Opinion: Gov. Gavin Newsom’s shady ties to failed Silicon Valley Bank
One unnoticed aspect of the failure of Silicon Valley Bank is the change to California law in 2020 that increased political control of state-chartered financial institutions.
Don’t take my word for it. Straight from the horse’s mouth is this “background” from the website of the Department of Financial Protection and Innovation : The change occurred with the enactment of Assembly Bill 1864 and Assembly Bill 107, signed into law by the governor in September 2020. The new DFPI retained the powers of the previous agency and added a “consumer outreach team engaging vulnerable populations,” and “an Office of Financial Technology Innovation that will engage with new industries and consumer advocates to encourage consumer friendly innovation and job creation in California.
This adds up to a formula for greater political control of financial institutions in California. It means the regulatory terrorism familiar to so many other businesses in the state could now be applied to banks that failed to meet certain goals of “encouraging” innovation or “engaging” identified communities.
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