“It’s not just for show,” Warren said in an interview. “We really want to make changes, and we have a bill where we can do that.”
The compromise indicates that a thirst for accountability from the banking sector — shared by President Joe Biden — persists on Capitol Hill nearly three months after the failure of SVB and other regional lenders. Warren’s coalition is proof that there can be enough political will to change policy.
With 11 of the 23 members of the Senate Banking Committee on her bill, Warren said she asked the president Sherrod Brown (D-Ohio) to schedule a vote. A spokesman for Brown said holding failing bank executives accountable was a priority and he was working on all issues with committee members.
“I expect Senator Brown to want to talk about it in the next two weeks in markup and then on the Senate floor from there,” Vance said in an interview. “I’m quite optimistic about the state of things.”
Warren’s bill would require the FDIC to claw back from big bank executives the compensation they received in the three years prior to their institution’s bankruptcy or FDIC resolution. The measure would cover banks with $10 billion in assets or more – cutting out smaller “community” banks – and would apply to directors, officers, majority shareholders and other high-level people involved in decision-making.
It comes as the FDIC and other financial regulators reinvigorate work on rules that impose new restrictions on executive compensation to curb unbridled risk-taking.
Sen. Josh Haley of Missouri is the Republican lead on Warren’s proposal, having signed an earlier version she aired in March with Sens. Catherine Cortez Masto (D-Nev.) and mike brown (Rind.).
Warren turned to Vance as she sought to build GOP support on the banking committee where they both sit. Vance said Warren approached him after publicly criticizing the way SVB was run.
Vance — a venture capitalist and author — helped address Republican concerns about the scope of Warren’s original plan. The exclusion of small banks was one of the main points of negotiation.
In addition to Vance, Senate Banking Republican Sens. Katie Brit of Alabama and Kevin Cramer of North Dakota signed the bill.
“JD and I chatted about the details of how to do this,” Warren said. “Lots of late night and early morning texting and a few weekend phone calls. But we got the parts right. And once we did, we were able to speak with others – Republicans and Democrats alike. — to start building momentum around that.
Warren’s Democratic co-sponsors on the Senate Banking Committee, in addition to Cortez Masto, include Sens. Bob Mendez of New Jersey, Mark Warner of Virginia, Tina Smith from Minnesota, Raphael Warnock of Georgia and John Fettermann of Pennsylvania and Chris Van Hollen of Maryland.
“People had different views on how to look at it, but ultimately I ended up with a lot of partners here who care about not letting these corporate executives get rich and push the risk away. on everyone,” Warren said.
It’s unclear how much traction the idea will gain in the GOP-led house. representing Anne Wagner of Missouri, a senior Republican member of the Financial Services Committee, said in an interview Wednesday that failed bank executives are already being punished enough for losing their jobs. She said lawmakers should focus on protecting depositors.
“The issue in the House always comes first,” Vance said. “Hopefully by the end of the summer, next fall, we can get the Chamber to deal with it.”
Eleanor Mueller and Victoria Guida contributed reporting.