Bipartisan agreement reached on bill to claw back earnings from CEOs of failed banks

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The Senate Banking Committee announced it would be debating a bill to punish executives of big banks that end up failing. The legislation is bipartisan, meaning it has better odds of becoming law.

Chairman Sherrod Brown and ranking member Tim Scott said on Thursday night that they reached an agreement on legislation, the Recovering Executive Compensation from Unaccountable Practices, or RECOUP, Act. The goal of the bill is to prevent bank failures by disincentivizing executives from allowing their institutions to go under.“Americans have watched executives take their money, run banks into the ground, and get away with it too many times before.

Additionally, the $1 million civil penalty that regulators charge executives who “recklessly” violate the law would be increased to $3 million. The news comes about three months after the sudden collapse of Silicon Valley Bank, which was taken over by the Federal Deposit Insurance Corporation in March.

 

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