Business

Silicon Valley Lawmaker Explores Legislation After Bank Collapse

Two weeks after Silicon Valley Bank’s collapse left thousands of businesses reeling, one Silicon Valley lawmaker is exploring legislation to ensure it doesn’t happen again. At a discussion in Santa Clara on Saturday with nonprofit and business leaders, Congressman Ro Khanna announced he’s crafting legislation that would require banks to pay higher premiums to the Federal Deposit Insurance Corporation (FDIC) to protect all account holders — including those with funds higher than $250,000. The revenue would protect deposits in case of a collapse.

Published

1 year ago

April 3, 2023

Oakland Post

Congressman Ro Khanna announced he's crafting legislation that would require banks to pay higher premiums to the Federal Deposit Insurance Corporation (FDIC) to protect all account holders.

By Jana Kadah
San Jose Spotlight

Two weeks after Silicon Valley Bank’s collapse left thousands of businesses reeling, one Silicon Valley lawmaker is exploring legislation to ensure it doesn’t happen again.

At a discussion in Santa Clara on Saturday with nonprofit and business leaders, Congressman Ro Khanna announced he’s crafting legislation that would require banks to pay higher premiums to the Federal Deposit Insurance Corporation (FDIC) to protect all account holders — including those with funds higher than $250,000. The revenue would protect deposits in case of a collapse.

“I think (this legislation) is promising if I can get a Republican to sign on,” Khanna told San Jose Spotlight. “Right now, you basically have large accounts acting as uninsured drivers. The government ends up covering them if they fail, but they’re not paying for the insurance beyond $250,000, so we need to have some fees and some insurance.”

Financial regulators abruptly closed Silicon Valley Bank on March 10 after uncertainty about its solvency led to a massive bank run. The bank’s failure is the second largest in U.S. history and SVB reportedly held $209 billion in assets at the time of its collapse.

The closure sent a wave of panic among thousands of tech businesses, nonprofits and startups that questioned how they’d make payroll and keep their doors open without access to their funds.

The Federal Reserve Board said all depositors at Silicon Valley Bank could access their money the following Monday — three days after the collapse — including funds beyond the $250,000 insurance cap. The announcement led to lines wrapping around the bank’s headquarters in Santa Clara with anxious account holders waiting to pull their money.

Still, two weeks later, many business leaders are apprehensive about the future.

Marie Bernard, CEO of homeless prevention nonprofit Sunnyvale Community Services, said she’s worried about a SVB loan taken out to pay for her nonprofit’s new office. If the loan falters, the nonprofit will be forced to foot the bill and cut back services like rent relief and food for needy residents. She’s relieved the nonprofit’s $1 million in the bank is safe.

“We still don’t know what’s going on with the loan (for the new office space),” Bernard said at the Saturday discussion. “We’re on pins and needles until we can either raise the remaining money for the mortgage, or we find that we can potentially refinance.”

Austin Sendek, co-founder and CEO of climate-tech startup Aionics, Inc, which uses artificial intelligence to find environmental solutions, said climate-tech businesses like his struggle to get investments.

“Climate tech is already seen as a somewhat risky investment, so when you get those investment dollars in your bank account, you want to protect them,” Sendek said. “We’re (also) going into a macro-economic environment where venture capital seems to be sort of becoming a little bit harder to come by.”

Without protection from the FDIC, Sendek said a generation of climate-tech startups in the region would be wiped out financially and struggle to secure future investments.

Nico Pinkowski, CEO of Nitricity Inc — a startup that transforms water, air and solar into nitrogen fertilizer — said now that he’s made payroll and vendor payments, his biggest worry is how SVB’s failure may impact other regional banks. Deposits at small U.S. banks dropped dramatically in the week following the collapse of Silicon Valley Bank on March 10, data by the Federal Reserve showed.

He said climate-tech companies like his survive because of the flexibility regional banks can provide.

“We need these banks to continue to be there and we need to rebuild trust,” Pinkowski said. “Any and all ways the government can support rebuilding of trust makes ultimately a very large difference for companies like ours.”

Khanna said Americans should feel confident in the U.S. banking industry. In the last 10 years, 73 banks have failed and the depositors at all of them were made whole, he said. In response to criticism that the government is bailing out billionaires, Khanna said SVB’s situation is different from the 2008 financial crisis because the protection is for small businesses, nonprofits and tech startups — not bank executives and shareholders.

“(This wasn’t) just bailing out the rich people in Silicon Valley,” Khanna said. “These were the climate tech startups. These were the startups at biotech. And these were a lot of organizations that were actually serving the community.”

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State Controller Malia Cohen Keynote Speaker at S.F. Wealth Conference

California State Controller Malia Cohen delivered the keynote speech to over 50 business women at the Black Wealth Brunch held on March 28 at the War Memorial and Performing Arts Center at 301 Van Ness Ave. in San Francisco. The Enterprising Women Networking SF Chapter of the American Business Women’s Association (ABWA) hosted the Green Room event to launch its platform designed to close the racial wealth gap in Black and Brown communities.

Published

5 days ago

April 20, 2024

Oakland Post

American Business Women’s Association Vice President Velma Landers, left, with California State Controller Malia Cohen (center), and ABWA President LaRonda Smith at the Enterprising Women Networking SF Chapter of the ABWA at the Black Wealth Brunch.

By Carla Thomas

The Enterprising Women Networking SF Chapter of the American Business Women’s Association (ABWA) hosted the Green Room event to launch its platform designed to close the racial wealth gap in Black and Brown communities.

“Our goal is to educate Black and Brown families in the masses about financial wellness, wealth building, and how to protect and preserve wealth,” said ABWA San Francisco Chapter President LaRonda Smith.

