One of President Biden's top congressional backers fervently denied any politics are being played in the apparent life raft thrown to account holders at Silicon Valley Bank in excess of the standard $250,000 FDIC insured balance – after the California institution failed this week.
House Assistant Democratic Leader James Clyburn of South Carolina told "Your World" the Biden "administration is not bailing out anybody" and is instead trying to "protect everybody," after the president assured depositors their money is still safe.
Clyburn, who has represented the Low Country in Congress since 1993, said that before his venture into politics, he served on the board of regional South Carolina banks that later were absorbed into the nearby Charlotte, N.C.-based Bank of America.
"So I know the banking industry pretty well," he said. "I do believe things have stabilized [after SVB's collapse] thanks to the quick action of the Biden administration to step in to protect not just the banks, but to protect the depositors. And that's the way it ought to be done," he said.
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Clyburn contrasted this week's actions following SVB's failure to that of the George W. Bush administration and Congress following the 2008 collapse of Bear Stearns, Lehman Brothers and other financial institutions.
"We (Congress) basically stepped in to bail out the banks [in 2008]. This administration is not bailing out anybody," he said. "You know what they are doing and the way they're doing it is to protect everybody."
Host Neil Cavuto pressed Clyburn on the claim, pointing out Biden is "bailing out people with FDIC backing; limitless… setting a precedent here that calls for protecting investors out fully or depositors out fully."
Cavuto noted if the new apparent standard is played out with more and more collapsed banks in the future, it could become overly expensive.
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Clyburn agreed to the excessive expense, but reiterated he does not consider what happened to SVB a bailout. Congress gets involved in a bailout, Clyburn argued; with SVB, a process "was put in place with the FDIC [who is] there in order to protect the banks – and those depositors are being protected."
The lawmaker also noted the FDIC insurance threshold was once $50,000, and suggested the current $250,000 threshold should also be lifted based upon the "times within which we live."
When asked whether the expanded FDIC protection given to an institution with a "90%-plus give to Democrats" meant that critics could see politics injected into the response, Clyburn assured that the administration would've acted similarly if the collapsed institution was Republican-leaning – noting that many of the community banks he supports in South Carolina lean red.
"When you protect depositors, I don't get worried about that. I get a little bit worried when the depositors lose all their money and their bank executives and board members and the investors get made whole," he said.
