The collapse of Silicon Valley Bank on March 10 has had broad ramifications. It was the largest bank by deposits in Silicon Valley, holding the money of some of the country’s wealthiest individuals. Silicon Valley’s aggregate household wealth is nearly $1.1 trillion, Cal Matters reported.

Because they are SVB depositors, Silicon Valley billionaires and millionaires were indirectly bailed out by the President Joe Biden administration and U.S. government.

But the collapse also affected Black founders. SVB had reached out to Black entrepreneurs, offering funding opportunities.

“Less than 1% [of tech sector investment capital] goes to Black female founders,” Tiffany Dufu, founder and CEO of The Cru, a startup to help women achieve their goals, told NPR. When SVB failed, she temporarily couldn’t make payroll. “There are a lot of underrepresented founders and leaders in this community who were grossly impacted by this. There’s not a lot of liquidity. We don’t have large assets to draw on. And so this really created a crisis for us.”

At the end of December, Silicon Valley Bank, the nation’s 16th largest bank, held about $209 billion in total assets, making it the second-largest failure of a federally insured bank after Washington Mutual collapsed during the financial crisis in 2008.

The government has now bailed out Silicon Valley. On March 12, the government stopped a potential banking crisis after the failure of Silicon Valley Bank. The government assured all depositors at the failed institution that they could access all their money quickly.

Given the number of Black founders affected by the SVB failure, is the Congressional Black Cause for or against the bailout? On the flip side, white billionaires and millionaires, some of whom have not promoted diversity in the tech industry, were baled out. If the CBC supports the bailout, would it mean they are aiding Silicon Valley’s white upper echelon?

The Moguldom Nation reached out to the CBC and CBC members to find out, but as of press time, has not received a response.

What is known is that CBC member congresswoman Maxine Waters announced she would return political donations from SVB.

The top Democrat on the House Financial Services Committee, Waters received $2,500 from SVB’s political action committee in late 2020.

“Yes, I will send it back,” she told Politico recently.

Waters recalled speaking to an SVB representative around 2020 about FinTech issues.

“Everybody knows I have an open-door policy,” she said. But she said she did not speak with the bank about the 2018 bill that loosened up regulations of banks like SVB. Waters opposed the bipartisan measure, which has come under renewed scrutiny since the California-based bank’s collapse. Lobbyists for Silicon Valley Bank were among those that lobbied on the bill.

“Philosophically, I’m opposed to deregulation, always have been, been consistent on it, and will continue to be,” Waters said.

Aters isn’t the only politician to take a donation from SVB. Between 2017 and 2022, Silicon Valley Bank’s PAC gave more than $50,000 to the campaigns of nearly two dozen senators and representatives, according to filings with the Federal Election Commission. Members who served on committees such as the House Financial Services Committee or Senate Finance Committee received most SVB donations. 

Regarding the bailout, Waters says Congress should consider raising the cap on deposits backed by the Federal Deposit Insurance Corporation, The New York Times reported.

“When you have something like Silicon Valley Bank with over 90 percent of its depositors uninsured, do we increase the amount of premiums that banks will pay in order to have a bigger insurance fund or do we just remain the way that we are and take it on a one-by-one basis for consideration?” Waters explained.