ABWA’s mission is to bring together businesswomen of diverse occupations and provide opportunities for them to help themselves and others grow personally and professionally through leadership, education, networking support, and national recognition.

“This day is about recognizing influential women, hearing from an accomplished woman as our keynote speaker and allowing women to come together as powerful people,” said ABWA SF Chapter Vice President Velma Landers.

More than 60 attendees dined on the culinary delights of Chef Sharon Lee of The Spot catering, which included a full soul food brunch of skewered shrimp, chicken, blackened salmon, and mac and cheese.

Cohen discussed the many economic disparities women and people of color face. From pay equity to financial literacy, Cohen shared not only statistics, but was excited about a new solution in motion which entailed partnering with Californians for Financial Education.

“I want everyone to reach their full potential,” she said. “Just a few weeks ago in Sacramento, I partnered with an organization, Californians for Financial Education.

“We gathered 990 signatures and submitted it to the [California] Secretary of State to get an initiative on the ballot that guarantees personal finance courses for every public school kid in the state of California.

“Every California student deserves an equal opportunity to learn about filing taxes, interest rates, budgets, and understanding the impact of credit scores. The way we begin to do that is to teach it,” Cohen said.

By equipping students with information, Cohen hopes to close the financial wealth gap, and give everyone an opportunity to reach their full financial potential. “They have to first be equipped with the information and education is the key. Then all we need are opportunities to step into spaces and places of power.”

Cohen went on to share that in her own upbringing, she was not guided on financial principles that could jump start her finances. “Communities of color don’t have the same information and I don’t know about you, but I did not grow up listening to my parents discussing their assets, their investments, and diversifying their portfolio. This is the kind of nomenclature and language we are trying to introduce to our future generations so we can pivot from a life of poverty so we can pivot away and never return to poverty.”

Cohen urged audience members to pass the initiative on the November 2024 ballot.

“When we come together as women, uplift women, and support women, we all win. By networking and learning together, we can continue to build generational wealth,” said Landers. “Passing a powerful initiative will ensure the next generation of California students will be empowered to make more informed financial decisions, decisions that will last them a lifetime.”

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Black Business Summit Focuses on Equity, Access and Data

The California African American Chamber of Commerce hosted its second annual “State of the California African American Economy Summit,” with the aim of bolstering Black economic influence through education and fellowship. Held Jan. 24 to Jan. 25 at the Westin Los Angeles Airport Hotel, the convention brought together some of the most influential Black business leaders, policy makers and economic thinkers in the state. The discussions focused on a wide range of economic topics pertinent to California’s African American business community, including policy, government contracts, and equity, and more.

Published

5 days ago

April 20, 2024

Oakland Post

Toks Omishakin, Secretary of the California State Transportation Agency (CALSTA), answers questions from concerned entrepreneurs frustrated with a lack of follow-up from the state. January 24, 2024 at the Westin Los Angeles Airport Hotel, Lost Angeles, Calif. Photo by Solomon O. Smith

By Solomon O. Smith, California Black Media

The California African American Chamber of Commerce hosted its second annual “State of the California African American Economy Summit,” with the aim of bolstering Black economic influence through education and fellowship.

Held Jan. 24 to Jan. 25 at the Westin Los Angeles Airport Hotel, the convention brought together some of the most influential Black business leaders, policy makers and economic thinkers in the state. The discussions focused on a wide range of economic topics pertinent to California’s African American business community, including policy, government contracts, and equity, and more.

Toks Omishakin, Secretary of the California State Transportation Agency (CALSTA) was a guest at the event. He told attendees about his department’s efforts to increase access for Black business owners.

“One thing I’m taking away from this for sure is we’re going to have to do a better job of connecting through your chambers of all these opportunities of billions of dollars that are coming down the pike. I’m honestly disappointed that people don’t know, so we’ll do better,” said Omishakin.

Lueathel Seawood, the president of the African American Chamber of Commerce of San Joaquin County, expressed frustration with obtaining federal contracts for small businesses, and completing the process. She observed that once a small business was certified as DBE, a Disadvantaged Business Enterprises, there was little help getting to the next step.

Omishakin admitted there is more work to be done to help them complete the process and include them in upcoming projects. However, the high-speed rail system expansion by the California High-Speed Rail Authority has set a goal of 30% participation from small businesses — only 10 percent is set aside for DBE.

The importance of Diversity, Equity and Inclusion (DEI) in economics was reinforced during the “State of the California Economy” talk led by author and economist Julianne Malveaux, and Anthony Asadullah Samad, Executive Director of the Mervyn Dymally African American Political and Economic Institute (MDAAPEI) at California State University, Dominguez Hills.

Assaults on DEI disproportionately affect women of color and Black women, according to Malveaux. When asked what role the loss of DEI might serve in economics, she suggested a more sinister purpose.

“The genesis of all this is anti-blackness. So, your question about how this fits into the economy is economic exclusion, that essentially has been promoted as public policy,” said Malveaux.

The most anticipated speaker at the event was Janice Bryant Howroyd known affectionately to her peers as “JBH.” She is one of the first Black women to run and own a multi-billion-dollar company. Her company ActOne Group, is one of the largest, and most recognized, hiring, staffing and human resources firms in the world. She is the author of “Acting Up” and has a profile on Forbes.

Chairman of the board of directors of the California African American Chamber of Commerce, Timothy Alan Simon, a lawyer and the first Black Appointments Secretary in the Office of the Governor of California, moderated. They discussed the state of Black entrepreneurship in the country and Howroyd gave advice to other business owners.

“We look to inspire and educate,” said Howroyd. “Inspiration is great but when I’ve got people’s attention, I want to teach them something.”