OKLAHOMA CITY (July 24, 2023) – Attorney General Gentner Drummond is leading a coalition of nine attorneys general urging the Federal Deposit Insurance Corporation (FDIC) to reverse course on its proposed rule to impose a special assessment on banking organizations. The would-be rule is an effort to recover the costs of bailing out elite depositors like venture capitalists and foreign nationals at Silicon Valley Bank (SVB) and Signature Bank.
Drummond said President Biden and the federal government’s decision to invoke the systemic risk exception of the Federal Deposit Insurance Act for the bailout was arbitrary and reckless.
“The banking industry and the public at-large should not be forced to subsidize the federal government’s own mishandling of a crisis of their creation,” Drummond wrote in a letter sent July 21 to FDIC Chairman Martin Gruenberg. “It is fundamentally unfair to pass on special assessment costs to other banking institutions who engaged in responsible business practices, unlike SVB and Signature.”
Drummond noted that the assessment would ultimately be paid by average Americans.
“The Proposed Rule will also burden the entire banking industry, as well as American taxpayers who will ultimately bear the brunt of the special assessment fees,” Drummond wrote. “The special assessment may not be directly levied against them, but those costs will ultimately be passed on to taxpayers.”
The coalition is urging the federal government to re-evaluate its actions and correct course to improve the banking industry moving forward. If the FDIC is unwilling to reverse course, Drummond said, at a minimum, the special assessment should be shouldered only by the firms and entities directly responsible for, or benefitting from, the bailout.
Oklahoma’s letter was joined by Idaho, Louisiana, Mississippi, South Carolina, South Dakota, Tennessee, Texas and Utah.
Read the full letter here at https://www.oag.ok.gov/sites/g/files/gmc766/f/documents/2023/2023-07-21_...