Elizabeth Warren and JD Vance team up to crack down on the bank’s CEO

Elizabeth Warren and JD Vance team up to crack down scaled | ltc-a

“This isn’t just for show,” Warren said in an interview. « We actually want to make changes and we have a bill where we can do that. »

The compromise indicates that the banking sector’s thirst for accountability – shared by President Joe Biden – persists on Capitol Hill nearly three months after the bankruptcies of SVB and other regional lenders. Warren’s coalition is evidence that there may be enough political will to change policy.

With 11 of 23 Senate Banking Committee members on his bill, Warren said he had asked for the presidency Sherrod Brown (D-Ohio) to schedule a poll. A spokesperson for Brown said holding failed bank executives accountable was a priority and that he was working on the series of issues with committee members.

“My expectation is that Senator Brown will want to talk about it in the next couple of weeks in a markup, and then on the Senate floor from there,” Vance said in an interview. « I’m feeling pretty optimistic about where things are. »

Warren’s bill would require the FDIC to recover from executives of big banks the compensation they received in the three years preceding their institution’s failure or the FDIC’s resolution. The measure would target banks with assets of $10 billion or more — carving out the smallest « community » banks — and would apply to directors, officers, controlling shareholders and other high-level individuals involved in decision-making.

It comes as the FDIC and other financial regulators relaunch work on rules that it would impose new restrictions on executive pay to curb wanton risk-taking.

Sen. Josh Hawley of Missouri is the lead Republican on Warren’s proposal, having signed an older version which he released in March with Sens. Caterina Cortez Masto (D-Nev.) e Mike Braun (Zest.).

Warren turned to Vance as she tried to build GOP support on the Banking Committee where they both serve. Vance said Warren approached him after he publicly criticized the way SVB was being run.

Vance – a venture capitalist and author – helped address Republican concerns about the scope of Warren’s original plan. The spin-off for the small banks was one of the key points in the deal.

In addition to Vance, Senate Banking Republican Sens. Kate Britt of Alabama and Kevin Cramer of North Dakota signed the bill.

“JD and I went back and forth on the details of how to do this,” Warren said. “Lots of text messages late at night and early in the morning and a few phone calls on the weekend. But we put the pieces in place. And once we did that, we were able to talk to others, both Republicans and Democrats, to start building momentum around that.”

Warren’s Democratic co-sponsors on the Senate Banking Committee, besides Cortez Masto, include Sens. Bob Menendez of New Jersey, Mark Warner from Virginia, Tina Smith from Minnesota, Raphael Warnock of Georgia and John Fettermann of Pennsylvania and Chris Van Hollen of Maryland.

“People had different perspectives on how to look at it, but ultimately I ended up with a great group of partners here who are concerned about not letting these corporate executives get rich and pass the risk onto everyone else,” Warren said.

It is unclear how far the idea will catch on in the GOP-led House. Representative. Anna Wagner of Missouri, a senior Republican on the Financial Services Committee, said in an interview Wednesday that executives of failed banks face enough punishment because they lose their jobs. He said lawmakers should focus on protecting depositors.

« The issue in the House is always one of the priorities, » Vance said. « My hope is that by the end of the summer, next fall, we can get the House to deal with it. »

Eleanor Mueller and Victoria Guida contributed to the reporting.