{"id":1949375,"date":"2023-06-16T15:52:02","date_gmt":"2023-06-16T19:52:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bank-executive-pay-could-be-seized-for-failures-under-senate-bill-proposal\/"},"modified":"2023-06-16T15:53:54","modified_gmt":"2023-06-16T19:53:54","slug":"bank-executive-pay-could-be-seized-for-failures-under-senate-bill-proposal","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bank-executive-pay-could-be-seized-for-failures-under-senate-bill-proposal\/","title":{"rendered":"Senate bill proposes seizing bank executive pay for failures."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fbank-executive-pay-could-be-seized-for-failures-under-senate-bill-proposal%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1949375&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"post_content\">\n<p>The Senate Banking Committee is set to consider an exciting bipartisan bill that would hold executives accountable for bank failures by allowing government regulators to seize their compensation.<\/p>\n<p>Sen. Sherrod Brown (D-Ohio), the committee&#8217;s chairman, and Sen. Tim Scott (R-S.C.), the panel&#8217;s ranking Republican, reached a deal on June 16 after a series of regional bank failures rocked the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-dems-want-to-monitor-americans-bank-accounts-blasted-as-violating-4th-amendment\/\" title=\"Biden, Dems Want To Monitor Americans\u2019 Bank Accounts, Blasted As Violating 4th Amendment\">financial services industry<\/a>.<\/p>\n<p>The recent collapse of three U.S. banks has sparked a call for tougher penalties for executives at failed financial institutions, gaining support from both the Biden administration and Congress.<\/p>\n<p>Now, in the wake of the 2023 bank crisis, lawmakers are expanding their efforts to address issues within the larger institutions.<\/p>\n<h2>2023 Bank Crisis Sparks Calls for Reform<\/h2>\n<p class=\"\">The crisis began when federal regulators shut down Silicon Valley Bank (SVB) in March due to concerns about its solvency.<\/p>\n<p class=\"\">The Federal Deposit Insurance Corp. (FDIC) labeled this collapse as the largest bank failure since 2008, following the collapse of Washington Mutual.<\/p>\n<p>This event triggered a massive bank sell-off and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-fears-intensify-after-stocks-fall-into-bear-market\/\" title=\"Recession Fears Intensify After Stocks Fall Into Bear Market\">stock market decline<\/a>, raising concerns about the stability of other regional banks.<\/p>\n<p class=\"\">Within days, Signature Bank also collapsed, becoming the third-largest bank failure in U.S. history. Depositors withdrew billions from smaller institutions after the FDIC seized SVB.<\/p>\n<p>In May, the Senate committee held a hearing with executives from Signature and SVB, subjecting them to intense questioning about their mismanagement that led to the banks&#8217; shutdown.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">SVB&#8217;s former CEO, Greg Becker, sold $3.6 million of shares in his bank just days before the bank disclosed a $1.8 billion loss, triggering a fatal bank run on March 9.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">The bank was seized by regulators the next day, and the Federal Reserve is currently investigating bonuses paid to SVB employees prior to the collapse.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">Becker defended his compensation bonus last month, stating that SVB&#8217;s board believed it was fair and accurate.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">To address these issues, the proposed bill would require banks to adopt corporate governance and accountability standards to enhance responsiveness to federal banking supervisors.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">Before its failure, SVB had 31 open supervisory findings, with the Fed acknowledging that the bank received three times the average number of warnings compared to its peers.<\/p>\n<h2>Senate Bill to Allow Regulators to Seize Bonuses From Executives for Bank Failures<\/h2>\n<p>Senators Brown and Scott, with the latter running for the 2024 GOP presidential nomination, have announced that their committee will hold a vote on June 21 for the Recovering Executive Compensation Obtained from Unaccountable Practices Act (<a href=\"https:\/\/www.banking.senate.gov\/imo\/media\/doc\/recoup_act_one-pager_-_2456869.pdf\" target=\"_blank\" rel=\"noopener\">RECOUP Act)<\/a> to advance the measure to the full Senate.<\/p>\n<p>The proposed bill would empower the FDIC to claw back two years&#8217; worth of compensation paid to executives after a bank failure and strengthen their ability to impose civil penalties on those who fail to manage their banks&#8217; operations adequately.<\/p>\n<p>This includes seizing bonuses, earnings from the sale of securities received by senior executives within 24 months before their bank&#8217;s failure, and other performance-based compensation.<\/p>\n<p>The bill would also mandate that <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bank-executive-pay-could-be-seized-for-failures-under-senate-bill-proposal\/\" title=\"Senate bill proposes seizing bank executive pay for failures.\">banks include responsible bank management<\/a> in their bylaws standards.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">The proposed bonus clawbacks in the bill would not apply to thousands of community banks with less than $10 billion in assets. Additionally, executives who were at a failed bank for less than a year must prove that they did not contribute to the lender&#8217;s failure.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">Clawbacks of executive bonuses in the financial sector have been implemented in the past. For instance, in 2012, UBS revoked share-based payouts for investment-bank employees who were due to receive bonuses of over $2 million following a rogue-trading scandal.<\/p>\n<h2>Proposed Legislation May Face Opposition From House Republicans<\/h2>\n<p>The bipartisan support from senior members on the Senate committee positions this legislation as one of the best opportunities for Congress to enact new laws in response to bank crises.<\/p>\n<p class=\"css-k3zb6l-Paragraph e1e4oisd0\">Senators<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Senate Banking Committee plans to review a bipartisan bill enabling regulators to confiscate pay from executives accountable for bank collapses. Sen. Sherrod Brown (D-Ohio), the committee&#8217;s chairman, and Sen. Tim Scott (R-S.C.), the ranking Republican, reached an agreement on June 16 following a series of regional bank failures.<\/p>\n","protected":false},"author":327,"featured_media":1949376,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[5373,3741,8853,5280,5392,22897,3740],"class_list":["post-1949375","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times","tag-bank","tag-executive","tag-failures","tag-pay","tag-proposes","tag-seizing","tag-senate"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1949375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/327"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1949375"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1949375\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1949376"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1949375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1949375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1949375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}