisis.”
The lawmakers have encouraged the FDIC to focus on the types of uninsured deposits that were at the greatest run risk during the recent turmoil and tailor the special assessment to those deposits.