Congress moves to claw back pay from executives whose negligence tanked banks

What it does

This bill gives federal banking regulators new power to claw back compensation (salary, bonuses, severance, stock gains) from bank executives and board members whose negligence caused a bank to fail, and to ban them from working in banking again. It also imposes daily civil fines up to $25,000 per day for negligent conduct and unlimited fines for knowing/reckless conduct. The bill targets executives at Silicon Valley Bank, Signature Bank, First Republic Bank, and similar failed institutions.

Why we flagged it

The bill's core function is to expand regulatory tools for holding bank executives personally liable for negligence-driven failures through compensation clawback, removal authority, and civil penalties. It is enforcement-focused, not a tax or subsidy measure.

What the text implies

• The 2-year lookback window for clawback may miss compensation earned earlier in a multi-year period of negligent conduct, creating a potential gap in recovery scope.
• The bill defines 'negligence' without statutory precision, delegating interpretation to regulators; this may create uncertainty about what conduct triggers liability and could lead to inconsistent enforcement.
• Daily civil penalties ($25,000/day for negligence, unlimited for knowing/reckless conduct) could accumulate to millions over a multi-year failure period, potentially exceeding an individual's lifetime earnings and raising due-process questions.
• The bill does not explicitly address whether clawed-back funds go to the FDIC, depositors, or a general fund, leaving the distribution mechanism unclear.
• Removal authority ('prohibition from participation in any manner') is extremely broad and may apply to any banking-adjacent role, potentially extending beyond traditional executive positions.

Who it affects

Ordinary citizens benefit from stronger accountability for executives whose negligence destroys banks, wipes out uninsured deposits, and triggers taxpayer-funded rescues. Clawback authority and removal powers create real consequences for failed leadership and may deter reckless risk-taking. The public bears the cost of bank failures; this bill shifts some accountability back to decision-makers.

Who stands to gain

• Federal Deposit Insurance Corporation (FDIC) — expanded enforcement authority and potential recovery
• Uninsured depositors at failed banks — potential recovery of losses through clawed-back executive co
• Surviving banks — reduced competitive pressure from executives banned from the industry

Named in the bill

Silicon Valley Bank, Signature Bank, First Republic Bank, Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), Federal Housing Finance Agency (FHFA), National Credit Union Administration (NCUA), Dodd-Frank Wall Street Reform and Consumer Protection Act, Investor Protection and Securities Reform Act of 2010

Where it stands

• Mar 9, 2026 — Introduced · Congress.gov: “Introduced in House”
• Mar 9, 2026 — Referred to House Committee on Financial Services · Congress.gov: “Referred to the House Committee on Financial Services”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.