Republican Sen. Tim Scott has joined forces with Democratic Sen. Sherrod Brown on a new bill that would narrow penalties for executives who oversaw failed banks, placing it at odds with more stringent bipartisan legislation proposed by other lawmakers.
Democrat Sen. Elizabeth Warren and Republican lawmakers recently proposed similar legislation that contains harsher penalties for banking executives, which has garnered broad support from members of the Senate Banking Committee. Scott and Brown unveiled the bill Thursday after a series of bank failures, beginning with the collapse of Silicon Valley Bank, that stoked national fears of a widespread banking crisis.
Both bills would give power to regulators to take back compensation from top executives in the event of a bank failure, putting the blame on the bank leadership, according to the bills. Regulators would be able to impose fines in order to confiscate various forms of compensation like bonuses and stock sell-offs and bar executives from working further in the industry.
Yet, Scott and Brown’s bill differs from Warren’s legislation in that it would only extend back two years instead of three to recoup compensation, would not include the confiscation of salaries received by bank executives and would not apply to all directors and controlling shareholders.
Republican Sen. Josh Hawley, a co-sponsor with Warren on the earlier bill, said, “I’m just really worried that that’s going to get watered down,” in response to the new legislation, according to Politico.
You take out a loan. You pay it back.
We’ve got to incentivize sound financial practices in America. pic.twitter.com/ZBy5idqLX0
— Tim Scott (@SenatorTimScott) June 14, 2023
The string of failures began with SVB’s collapse in March after panicked depositors pulled their money, causing a bank run that plunged the bank’s stock by 60%.
Other banks, like Signature Bank and First Republic Bank, failed shortly after SVB. The federal government spent $13 billion to take over and sell First Republic Bank to JPMorgan and Chase in March, according to a press release from the Federal Deposit Insurance Corporation.
Scott did not immediately respond to a request for comment.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.
JOIN US @NewRightNetwork on our Telegram, Twitter, Facebook Page and Groups, and other social media for instant news updates!
New Right Network depends on your support as a patriot-ran American news network. Donate now