TEMPE, Ariz. – Democratic Rep. Ruben Gallego slammed independent Sen. Kyrsten Sinema of Arizona on Tuesday for backing a bank deregulation bill he says contributed to the collapse of Silicon Valley Bank, highlighting Sinema's Wall Street ties as he campaigns for her seat.
The contrast over the 2018 legislation feeds Gallego's push to portray Sinema as a friend of powerful interests, a central theme of the Senate campaign he launched in January.
“It’s not like we received different information. We got the same pitches as all the members of Congress,” Gallego told reporters outside Silicon Valley Bank's offices in Tempe. “But when push came to shove, and the vote came to the floor, I voted to protect Arizona and she voted to protect Wall Street.”
A spokesperson for Sinema, Hannah Hurley, said the senator is not focused on the election and declined to respond to Gallego’s comments.
Sinema on Sunday applauded the Biden administration’s announcement that people who deposited money at the bank would have prompt access to it.
“The federal government must now ensure those responsible are held accountable, while maintaining stability for all Americans who rely on our banking system,” she said in a statement.
How much the regulatory rollback contributed to the Silicon Valley Bank failure is a matter of debate. The Federal Reserve announced Monday it will review its supervision of the bank to understand how it might have better managed its regulation. The Federal Reserve has faced stringent criticism for missing signs the bank was at risk.
Silicon Valley Bank doesn’t have branches in Arizona but has hundreds of employees working from a lakefront office in a Phoenix suburb.
Gallego said he supports the Biden administration's intervention to protect bank customers, adding, “This could have really spiraled out of control.” He said the banking system needs new safeguards for the modern world, where fears can spread quickly through social media and people can respond instantly by moving their money electronically.
A Gallego spokesperson said he will co-sponsor legislation to repeal the 2018 rollback, which was introduced Tuesday by Sen. Elizabeth Warren, D-Mass., and Rep. Katie Porter, D-Calif.
Sinema left the Democratic Party last year after frequently bucking the party and the White House. She has not said whether she will run for reelection in a three-way contest against a Democrat and Republican in one of the most closely watched 2024 Senate races.
Sinema was one of 50 Democrats who voted for the 2018 legislation rolling back provisions of the Dodd-Frank financial regulation measure, which President Barack Obama signed in 2010 in response to the financial crisis that spawned the Great Recession. Gallego voted against it.
The rollback, which was pushed by President Donald Trump with bipartisan support, exempted banks with $100 billion to $250 billion in assets from requirements for regulators to routinely “stress test” them to see how they would fare in tough economic times. At the time, regional banking executives said they needed relief from burdensome oversight to better compete with the industry's biggest players.
Silicon Valley’s CEO, Greg Becker, had lobbied Congress in support of the legislation.
Donors tied to commercial banks have contributed $370,000 to Sinema’s House and Senate campaigns over the past five years, one of her top 20 contributors, according to OpenSecrets, a research group that tracks campaign spending.