Cortez Masto introduces bill to recoup money from failed bank executives
The bill comes in the wake of the failure of Silicon Valley Bank
WASHINGTON D.C., Virginia (KOLO) - Nevada Senator Catherine Cortez Masto and three other Senators introduced a bill that would recoup money from failed bank executives.
The Failed Bank Executives Clawback Act was introduced by Cortez Masto, Elizabeth Warren of Massachusetts (D), Mike Braun of Indiana (R), and Josh Hawley of Missouri (R).
It would require federal regulators to claw back all or part of the compensation received by a bank executive in the five-year period preceding the failure in the event of a bank failure.
“It’s unacceptable for the executives at Silicon Valley Bank or any major financial institution to pay themselves millions in bonuses while running their banks into the ground,” said Senator Cortez Masto. “This bipartisan legislation will make sure we are holding these individuals accountable for threatening the financial stability of businesses and families in Nevada and across the country.”
Cortez Masto says the FDIC’s current ability to recoup these funds is limited. More specifically, the bill would:
- Require the FDIC to claw back from bank executives all or part of the compensation they have received over the five-year period preceding a bank’s insolvency or FDIC-resolution as is necessary to prevent unjust enrichment.
- Extend claw back authorities established by the Dodd-Frank Wall Street Reform and Consumer Protection Act to apply to any bank entered into FDIC receivership, not only those resolved under the FDIC’s Orderly Liquidation Authority.
- Ensure that, should an insured depository institution affiliated with a bank holding company fail, investors in that holding company should bear the losses of the insured depository institution.
The bill comes in the wake of the failure of Silicon Valley Bank.
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