[HARTFORD, CT] –U.S. Senator Richard Blumenthal today joined U.S. Reps. Adam Schiff (D-CA) and Mike Levin (D-CA) to introduce the Deliver Executive Profits on Seized Institutions to Taxpayers Act in response to last week’s Silicon Valley Bank collapse – the second largest bank failure in American history.
The FDIC has acted to ensure workers and small businesses are not left with nothing. But before the bank failed, CEO Greg Becker sold a reported $3.6 million in SVB stock, potentially profiting off the impending demise of the very bank he managed. And SVB employees received bonuses just hours before the government stepped in to close the bank.
This legislation would hold executives of failed banks that receive federal assistance like SVB accountable for the mismanagement of the funds they were trusted with by allowing the Treasury Department to claw back bonuses and stock profits – ensuring they are held financially responsible and the burden of their actions doesn’t land on the shoulders of consumers or taxpayers.
“This measure answers the common call for accountability to meet sheer corporate greed—Silicon Valley Bank top executives pocketing huge bonuses even as their business was collapsing and depositors’ money disappearing into thin air. Our legislation claws back self-dealing payouts and stock transaction benefits to top bank leaders, returning the money to taxpayers and protecting depositors. We won’t leave the American public holding the bag for another failed bank whose top executives lined their pockets on the way out. This commonsense step should be accompanied by other even broader systemic reforms,” said Senator Blumenthal.
The DEPOSIT Act would:
• Recoup from bank executives the bonuses and profits from stock sales made within 60 days of a bank failing
• Impose a 90% tax on the bonuses of bank executives who make an annual income over $250,000 during the year when a bank goes under FDIC acquisition
• Require bank executives to forfeit 100% of profits they made from recent bank stock trades
• Direct the recouped funds to the FDIC insurance fund so that it can be returned to depositors and used to pay workers and small businesses that were impacted
The bill is co-sponsored by Reps. Jim McGovern (D—Mass.), Betty McCollum (D—Minn.), Raúl Grijalva (D—Ariz.), John Garamendi (D—Calif.), Chellie Pingree (D—Maine), Mark Takano (D—Calif.), Bonnie Watson Coleman (D—N.J.), Jimmy Gomez (D—Calif.), and Kevin Mullin (D—Calif.).