U.S. Sens. Sherrod Brown (D-OH) and Tim Scott (R-SC) introduced legislation to hold senior executives of failed banks accountable on several fronts.
Specifically, the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act would hold them accounting by clawing back their compensation, penalizing them for their misconduct, and directing banks to strengthen corporate governance standards.
“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,” Brown, chairman of the Senate Banking, Housing and Urban Affairs Committee, said. “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.”
In March, Brown and Scott, the ranking member on the committee, sent a 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.
Brown and Scott also announced that the committee will mark up the RECOUP Act and the Fentanyl Eradication and Narcotics Deterrence (FEND) Off Fentanyl Act on June 21.
Scott and Brown introduced the FEND Off Fentanyl Act in April, a bill aimed at combatting the 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.
“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,” Scott said.
The FEND Off Fentanyl Act now has 55 cosponsors in the U.S. Senate and has been introduced in the U.S. House of Representatives.