Sen. James Lankford of Oklahoma grilled Fed Chair Janet Yellen, demanding to know if Chinese bank depositors would be among those “made whole” by the Federal Reserve in the wake of the Silicon Valley Bank failure.
Lankford specifically asked whether companies directly related to the Chinese Communist Party (CCP) would see their deposits in SVB refunded in full by the US government as part of the rescue.
“What I’m asking,” Lankford said, “is will my banks in Oklahoma pay a special assessment to be able to make Chinese investors whole?”
Yellen answered in the affirmative, saying: “Uninsured investors will be made whole in that bank and I suppose that could include foreign depositors, but I don’t believe there’s any legal basis to discriminate among uninsured depositors.”
[Speaker of the House Kevin McCarthy shared the exchange yesterday.]
Oklahomans won’t just have to pay for Biden’s billionaire bailout—they’ll also be paying for the CCP investors that kept their funds in Silicon Valley and New York banks. pic.twitter.com/CtpdNw7Qis
— Sen. James Lankford (@SenatorLankford) March 16, 2023
“I get it,” Lankford replied, “but I’m just saying my community banks are going to pay this extra fee.”
Lankford prefaced his question by saying that it has “been reported publicly that SVB had a large number of Chinese investors including companies directly connected to the Chinese Communist Party,” before asking “will those companies be made whole based on assessments on my banks in Oklahoma?”
Lankford’s reference to Oklahoma bank assessments goes directly to the Fed’s claim that the rescue package does not hit American taxpayers, but is instead funded wholly by fees charged to banks as part of FDIC insurance.
In the case of Silicon Valley Bank, the FDIC insurance $250K deposit coverage limit was raised to cover deposits of any amount, a cost that Lankford asserts will be passed along to regional banks and ultimately bank customers.
Lankford rejects the explanation that the rescue package takes no money from taxpayers, since the banks funding the rescue — while not individuals — are also taxpaying entities. Lankford says the Fed rescue of SVB means that “every Oklahoman will pay higher fees.”