Democrats in the U.S. House of Representatives planned to release several bank reform bills on Wednesday, according to CNBC. The proposals are supposedly designed to address the recent banking crisis that led to multiple bank failures. Democrats in the House Financial Services Committee are expected to propose nearly a dozen bills.
Wide-ranging bank reform bills
The bills in question focus on a number of areas of concern for House Democrats and their Senate counterparts. Financial services committee Maxine Waters (D-CA) has led the effort to expand regulators’ powers and punish executives of failed banks. Water has repeatedly called for Republicans on the committee to adopt the Democrats’ approach to bank reform bills.
“The failures of Silicon Valley Bank, Signature Bank, and First Republic Bank make clear that it is past time for legislation aimed at strengthening the safety and soundness of our banking system and enhancing bank executive accountability.”
The proposed bills include the Failed Bank Executives Accountability and Consequence Act. That bill, if passed into law, would provide regulators with a host of punitive powers they could use against bank executives. Those powers would apparently allow regulators to fine executives, seize their compensation, and even ban them from working in the industry if they are found to have contributed to their banks’ failures.
The bill is reportedly similar to a measure currently being considered in the Senate.
Other bills include the Effective Bank Regulation Act, which would increase regulatory stress tests from two scenarios to five. Meanwhile, the Fostering Accountability in Renumeration Fund Act of 2023 is another bill targeting executive compensation. The so-called FAIR Fund Act would require banks to use a portion of executive compensation to fund a compensation pool used to cover some incurred fines.
Other proposed bank reform bills address everything from executive stock sales to mandatory post-failure reports by regulators.
