WASHINGTON – Former President Donald Trump on Monday blamed “wokeness” for the collapse of Silicon Valley Bank rather than the law he signed in 2018 that weakened federal Dodd-Frank regulations on small banks.
Trump boasted a few days after taking office that he would follow the Dodd-Frank Act, which was signed by President Barack Obama in 2010 after the 2008 financial crisis and which forced banks to be more conservative in investing depositors’ money.
“Dodd-Frank is a disaster. We’re going to do big numbers on Dodd-Frank,” Trump said on January 30, 2017, when he signed an executive order requiring the agency to eliminate two regulations for every new one it wants to implement.
Sixteen months later, he signed a bill that exempted regional banks like SVB from many of the Dodd-Frank rules. “They should not be regulated in the same way as complex financial institutions,” he said. “As a candidate, I promised to rescue these community banks from Dodd-Frank, the Dodd-Frank disaster, and now we’re keeping that commitment.”
Even so, Trump in recent times has blamed the “wokeness” of the company. On Sunday and Monday, Trump expanded on his posts suggesting that SVB’s policies on diversity and the environment were behind the bank’s failure.
“The same wakeness that pushed banks to issue subprime mortgages to unqualified buyers and crashed the economy in 2008 has now changed to ESG and DEI and crashed the financial system again in 2023,” read one post by a lawyer and “commie fighter ” Rogan O’Handley shared Trump with his 5 million followers on the social media platform, Truth Social. They share “environmental, social and governance” guidance on socially responsible investment and “diversity, equality and inclusion” considerations in business.
Another post, also by O’Handley and also reposted by Trump, said the federal government’s quick response to bail out all bank depositors was different from its failure to pay residents of East Palestine, Ohio, after a freight train carrying toxic chemicals was released there. “They’re all left for dead. But if you’re a big tech? You’ve got every dollar you need by the end of the week,” O’Handley wrote.
On Monday, Trump defended the 2018 deregulation law, saying banks were being “eaten alive” by regulations. He said the problem now is the Federal Reserve’s interest rate hike. “Interest rates are too high,” he told reporters traveling with him on the plane to a campaign stop in Iowa, according to CBS News political director Fin Gomez. “The rates are too high. And that’s a big problem.”
The increase in interest rates, however, does not seem to have affected the majority of banks, which hedged against them using accepted practices that reduce risk at the cost of reducing profits.
Trump campaign spokesman Steven Cheung, questioned whether Trump bears responsibility for the bank failure because of the 2018 legislation he signed, instead of blaming Democratic President Joe Biden. “This is nothing more than a sad attempt to save the public from accountability,” Cheung said. “The reality is that Biden has presided over a disastrous economy that is hurting Americans every day and causing misery across the country because of his anti-American policies.”
Blaming the “woke” policies and the Biden administration has become the standard Republican response to the bank’s demise. Trump’s eldest son, Donald Trump Jr., claimed there were no bank failures under his father’s watch.
“I don’t remember banks falling under Trump,” he said write in a social media post Sunday.
In fact, 16 banks failed during Trump’s presidency, while SVB was the first bank to fail during Biden’s tenure, according to Federal Deposit Insurance Corp. records.
Trump is under criminal investigation by prosecutors in Georgia and the US Department of Justice for his attempt to overthrow the 2020 presidential election, which culminated on January 6, 2021, in a violent attack on the US Capitol that left four Trump supporters and five police officers dead. and 140 police officers were injured. The DOJ is also investigating Trump for keeping top-secret documents at a Palm Beach country club, and the New York City district attorney is investigating Trump’s $130,000 payment to a porn star in the days before the 2016 presidential election.
However, Trump is running for the GOP presidential nomination in 2024 and has the most polls.