Barney Frank blames crypto panic for bank collapse. Elizabeth Warren blames Trump.

“I don’t think it had any impact,” Frank said in an interview. “They hadn’t stopped investigating banks.”

But Warren, a fellow at the Massachusetts Democrat who crafted landmark consumer protection measures that ended up in Frank’s 2010 banking law, blames Trump-era changes that relaxed oversight of some banks and says Signature is a prime example of the fallout.

“Had Congress and the Federal Reserve not rolled back the stricter oversight, SVB and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks,” Warren wrote Monday in a New York Times op-ed.

The split between Frank and Warren is just a preview of what’s to come as Democrats sort out positions on how to respond to the latest banking crisis, which led to a weekend bailout of depositors at Silicon Valley Bank and Signature. Some like Warren want Washington to restore the tougher regulations rolled back in 2018. Some Democrats, like Frank, say the 2018 law isn’t the problem. A number of moderate Democrats still in Congress helped write the 2018 legislation, including those facing re-election in 2024.

Frank, who has been on Signature’s board since 2015, said his bank was in “good shape” but was hit by a run generated by “the nervousness and beyond nervousness from SVB and crypto.” The bank’s digital asset business made it the “unfortunate victim of the panic that really goes back to FTX,” the cryptocurrency exchange that failed last year.

Frank said other lenders were in trouble in recent days, and Federal Home Loan Bank told Signature when it applied for money on Friday that “they didn’t have enough to go around because they were getting so many requests.”

Frank said Signature, now in the hands of regulators, is likely to sell for close to what the bank’s executives thought it was worth.

“The FDIC and the state of New York looked at things and made their decision,” Frank said. “Honestly, I was surprised by it. They apparently had a more negative view of our solvency.”

A spokesperson for Signature declined to comment on what happened to the bank. New York Governor Kathy Hochul said Monday that federal and state regulators “saw that a run on a regional bank could pose a significant risk to our stability.”

The 2018 law that eased banking regulations moved forward with some encouragement from Frank, who was on Signature’s board at the time. He was a proponent of raising a cap of $50 billion in the 2010 law that triggered stricter oversight.

Congress ended up changing the framework so that banks would be eligible for greater regulatory scrutiny once they reached $100 billion in assets and then automatically face the toughest regulation at $250 billion.

Signature was poised to be a big beneficiary of the change, with assets of about $44 billion in 2018. It had $110 billion in assets as of this weekend.

Frank said Sunday that he did not think changing the threshold to $250 billion from $50 billion “had any impact.”

“I think if it hadn’t been for FTX and the extreme nervousness around crypto, this wouldn’t have happened – even to SVB or us,” he said. “And it was not something that could have been foreseen by regulators.”

Warren is now holding up Signature — and SVB — as a reason why Congress and regulators should reverse any light bank supervision triggered by the 2018 law. Silicon Valley Bank had assets of about $209 billion when it failed, up from about $57 billion at the end of 2018.

“SVB and Signature would be subject to stronger liquidity and capital requirements to withstand financial shocks,” she said in the New York Times. “They would have been required to conduct regular stress tests to expose their vulnerabilities and strengthen their business. But because these requirements were lifted, when an old-fashioned bank run hit SVB, the bank could not withstand the pressure – and Signature’s collapse soon followed.”

Frank and Warren appear to be converging on one issue — support for greater depositor protection. Federal deposit insurance is capped at $250,000, but the Biden administration and regulators have essentially pledged to support all deposits at the failed banks.

Warren said in his New York Times op-ed that regulators should reform deposit insurance so that during this crisis and in the future, “companies trying to make payroll and otherwise conduct regular financial transactions are fully covered — while ensuring the costs of protecting oversized depositors are borne by the financial institutions that pose the greatest risk.”

Frank said he felt vindicated by the government’s decision to guarantee all deposits because, when he was served in the House, he wanted to pass legislation that would expand deposit insurance, especially for businesses.

He wants Congress to revive that idea and look at what is a reasonable amount to help cover wages — tens of millions of dollars, in his view.

Had the government announced its deposit freeze on Friday, “we wouldn’t have the problem.”