Small and regional banks are being left to fend for themselves while big banks like Silicon Valley Bank are being bailed out
03/15/2023 // Arsenio Toledo // Views

As the federal government scrambles and spends as much American taxpayer dollars as it can to bail out big banks like Silicon Valley Bank and Signature Bank, small and regional banks that have been negatively affected by the fallout of their collapses are being left to fend for themselves.

Following the near-overnight bank failures of SVB and Signature, the Department of the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation made it known that depositors "will be made whole," regardless of how much money they had in the banks, while the banks' assets will be taken over by the federal government. Meanwhile, shareholders, unsecured debtholders and everyone else "will not be protected." (Related: Bank collapse contagion? Customers line up to take their money out of First Republic Bank.)

"The plan, or just what's going to unfold, is regional banks are gonna go puff," warned financial expert Ed Dowd during an interview with Mel K on her show. "The depositors will be okay, the [bank] assets will be gobbled up by the [Big Banks] … This is gonna be another wave of consolidation of power."

Mel K likened the coming consolidation to what happened following the 2008 Great Recession.

"After that crash, nothing happened. Nobody went to jail," she noted. "It appears that the only thing that happened was that many, many financial institutions that were too small to save disappeared, or they were given all kinds of regulations that they couldn't keep up [with] … it was impossible. So, it shrunk the amount of banks."


"We're gonna look like Canada," warned Dowd. "Canada's got ginormous banks that don't have regional banks … and if you wanted to implement social credit scores and central bank digital currencies, wouldn't it be easier if there were fewer banks?"

Small, regional banks scrambling to reassure clients they won't collapse

Small and regional banks all over the United States are scrambling to reassure their clients and depositors that SVB and Signature Bank's collapse won't affect them.

"It's just a totally different situation," noted Alabama Credit Union President and CEO Steve Swofford in an interview. Swofford had to send emails to all of the credit union's branches and call center supervisors to inform their customers that SVB primarily catered to the tech industry and that the majority of its deposits were uninsured. Meanwhile, the $1.6 billion-asset Alabama Credit Union's accounts are for individuals, over 90 percent of whom are insured.

Scott Wilson, president and CEO of SeaComm Federal Credit Union, had to make a similar case to the customers of the $770 million-asset company. He noted that the credit union does not take risky investments like the bigger banks. "Consistency will go a long way to continue to instill confidence in the credit union," he said.

"These failures involved banks that operate very differently," noted James Anthony, president and CEO of the $1.3 billion-asset Martha's Vineyard Bank, in a letter to clients. "Indeed, their collapse emphasizes the importance of entrusting your deposits with a bank that provides the maximum possible protections."

These entreaties might not be enough for some regional banks, especially those with a high percentage of deposits that are uninsured. This includes banks like First Republic Bank, Comerica and Western Alliance Bancorp, which have 68 percent, 60 percent and 55 percent of deposits that are uninsured, respectively.

"There are just a lot of dirty bombs going off right now," noted Robert Bolton, president of Iron Bay Capital, an asset management company that invests in banks. "So the small guys have to be careful even as they explain they really have no direct connection to all of this."

For more related stories, visit

Watch this episode of "The Mel K Show" as host Mel K talks to financial expert Ed Dowd about the controlled demolition of the American financial system.

This video is from the channel The Mel K Show on

More related stories:

Stocks in multiple banks tank after collapse of SVB, leading to several halts in trading.

CLAIM: Signature Bank shut down and seized by feds to send warning message to crypto industry.

Shareholders file class action suit against Silicon Valley Bank over alleged securities fraud.

Hyperinflation meets the Great Depression – Andy Schectman warns Mike Adams about the catastrophic banking collapse now accelerating.

Failed Silicon Valley Bank paid out bonuses to staffer HOURS before it collapsed as Biden talked about possible bailout.

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