WASHINGTON–Two senators on opposite ends of the political spectrum have found common ground in a bill that seeks to clawback compensation from bank executives at institutions that fail.
Sen. Elizabeth Warren (D-MA) and Sen. Josh Hawley (R-MO) have joined with Sens. Mike Braun (R-IN and Catherine Cortez Masto (D-NV) to introduce the "Failed Bank Executives Clawback Act," which would require that federal regulators "claw back" compensation of executives from the five-year period before their bank fails.
The legislation comes in the wake of the failure of Silicon Valley Bank and news reports that the bank was paying out bonuses on the day it was seized by regulators. SVB CEO Greg Becker's compensation reached almost $10 million last year, CBS News reported, adding that part of that compensation was a $1.5 million cash bonus.
The Federal Deposit Insurance Corporation (FDIC) currently has a limited ability to recoup executives' compensation following a bank failure, and the lawmakers' bill would "extend claw back authorities" under the law to apply to any bank under FDIC's receivership, according to the bill's fact sheet.
‘Fat Cat Bankers’
"The President called on Congress to pass a new law to hold failed bank CEOs accountable and give the financial cops on the beat additional authority to clawback lavish pay and bonuses when executives explode their bank – and this bipartisan bill answers that imperative," Warren said in a statement. "Americans are sick and tired of fat cat bankers paying themselves handsomely while risking other people's hard earned money. It's time for Congress to step up and strengthen the law so bank executives bear the cost of failure, not line their pockets and walk away scot-free."
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