Greg Becker, President and CEO of Silicon Valley Bank (SVB), speaks through the Milken Institute Global Conference on May 3, 2022 in Beverly Hills, California.
Patrick T. Fallon | AFP | Getty Images
Before Silicon Valley Bank’s failure, its former CEO Greg Becker backed two tech industry lobbying groups that attempted to influence the Dodd-Frank financial reform law and pushed to chop corporate taxes, in keeping with records reviewed by CNBC.
Within the buildup to the bank’s collapse, Becker chaired a bunch called TechNet and was a board member of the Silicon Valley Leadership Group, two trade organizations which have lobbied government officials on a spread of issues tied to the firm. Becker stepped down as chairman of TechNet at the beginning of the 12 months but remained on the group’s executive council until Monday, when he resigned.
Each trade organizations included Silicon Valley Bank as a member before its failure, in keeping with archived versions of their web sites. Current members of each organizations include tech giants Google, Amazon, Meta, and Apple.
SVB collapsed under pressure after customers withdrew a staggering $42 billion last week. Days after the bank was forced to shut on Friday, regulators backstopped SVB customer deposits as a part of multiple moves to contain the damage from its failure. Regulators later appointed Tim Mayopoulos to run SVB.
The lobbying by trade groups linked to Becker and SVB adds to a string of efforts to influence policy that has drawn lawmakers’ attention because the bank failed. Some members of Congress have sought more information on the practices that left the bank vulnerable and its push to chip away at regulations, together with Becker’s sale of greater than $3 million in stock in late February.
Senate Banking Committee member Sen. Elizabeth Warren, D-Mass., sent a letter to the banking executive asking him to “describe the total scope of your efforts to roll back Dodd-Frank regulations in Congress.” Warren and other lawmakers are actually pointing to the bank’s failure as justification to tighten safeguards across the financial industry, including by rolling back a 2018 law that loosened Dodd-Frank rules.
When Becker led TechNet, the group piled money into shaping federal policy — including pieces of Dodd Frank. The organization has spent greater than $2 million because the start of 2020 on lobbying Congress, in keeping with its lobbying disclosure reports.
TechNet spent $1.84 million last 12 months on 20 in-house and external lobbyists, probably the most it invested in lobbying since 2005, in keeping with data from the nonpartisan watchdog OpenSecrets. The trade group had vast coffers to attract from: it brought in greater than $4.2 million in membership dues in 2020, in keeping with its most up-to-date financial disclosure form filed to the Internal Revenue Service.
TechNet focused its lobbying, partly, on “Section 1033 of the Dodd-Frank Consumer Protection Act,” in keeping with its disclosure reports. The group engaged with House and Senate lawmakers, in addition to Consumer Financial Protection Bureau officials, on the supply related to consumer disclosures, records show.
Steve Kidera, a spokesman for TechNet, told CNBC that the group’s “disclosed lobbying on Section 1033 was a consumer data privacy issue related to the announced notice of proposed rulemaking on the CFPB on data privacy, certainly one of our industry’s top policy issues.”
Section 1033 was established under the sweeping financial reform laws, which former President Barack Obama signed into law after the 2008 financial crisis.
The CFPB says it’s “within the means of writing regulations to implement” section 1033 which might require financial institutions corresponding to Silicon Valley Bank to “make available to consumers, upon request, transaction data and other information concerning a consumer financial services or products that the buyer obtains from the covered entity.”
Though the lobbying disclosures don’t explain whether TechNet supports or opposes section 1033 as written, the organization clearly desires to have a say in how the rule is implemented.
The group’s 2023 policy principles say it wants to determine a “robust consumer data throughout a Section 1033 rulemaking that promotes the free flow of consumer authorized data across the financial ecosystem.” TechNet added that it supports “a versatile, consent-based framework for notifying consumers of how their information will probably be shared, transmitted, stored, and utilized.”
The opposite trade organization for which Becker held a board seat has reached into its own deep pockets to influence policy. The Silicon Valley Leadership Group in 2020 raised $1.3 million in contributions and brought in an extra $2.9 million through membership dues, in keeping with the records filed to the IRS.
Its 2021 records, which were provided to CNBC by the organization after an inquiry, shows they brought in almost the identical amount in membership dues that 12 months. The group raised over $940,000 through contributions in 2021, in keeping with the records.
The organization boasts on its website that it “supported comprehensive corporate tax reform, including lowering the company income tax rate and moving toward a hybrid/territorial international tax system.”
The company tax rate most recently dropped in 2017. Former President Donald Trump signed GOP tax cuts into law, cutting the speed to 21% from 35%.
Laura Wilkinson, a spokeswoman for Silicon Valley Leadership Group, told CNBC that Silicon Valley Bank executives were a part of their group’s coalition of dozens of member corporations that met with House and Senate lawmakers in 2017 on Capitol Hill to advocate for cutting the company tax rate.
“We’re focused on strengthening competitiveness by fighting for a good business tax system on the local, state, and federal levels,” Wilkinson said. “In 2017, this included joining the broad coalition of major street businesses and innovation leaders that advocated for a less complicated and fairer tax system as a part of comprehensive tax reform to support economic growth and American jobs.”
Federal records show that the Silicon Valley Bank Leadership Group has not filed lobbying disclosure reports since 2009.
Becker was chairman of the Silicon Valley Leadership Group from 2014 through 2017, in keeping with an archived version of his SVB bio page. Becker couldn’t be reached for comment.
SVB and Becker back Democrats
Whilst it pursued policy goals that sometimes clashed with Democrats’ priorities, SVB and Becker often gave money to the party’s candidates for office.
Becker’s only federal donation within the 2022 election cycle went to Senate Majority Leader Chuck Schumer, D-N.Y., in keeping with Federal Election Commission filings. Schumer is giving the contributions his campaign received from each Becker and the bank’s PAC to charities.
Since 2011, the 12 months Becker became CEO and president of SVB, its political motion committee has given the vast majority of its donations in each election cycle to Democrats, in keeping with OpenSecrets. The exception got here in 2012, when Republicans maintained control of the House whilst Obama won reelection.
Senate Banking Committee member Sen. Mark Warner, D-Va., also received contributions from Becker. Warner received $11,400 from the ex-bank CEO over the course of the 2020 and 2022 election cycles, in keeping with Federal Election Commission records. Sen. Jon Tester, D-Mont., received $3,000 from the bank’s PAC in 2017, in keeping with FEC records.
Becker also hosted Warner for a fundraiser in 2016 at his California home, in keeping with an invite to the gathering. Representatives for each Warner and Tester is not going to say whether or not they plan to donate any of the funds they received from Becker or the bank’s PAC.
The veteran lawmakers voted for the 2018 law that rolled back pieces of Dodd Frank.
The bill they backed reclassified the “too big to fail” standard under Dodd Frank, which got here with enhanced regulatory scrutiny. By raising the regulatory threshold for banks from $50 billion in assets to $250 billion, medium-size banks were exempted from those regulations. Becker, in testimony he submitted to a Senate panel in 2015, made a similar call for his and other medium sized banks to be exempt from the Dodd Frank regulations.
The Federal Deposit Insurance Corporation, which helped form the protections for SVB depositors, said before the bank closed that the corporate had roughly $209 billion in total assets — which might have made it subject to those rules before 2018.