Senators Revise Bill to Claw Back Compensation from Bank Executives
A bipartisan group of Senators on the Banking, Housing and Urban Affairs Committee revised a bill to provide that "the Federal Deposit Insurance Corporation and appropriate Federal regulators have the authority to claw back certain compensation paid to executives."
In the most recent revision of the "Failed Bank Executives Clawback Act" introduced after the recent failures of Silicon Valley Bank and Signature Bank (see previous coverage), the legislators authorized the FDIC to clawback any or all of the executives' compensation from three years instead of five years preceding a bank’s failing. The updated proposal would (i) apply to "high-level" personnel involved in the decision-making of banks with $10 billion or more in assets, (ii) hold funds clawed back from executives in the FDIC's Deposit Insurance Fund and (iii) extend the clawback authorities established under Dodd-Frank.
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Senators Elizabeth Warren (D-MA), Josh Hawley (R-MO), Mike Braun (R-IN), and Catherine Cortez Masto (D-NV) introduced a bill to "to clarify that the Federal Deposit Insurance Corporation and appropriate Federal regulators have the authority to claw back certain compensation paid to executives."
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FDIC Chair Martin J. Gruenberg, Federal Reserve Board Vice Chair for Supervision Michael S. Barr and Treasury Undersecretary for Domestic Finance Nellie Liang testified before the House Financial Services Committee on the Signature Bank and Silicon Valley Bank failures.
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The Congressional Research Service reviewed the FDIC’s process for resolving failed FDIC-insured banks and identified related policy issues.
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FDIC Chair Martin Gruenberg, Federal Reserve Board Vice Chair for Supervision Michael Barr and Treasury Undersecretary for Domestic Finance Nellie Liang testified before the Senate Banking Committee on the Signature Bank and Silicon Valley Bank failures.
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In a joint statement, the U.S. Treasury, the FDIC and the Federal Reserve Board announced that all depositors, both insured and uninsured, of Silicon Valley Bank and Signature Bank, would be made whole for their deposits.
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In a Financial Institution Letter, the FDIC told counterparties and service providers to the recently failed Silicon Valley Bank, N.A. and Signature Bank, N.A. that (i) they remain obligated to the successor bridge banks of the two failed banks and (ii) they must meet their contractual obligations to the bridge banks.
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House Financial Services Committee Chair Patrick McHenry (R-NC) and Ranking Member Maxine Waters (D-CA) urged the Government and Accountability Office to undertake an immediate examination of the causes leading to the closures of Silicon Valley Bank and Signature Bank.
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House Financial Services Committee Chair Patrick McHenry (R-NC) and Senate Banking Committee Ranking Member Tim Scott (R-SC) requested information from the FDIC and FRB regarding their regulatory oversight of Silicon Valley Bank and Signature Bank in the two years leading up to the banks' collapse.
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FDIC Chair Martin Gruenberg, Federal Reserve Board Vice Chair for Supervision Michael Barr and Treasury Undersecretary for Domestic Finance Nellie Liang testified before the Senate Banking Committee on the Signature Bank and Silicon Valley Bank failures.