“No one is above the law,” Biden said in a statement laying out the demands.
Topline
The Biden Administration is pressing Congress to broaden regulators’ authority to penalize executives of failed banks, marking the White House’s latest push to tighten restrictions in the wake of the collapse of three U.S. banks over the past 10 days.Key Facts
Biden wants Congress to give the Federal Deposit Insurance Corporation the power to bar executives of failed banks from working in the industry if they engage in “willful or continuing disregard for the safety and soundness” of their banks, he said in a statement released Friday.
The White House also wants to empower the FDIC to “claw back compensation, including gains from stock sales,” from executives of failed banks, citing reports that Greg Becker, the CEO of the now-defunct Silicon Valley Bank, sold more than $3 million worth of shares days before the agency shuttered the bank and took control of its assets.
Under current clawback rules established by the 2010 Dodd-Frank Act, the FDIC only has authority to recoup compensation from executives at “the very largest financial institutions.”
Biden is also seeking to allow the FDIC to fine “negligent executives of failed banks,” noting that current laws only allow the FDIC to seek monetary penalties when bank executives “recklessly” engage in a pattern of “unsafe or unsound” practices.
