Washington D.C. – Today the U.S. Senate Banking Committee will consider the bipartisan Recovering Executive Compensation from Unaccountable Practices (RECOUP) Act that protects taxpayers by establishing anti-platinum-parachute measures for senior executives of failed banks. Government watchdog Accountable.US questioned whether Senate Banking Republicans who have taken nearly $5 million from the commercial banking industry will support greater accountability for banking executives when their greed goes too far – especially those Republicans who helped create the conditions for the recent midsize banking crisis.
The effort comes after CEOs of Silicon Valley Bank, Signature Bank and First Republic enjoyed millions of dollars in bonuses before their banks collapsed – undeserved compensation which they have since refused to return. Experts have blamed these banks’ failures on the 2018 Republican-led, financial industry-pushed, Trump-signed law that gutted Dodd-Frank’s risk-assessment safeguards for mid size institutions, which banks like SVB used as an excuse to take gambles they could not afford to lose. Government watchdog Accountable.US called the RECOUP Act an important first step to ensuring banking executives are not able to reward themselves for running their institutions into the ground – an effort that would be complemented and strengthened by the bipartisan Failed Bank Executives Clawback Act sponsored by Sen. Elizabeth Warren.
For the Republicans in Congress who gutted Dodd-Frank safeguards and invited banks to take risks beyond their means, the least they can do now is help keep CEOs from getting richer at others’ expense when their greed catches up with them. No matter how much money these Republicans have taken from the banking industry, it’s not worth protecting the status quo that incentivizes industry executives even when their risky gambles go bust and undermine the financial system.”