There could be further progress Wednesday in the bipartisan push to take back pay from executives at failed banks, as the Senate Banking Committee is slated to consider a bill that would permit regulators to claw back compensation received in the two years before a failure.
The measure — dubbed the Recoup Act — was rolled out last week by the committee’s chairman, Democratic Sen. Sherrod Brown of Ohio, and Republican Sen. Tim Scott of South Carolina, a presidential candidate. It’s due to get considered by the panel at 9:30 a.m. Eastern Wednesday.
“They may have some negotiating left to do with Sen. Elizabeth Warren,” said Capital Alpha Partners analyst Ian Katz in a note on Tuesday, adding that the Massachusetts Democrat “has pushed for a harsher bill.”
Warren’s bill, called the Failed Bank Executives Clawback Act, would require that regulators take back all or part of the compensation that execs received in the three years before their bank’s failure. It has support from Republicans such as Ohio Sen. J.D. Vance and Missouri Sen. Josh Hawley.
See: Elizabeth Warren, J.D. Vance team up to claw back failed banker pay
President Joe Biden also has expressed support for clawbacks. He urged Congress in a March speech to make it easier for regulators to take back compensation from execs after the failures of Silicon Valley Bank
SIVBQ,
and New York’s Signature Bank
SBNY,
A bill aimed at bankers’ pay has a chance of becoming law, but it isn’t likely to rock the sector
KBE,
according to Capital Alpha’s Katz.
“While this is headline-grabbing legislation and has the potential to pass both chambers of Congress and become law, we don’t expect it to change much in the way banks operate, since no bank executive goes into the job expecting his/her bank to fail,” the analyst said.
Now read: Justice Department to weigh updating banking competition rules
This story originally appeared on Marketwatch
