WASHINGTON—This week, U.S. Representative Brittany Pettersen (CO-07) introduced legislation to restrict bonus payments for executives of any large bank that does not resolve serious regulatory concerns in a timely manner. H.R. 4207, the Stopping Bonuses for Unsafe and Unsound Banking Act, would help prevent a bank failure by instituting a freeze on discretionary bonuses for senior bank executives if the bank fails to submit or implement a remediation plan in response to a Matter Requiring Immediate Attention (MRIA) or similar supervisory citation.
“The actions and negligence of big bank executives directly impact the stability of our financial system. Part of preventing bank failures–like the recent collapse of Silicon Valley, New York Signature, and First Republic banks–is creating more avenues for regulators to hold bank executives accountable for quickly and thoroughly solving issues as they arise, instead of letting them snowball into unsolvable situations,” said Pettersen, a member of the House Financial Services Committee. “My bill would restrict bonuses for executives if the bank does not work with regulators to solve serious regulatory concerns, helping to safeguard our economy while protecting consumers and small businesses."
This bill is part of a larger package Pettersen and her fellow Democratic colleagues on the House Financial Services Committee are pushing to promote transparency and accountability in the financial industry. Led by Ranking Member Maxine Waters (CA-43), the package is just the first wave of legislation in response to the recent failures of Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank, which were the 2nd, 3rd, and 4th largest bank failures in U.S. history. It includes bills to protect community banks, strengthen the safety of the banking system, and enhance bank executive accountability.
