A bipartisan effort to ‘claw back’ compensation from bank executives who oversee a failure advanced in the Senate Wednesday, one of the most significant legislative moves to rein in the industry since the collapse of Silicon Valley Bank, YahooFinance.com reported. The bill advanced out of the Senate Committee on Banking, Housing, and Urban Affairs in a vote of 21 to 2. It came after late-night negotiations with a host of senators haggling up until the last minute on how much power to give regulators when confronting future banking failures. We "threaded the needle pretty well," said Senate Banking Committee Chair Sherrod Brown (D-OH) of the final package. He says, if enacted, the bill would give officials new power to step in if another situation arises where "executives failed at the basics of bank management." The bill grants the Federal Deposit Insurance Corporation (FDIC) new powers to force the return of executive compensation in return for a government takeover to protect the depositors at troubled banks. The bill puts the previous two years of compensation among senior bank executives on the table with a focus on perks like bonuses and stock option profits. The bill would also allow new fines as well as the banning of executives from the banking industry if misconduct is proven.
