It remains to be seen if tariffs will work out.

0:00 Speaker 1 Sunday Morning with us today is former Congressman Bonnie Frank, and he was one important guy and still is a good guy. He was served as the chairman of the House Financial Services Committee from two thousand and seven to twenty eleven and the leading co sponsor of the Dodd Frank Act, which was one of the most important I

0:25 guess financial accent in the country. Congressman, last week or the week before, we had Nick. A.

0:36 Speaker 1 Kramer on, and he was brought up Signature Banked, and Signature Bank you were very close to. I don’t remember if you were on the board or if you were a consultant to them, but you were on the board.

0:52 In the fact is that a lot of things happened to Signature Bank that maybe should not have happened, and it was done because of politics, and they’re trying to get down to the bottom of it. Well, Congressman Bonnie Frank, well, what would you say?

1:10 Speaker 2 True? The first part of the problem here was that the Federal Deposit Insurance Corporation, Mister Gruenbahm, who was ahead of it, and I was very frustrated by this, never understood the role of commercial residential lending in New York Takingture Bank, and it is one of the reasons I was so proud to be there, which was one of

1:36 the leading lenders for multifamily buildings in New York City. And obviously by now people understand the housing crisis. I felt frustrated for while trying to get people to focus on it, but they were telling us that we were doing too much lending for a residential building. Now I understand that lending for commercial buildings became problematic with COVID.

2:04 People were not working at the office, et cetera, and it became the case you could you could work from home, so you didn’t need the office, but nobody ever suggested that you could live at work. You continue to need places to live, and they were retarding us from increasing the supply of housing. And the I knows, well, what

2:25 if you made these loans and then events go down, I said, hollow Willia, if French were to go down to New York, there would be a lot of happiness. But I’m afraid it’s not going to happen anyway. That had that was a factor. The next thing that comes in Signature Bank under the leadership of Scott Jay with

2:45 FAMIN boards aided by the CEO, Joseph Hollo. We were pioneers in a form of dealing with crypto. Crypto. I know it’s controversial. When there were people washed my then it’s not as secure in some other words, but what our executive developed was very smart. And in fact, one of the guys I know who runs an international banking

3:12 over it is that he the one who would invite me to speak in various Asian countries because they were so interested in what was happening in New York. We said we were remother pioneers. What we had was thinking to us, we did not ourselves accept cryptos deposits with lending crypto. We did not ourselves be on crypto. On

3:31 the other hand, that there were two companies, well maybe individual there were customers of our banks and they wanted to deal with each other in crypto. We facilitated. That’s one of the functions of the bank to help with commercial transactions, and we were being very successful. We were not at risk because we were not ourselves up taking

3:56 on the obligations. The crypto went up and down, it didn’t at us, but we were playing an important role here. What that happens is that one of the leading national banks that talking crypto, that lengthing crypto. UH. Silicon Valley Bank went under because of the problems of the volacility of crypto. I believe I’m not an expert in that,

4:23 but what that then led to was this, UH. I think there always people in the five administrators who were very skeptical of crypto. UH. They were looking to, I think, discourage banks from getting too involved in the whole crypto currency.

4:46 And again I stressed our BOBS was almost new for us for the value of crypto. We were simply facilitating payment that two other willing parties wanted to make to each other. So when Silicon Valley Bank closed, the fact that we were one of the most prominent banks in the crypto sphere made them think they had to look

5:10 at us. And we had a short term pleasing. The kind of lending we were doing for mortgages we had there was not always going to be a quitty issue in a very short period of time, but we were completely solving and part of it was I think that with the combination of the FDI c undervaluing the stability

5:40 alone for multi family residential Again, it was incredible to me that was housing a national priority. Every tilling we were doing too much residential.

5:51 Speaker 1 No, I understand. I think it was you’re exactly very You’re right about it, and that the fact is that Nick Kramer, have you seen the article? Have you talked to him at all?

6:08 Speaker 2 Yeah? I thought it was well. He had two arguments. One boy that they having closed two banks that people in California understandably nobody used to see a bank in their area closed down. They wanted the Federal Reserves to step in and use emergency powers, which ironically I helped pive them in the God’s Rank till that you mentioned,

6:36 and in the we did not want to have a situation in which individual banks could could be be singled out and surported when it was no general problem. So the law said that for them to use this emergency bailout provision, they had to be at least three banks.

6:54 And I guess what what Carter was saying was they only had two.

6:58 Speaker 1 Banks, and you know, and then and Nancy that he blamed Nancy Pelosi, if I remember correctly, because she had the West Coast Point Bank that she’s trying to bail out, but she needed two additional banks, and she they arbitrarily picked the First Republic in New York, which was I thought it was a good bank, and they picked a

7:20 signature to be able to make the uh uh the cut of three banks.

7:26 Speaker 2 It wasn’t just Pelosi, I mean because she as her own district is of course Champran Disco very New Silicon Valley bank and in this area. But it was a lot of Californians. And you know, it’s a little ironic because I was the one who said, you can’t just do one bank. There’s a problem of favoritism. On the

7:48 other hand, we never said that they should ort to be some New York for banks that they could throw into the pot because the otherwise wouldn’t have enough for the soup.

7:56 Speaker 1 And it looks like that’s what they did. Are you were you familiar with First Republic’s.

8:06 Speaker 2 Not familiar with their situation? Obviously I am with Art. It was it was a two steps John. The first thing needed to find another bank, and then we got put on the shopping box. And I said, because of our involvement with crypto uh illogically, because there was nothing about our facilitating crypto transactions between two other parties that

8:32 anyway took side to that dispute. But so I was not aware of the California pressure. I can understand it. That’s the one of these members of Congress do was instituted there in the district. But picking visual picking array to others just to make three. Uh, that’s not the spirit of our law. And even if you’re picking others,

8:56 we were clearly picked in part because the FBI. He did not and still I hope he’s changed. Understand that residents resident shown loans, loans for multi family residences are very solid.

9:12 Speaker 1 Their mission. Their mission was to get three banks so they can so they can bail out everybody at the same time. Uh. And and now is their mission, I believe.

9:23 Speaker 2 Right Well, they couldn’t bail out just one. They had to be view was they had to be three. If it’s a particular bank would badly run. Well, you didn’t want that to be the responsibility of the government.

9:39 Speaker 1 Bonnie, we’re out of time, but I want to talk to you more and I look forward to talking you again real soon.

9:46 Speaker 2 But John, I’m always glad to do that, so call at any time.

9:49 Speaker 1 Bonnie, Thank you so much, and look forward to having lunch again real soon. And and God bless you, and God bless America.