House Financial Services Ranking Member Calls for Rulemaking on Executive Compensation

House Financial Services Committee Ranking Member Maxine Waters (D-CA) called on banking and financial regulators to complete a “long over due” rulemaking on incentive based compensation following the closure of Silicon Valley Bank and Signature Bank.

In a letter to the regulators and banking agencies, Representative Waters urged regulators to complete the Section 956 rulemaking under the Dodd Frank Act to prevent bank executives from receiving bonuses if their banks fail or mismanage. Representative Waters urged the banking regulators to include a "robust" clawback requirement in such rulemaking.

Representative Waters commended the Biden Administration’s action to increase banking executives' accountability (see previous coverage). Representative Waters urged the banking regulators to pursue enforcement action and take into account any profits or gains SVB and Signature Bank executives made by selling stock right before their banks’ respective closings.