At Banking Committee Markup, Warren Supports Bill to Hold Failed Bank Executives Accountable

Hearing

Thank you, Mr. Chairman.

I want to start by saying I'm glad that this committee passed the FEND Off Fentanyl Act, but if we want to have a real impact on fentanyl trafficking, we also need to cut off the money supply. We were in a hearing a couple of weeks ago in which we heard about 90, 9-0 Chinese companies that are sending the precursor drugs to Mexico, where they're mixed up then into fentanyl and shipped around the world and to the United States.

To be effective in the fight against this, then we need to deal with the crypto payments that have become the payment of choice for these drug traffickers. This is what our law enforcement and national security experts agree: that crypto is becoming the payment of choice and this committee needs to deal with better money laundering rules for crypto.

But let me turn to the RECOUP Act. Today, this committee takes up legislation to hold bank executives accountable when they blow up their banks. And I am particularly grateful to Chair Brown for his leadership on this issue. As chair of this committee, it is clear that he is committed to fundamental fairness and to a banking system that doesn't just work for the wealthy and well-connected, but that works for every American.

Since March, our financial system has experienced the second, third, and fourth largest bank collapses in American history.

Our current laws reward executives like the ones from First Republic, and SVB, and Signature, who placed risky bets with customers' money, boosted short-term profits, scooped up huge bonuses and salaries, and walked away rich when their banks exploded and threatened the stability of the entire banking system.

When SVB bank failed back in March, both Republicans and Democrats came together to introduce the Failed Bank Executives Clawback Act. I want to offer special thanks to my early bipartisan partners, Catherine Cortez Masto, Josh Hawley and Mike Braun, who helped draft that first bill.

Our bill won substantial bipartisan support. Eleven of us -- both Republican and Democratic members of the Banking Committee then reworked the bill and joined in. I want to thank JD Vance, and Katie Britt, and Kevin Cramer for their careful work in getting the details right and helping build a larger bipartisan coalition.

When drafting that bill, I felt -- as I do now -- that legislation to claw back multi-million dollar compensation from failed bank executives needs to be iron-clad: tough enough to cover every bad actor, tough enough so that all the types of payouts that they collected while running a bank are covered, and making sure that the multiple years of bad behavior that add up to catastrophic bank failures are also covered.

It is critically important that our bank rules are also tough enough to withstand pressure from an army of bank lobbyists and financial industry lawyers who fight to weaken every regulation and create exceptions to every effort to hold banks and bank executives accountable.

There is more that we need to do -- much more -- but the RECOUP Act is a reasonable compromise that significantly improves the oversight of bank executives. It will help make the banking system safer for all Americans, and every member of Congress in both the Senate and the House should support it. I am proud that this Committee has answered President Biden's call for greater accountability and I hope we can get this done quickly.

Source