This bill, introduced in March 2026, would strengthen federal regulators' ability to hold bank executives accountable when their negligence causes a bank to fail. The legislation grants the Federal Deposit Insurance Corporation and other banking regulators the power to recover compensation paid to current or former executives and directors during the two years before a bank failure, with no time limit for cases involving fraud. The bill also allows regulators to ban executives whose negligence caused financial losses from working at any insured bank in the future and imposes new civil penalties of up to $25,000 per day for negligent conduct and higher amounts for knowing or reckless behavior that contributed to a bank's failure. The legislation specifically references the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank, and calls on federal banking regulators to finalize strong clawback rules required under earlier financial reform laws. The bill does not establish specific funding mechanisms or implementation timelines beyond directing the regulators to create rules to carry out the new authorities.
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