WASHINGTON, D.C. – The U.S. Senate Banking Committee today approved the RECOUP Act, which would permit federal regulators to claw back banker bonuses paid in the two years preceding a bank’s failure. Public Citizen highlighted the perverse pay incentives behind the reckless decisions by Silicon Valley Bank executives during the committee’s hearings. Bartlett Naylor, financial policy advocate for Public Citizen, released the following statement:
“Chair Sherrod Brown’s (D-Ohio) reform measure will help ensure that banksters don’t walk away from a bank they crashed flush with millions in ill-gotten bonuses. A key milestone: This is the first banking bill approved by the committee since 2019. Ideally, the negotiations that resulted in a nearly unanimous committee vote will help win passage in the House.
“Importantly, the bill also would combat the growth of megabanks by allowing regulators to accept a second-best bid for a failed bank over a better bid from a megabank.”