THERE’S SURPRISINGLY STRONG BIPARTISAN SUPPORT for legislation to crack down on banks in the wake of the collapse of the Silicon Valley Bank and other institutions.
THE SENATE BANKING COMMITTEE this week approved — in an overwhelming vote — what would be the biggest piece of banking regulation in years. Among other things, it would enable “clawing back” up to two years of compensation for top executives of failed banks.
THE BILL HAS A TYPICAL OVER-DONE ACRONYM — The Recovering Executive Compensation from Unaccountable Practices Act — known as the RECOUP Act, got it? Going after the banks is a no-brainer — only 10% of U.S. adults say they have high confidence in the nation’s banks and other financial institutions, a new poll finds, and a clear majority supports more regulation.
IN THE BIPARTISAN VOTE WEDNESDAY, the Banking Committee agreed to ratchet up penalties for the executives of failed lenders, increase oversight of the Federal Reserve and restrict megabank takeovers, in Washington’s most significant response yet to this year’s banking turmoil.
THE MEASURE PASSED in the committee by 21-2, with support across the political spectrum — liberal Sen. Elizabeth Warren backed it, as did conservative Sen. Tim Scott. The measure heads to the Senate floor, where it has a good chance of passage.
PASSAGE MAY TAKE MANY WEEKS in the dysfunctional House, which is about to jump off a cliff with legislation — sure to fail in the Senate — to impeach President Biden. And the House seems to be hurtling to a potential government shutdown on Oct. 1 as conservatives seek more spending restraint, ripping up the deal that passed early this month..
DESPITE THESE DISTRACTIONS it’s increasingly clear that Washington and the voters want tougher banking laws, which are likely to pass later this year. And Jerome Powell will be under increasing pressure to toughen the Federal Reserve’s banking regulation as well.
Related: Budget Deficit Soars; Red Ink of $50 Trillion is Likely by 2030
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