U.S. SENATOR KATIE BRITT, COLLEAGUES INTRODUCE BIPARTISAN BILL TO CLAW BACK COMPENSATION FROM RECKLESS EXECUTIVES WHO CAUSE BANK FAILURES

Washington, D.C., June 2, 2023 – U.S. Senator Katie Britt (R-Ala.), a member of the Senate Committee on Banking, Housing, and Urban Affairs, today joined Senator J.D. Vance (R-Ohio), Senator Elizabeth Warren (D-Mass.), and a bipartisan group of colleagues in introducing the Failed Bank Executives Clawback Act, legislation that would enable federal regulators to claw back compensation from bank executives who are responsible for their institution’s failures.

The bill would expand the existing authority of the Federal Deposit Insurance Corporation (FDIC) to claw back the compensation of bank executives when they are found to have substantially contributed to the collapse of a financial institution by engaging in reckless business practices. Any funding that is clawed back will be directed to the FDIC’s Deposit Insurance Fund.

This legislation was introduced in light of the recent collapses of Silicon Valley Bank (SVB) and Signature Bank, considering the cost of the institutions’ collapse to the Deposit Insurance Fund and impact to the broader banking sector. Senator Britt questioned former SVB CEO Greg Becker at a recent Banking Committee hearing, demanding answers about his responsibility in the bank’s collapse and if he had any plans to give back the $1.5 million bonus he received.

Co-sponsors of the bill also include U.S. Senators Bob Menendez (D-N.J.), Mark Warner (D-Va.), Kevin Cramer (R-N.Dak.), Chris Van Hollen (D-Md.), Tina Smith (D-Minn.), Raphael Warnock (D-Ga.), John Fetterman (D-Pa.), Catherine Cortez Masto (D-Nev.), Josh Hawley (R-Mo.), and Mike Braun (R-Ind.).

“When executives drive financial institutions into failure with reckless business practices, they shouldn’t be allowed to use their golden parachutes to escape responsibility while their customers, their employees, and hardworking American families are left footing the bill for the failure of their bank,” said Senator Katie Britt. “This commonsense legislation will dissuade risky bank mismanagement and ensure that bad actors are held accountable.”

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