Barney Frank, the former congressman from Massachusetts who helped design the landmark banking safety legislation after the 2008 economic crisis, defended his involvement with the now-defunct Signature Bank, which was taken over by New York state officials this week.
“I worked as a member of Congress for a certain objective,” Frank said in an interview with the Financial Times. “And then having retired, not having a pension by my choice, not wanting to be a lobbyist for reasons personal, I need to make some money.”
Frank joined the board of the bank in 2015, two years after he left Congress, and has made about $2 million in the role, according to the Financial Times. His career was capped by the Dodd-Frank regulation package that placed new restrictions on banks in the aftermath of the 2008 meltdown.
But Signature Bank was seized by state regulators after the failure of Silicon Valley Bank last week. Officials took over the bank after customers flocked to the firm to withdraw their money following the historic fall of Silicon Valley Bank. Officials seized the firm amidst the bank run “in order to protect depositors.”
Frank told the Financial Times that he was disappointed that the bank was closed. “Obviously people will say, ‘Oh, hey mister, you told everybody else how to run a bank and the bank you were helping run failed,’” Frank said.
Frank has drawn particular scrutiny for publicly calling to increase the $50 billion threshold for banks receiving increased regulatory oversight during debate on changes to Dodd-Frank in 2018, a change that would have directly impacted Signature.
The state-chartered commercial bank had more than $110 billion in assets and nearly $89 billion in deposits as of the end of last year, according to the New York Department of Financial Services. While many of the deposits at the bank were uninsured by the Federal Deposit Insurance Corporation’s $250,000 threshold, the Biden administration moved to backstop all uninsured deposits at the bank.
The bank was deeply entwined with cryptocurrencies, and suffered when rising interest rates hit cryptocurrency values. Frank told The Block, a cryptocurrency news outlet that state regulators wanted to “send the message that crypto is toxic.”