Brown, Scott Announce Agreement and Markup on New Bill to Hold Bank Executives Accountable for Failures
Banking and Housing Committee Will Also Mark Up the FEND Off Fentanyl Act
WASHINGTON, D.C. – Today, U.S. Senator Sherrod Brown (D-OH) and Senator Tim Scott (R-SC), the leaders of the Senate Committee on Banking, Housing, and Urban Affairs, announced an agreement on the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act. The bill would protect the American taxpayer and hold senior executives of failed banks accountable by clawing back their compensation, penalizing them for their misconduct, and directing banks to strengthen corporate governance standards.
Brown and Scott also announced that the Banking, Housing, and Urban Affairs Committee will mark up the Fentanyl Eradication and Narcotics Deterrence (FEND) Off Fentanyl Act and the RECOUP Act on Wednesday, June 21, at 9:30 AM.
“Americans have watched executives take their money, run banks into the ground, and get away with it too many times before. It’s time for CEOs to face consequences for their actions, just like everyone else,” said Senator Brown, Chairman of the Senate Banking, Housing and Urban Affairs Committee. “The bipartisan bills we will consider before the Committee next week will make our communities safer and our economy fairer by helping stop the flow of fentanyl into our communities and holding bank executives accountable for their failures.”
“Since becoming Ranking Member, I’ve stressed the importance of regular order and called for the negotiation and development of consensus solutions to the most pressing issues facing the Committee. I’m most proud the Committee will take up my FEND Off Fentanyl bill to address the deadly fentanyl epidemic plaguing our communities. Americans want meaningful action on fentanyl, and it is past time this Committee utilizes our economic tools to choke off the profits of the cartels and Chinese chemical suppliers. I thank the Chairman for joining me in this effort – now let’s turn this into law. In a separate effort, we’ve worked to find a commonsense solution to address executive accountability that is tailored to protect the American taxpayer and limit government overreach. The recent bank failures didn’t happen in a vacuum – the banks’ executives failed to manage their risk, regulators failed to exercise their supervisory responsibilities, and the Biden administration failed to stop spending, which led to rising interest rates. I look forward to continuing the hard work of demanding more answers from the Biden Administration and ensuring our nation never experiences these types of preventable failures again. This markup is the first step in returning to regular order, but I hope that this is not the last. The Committee has much work to do to improve the lives of American families, so I look forward to seeing future markups on housing reform and capital formation,” said Ranking Member Tim Scott.
The RECOUP Act will:
- Strengthen regulators’ ability to bring actions against executives who fail to appropriately oversee and manage their bank.
- Require banks to adopt corporate governance and accountability standards that promote responsible management.
- Provide the FDIC authority to claw back compensation of failed bank senior executives.
- Increase and strengthen certain penalties against bad actors.
In March, Chairman Brown and Ranking Member Scott sent a formal request to the executives of Silicon Valley Bank and Signature Bank to appear before the committee and answer for their mismanagement. In May, the Committee held a hearing with the executives of Silicon Valley and Signature Banks, where the executives were pressed on their management failures that led to these banks’ collapse.
In April, Ranking Member Scott and Chairman Brown unveiled the FEND Off Fentanyl Act, a sanctions and anti-money laundering bill aimed at combatting the country’s fentanyl crisis by targeting the illicit fentanyl supply chain, from the chemical suppliers in China to the cartels that traffic the drugs in from Mexico. The FEND Off Fentanyl Act now has fifty-five cosponsors in the U.S. Senate and has been introduced in the U.S. House of Representatives.
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