President Donald Trump celebrates with lawmakers after signing the Economic Growth, Regulatory Relief, and Consumer Protection Act at the White House on May 24, 2018.
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 gutted the Dodd-Frank federal regulations on smaller banks.
Trump bragged within days of taking office that he would go after 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 their depositors’ money.
“Dodd-Frank is a disaster. We’re going to be doing a big number on Dodd-Frank,” Trump said on Jan. 30, 2017, as he signed an executive order requiring that agencies eliminate two regulations for each new one they wanted to implement.
Sixteen months later, he signed a bill that freed regional banks like SVB from many Dodd-Frank rules. “They shouldn’t be regulated the same way as the large, complex financial institutions,” he said. “As a candidate, I pledged that we would rescue these community banks from Dodd-Frank, the disaster of Dodd-Frank, and now we are keeping that commitment.”
Despite this, Trump in recent days has been blaming corporate “wokeness.” On Sunday and Monday, Trump amplified posts claiming that SVB’s policies regarding diversity and environmentalism were behind the bank’s failure. (BuzzFeed, HuffPost’s parent company, banked with SVB.)
“The same wokeness that pushed banks to dish out subprime mortgages to unqualified buyers and crashed the economy in 2008 has now rebranded as ESG and DEI and is crashing our financial system again in 2023,” read one post by lawyer and “commie fighter” Rogan O’Handley that Trump shared with his 5 million followers on his social media platform, Truth Social. He was referring to “environmental, social and governance” guides on socially responsible investing and to “diversity, equity and inclusion” considerations in business.
Another post, also by O’Handley and also reposted by Trump, said the federal government’s swift response to guarantee all the banks depositors contrasts with its failure to pay residents of East Palestine, Ohio, after a freight train carrying toxic chemicals derailed there. “They’re all left to die. But if you’re big tech? You get every dollar you need in a single weekend,” O’Handley wrote.
On Monday, Trump defended the 2018 deregulation law, claiming the banks were getting “eaten alive” by regulations. He said the problem now was the Federal Reserve’s interest rate increases. “Interest rates are too high,” he told reporters traveling with him on a flight to a campaign stop in Iowa, according to CBS News’ political director, Fin Gomez. “Rates are very high. And that’s a big problem.”
The interest rate hikes, however, do not appear 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 spokesperson Steven Cheung, asked whether Trump bore any responsibility for the bank failure because of the 2018 law he signed, instead blamed Democratic President Joe Biden. “This is nothing more than a sad attempt to gaslight the public to evade responsibility,” Cheung said. “The fact is that Biden has presided over a catastrophic economy that has devastated everyday Americans and has caused misery across the country due to his anti-America policies.”
Blaming “woke” polices and the Biden administration have become standard Republican responses to the bank’s demise. Trump’s eldest son, Donald Trump Jr., claimed there had been no bank failures under his father’s watch.
“I don’t remember banks collapsing under Trump,” he wrote 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 U.S. Justice Department for his attempts to overturn the 2020 presidential election, which culminated in the Jan. 6, 2021, violent assault on the U.S. Capitol that left four Trump supporters and five police officers dead and 140 police officers wounded. The DOJ is also investigating Trump for retaining top-secret documents at his Palm Beach country club, and a New York City district attorney is probing Trump’s $130,000 hush money payment to a porn star in the days before the 2016 presidential election.
Trump is, nevertheless, running for the GOP presidential nomination in 2024 and is leading in most polls.