U.S. Senate advances bank executive claw back bill
Published by: Jared Weiser
June 26, 2023 | Government Affairs
The Ohio Credit Union League is closely monitoring recent legislation that could impact credit unions. In response to the recent bank failures, the U.S. Senate Banking, Housing, and Urban Affairs Committee held its first markup since 2019 last week and advanced the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act.
This legislation only targets FDIC-insured institutions and would allow regulators to claw back specific compensation from senior executives at failed banks, including profits from selling the bank’s stock. The legislation passed with a bipartisan 21-2 vote, with Ohio Senators Sherrod Brown and JD Vance in support. There was a potential that this legislation would be used as a vehicle for other financial-institution-related initiatives, including a few credit union amendments. Central liquidity facility (CLF) access for smaller credit unions, board meeting modernization, and NCUA third-party vendor authority ultimately were not considered for inclusion in the bill.
The League will continue to advocate for CLF access, board meeting modernization, and tailoring NCUA third-party vendor examination authority to focus on data privacy and cybersecurity risk.
