Regulator Failures Caused Bank Collapse & Police Union Executive Busted As Drug Ring Leader

Regulators were warned in 2018 that the Silicon Valley Bank was the highest risk bank in the country, with more than 90% of their deposits NOT insured. In spite of that warning, regulators did absolutely nothing, leading to the recent collapse. Also, a police union executive has been arrested for running a massive drug smuggling operation out of her home for the past 8 years, sending drugs all over the country by disguising them as wedding gifts and candy. Mike Papantonio & Farron Cousins discuss more.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Regulators were warned in 2018 that Silicon Valley Bank was the highest risk bank in the country with more than 90% of their deposits not insured. In spite of that warning, regulators did nothing, nothing. Five years, five years they had to know this is a disaster. But they did nothing to stop this collapse. Right?

They were sitting on a document, these regulators, Congress, everybody who voted to deregulate that literally told them Silicon Valley Bank has the most uninsured deposits. So basically the highest risk out of every bank in the country, this one has screwed the pooch and it will screw up again. And they said, well, we're gonna do it anyway.

What information did they have, Farron? What were the important signs that say, okay, first of all, Trump leads the charge to undo Dodd-Frank. Okay. During his administration. Biden comes in office, has two years to fix it and doesn't fix it at all. Not only doesn't fix it, but doesn't add new regulators to say, look, Dodd-Frank is not there to protect us. Dodd-Frank said that a bank needed to have $250 million worth of cushion. Now it was dropped to 50 million for mid-size banks. Trump did that. Biden did nothing about it. What's your take?

And Silicon Valley Bank had 90% of their total deposits, so 90% of the so-called money held in this bank was uninsured, which meant they were most prone to having a run on the bank and running out of cash after, you know, 10% of the money had been withdrawn. They would be left with nothing. And then you have everyone else losing all of their money because it's not FDIC regulated.

Right. Okay. So here's the problem. You have, say you have $50,000 in the bank. You say, well I've got insurance for 250,000. It doesn't mean anything because it's, once the bank goes, everybody goes. And there's no way to get that. You're not safe because of that $250,000. I don't know why people think that. But in this situation you might ultimately get it back. But it's gonna be a fight. And if you need that money to live, it's gonna be a big fight. But listen, here's, as I was looking at this story, I was thinking back to the story you and I did when there was a failure to prosecute after the bank burn down, two oh what, 2008, right?

Yeah.

And there was no, nobody was prosecuted. I remember Obama ran on the ticket to where I'm gonna throw some people in jail, we're gonna stop all this. He puts Eric Holder in charge of Attorney General. Nobody goes to prison. Nobody is even indicted. Whereas you can, you control, it's almost like, it doesn't make any sense. But you look at, back at with Ronald Reagan. Ronald Reagan of all people, he put, he indicts 800 bankers. Most of them go to prison for the SNL crisis. This is no different.

Yeah.

What was happening there is the, it's almost a reflection exactly. I'm interested to see what this administration does.

Yeah. Really. And that's such a good thing and you and I have a brought that up in the past too. Like, as bad as Reagan was.

Oh, he was terrible.

At least we got bankers in jail. It was big on the news. You had all these people in these nice suits walking out in handcuffs. And that's what we have to have again, because guess what, you had a little time there where the banks weren't doing all this illegal activity, doing all this risky gambling with our money, but time forgives. Clinton came in with his deregulation. Bush took it even further and it just has snowballed from there.

Well, that's right. I mean, when Clinton came in with his deregulation, that kind of opened the door, didn't it?