Failed Bank Executives Accountability and Consequences Act

Key Points

• The bill gives the FDIC power to claw back pay from bank executives whose negligence caused their bank to fail. This covers salary, bonuses, severance, deferred compensation, golden parachute payments, and profits from selling bank stock.
• Regulators can look back two years before a bank failed to recover executive pay. But if an executive committed fraud, there is no time limit at all on how far back the government can go.
• Federal banking agencies could permanently ban negligent executives from ever working in the banking industry again, preventing them from holding similar positions at other banks.
• Negligent executives face civil fines of up to $25,000 per day their harmful conduct lasted. Executives who acted knowingly or recklessly could face even steeper penalties.
• The bill specifically calls out the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank, urging regulators to use all available tools to hold their executives accountable.