Banking and Finance Law Daily Wrap Up, RECEIVERSHIPS—Senators revive bill to claw back executive pay when banks fail, (Mar 12, 2026)

By Carrie DeLeon

The bipartisan Senate bill would mandate that large bank executives surrender their salaries and bonuses if their bank fails.

Three years after the collapse of Silicon Valley Bank, a bipartisan group of U.S. senators, which includes Sens. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), reintroduced legislation to “ensure that big bank executives are not allowed to collect massive paychecks and bonuses, disregard prudent risk management, and walk away scot-free if the bank blows up.” The Failed Bank Executives Clawback Act of 2026 would ensure that the Federal Deposit Insurance Corporation has the authority to “hold executives of failed banks financially responsible for some of the costs those failures impose on the rest of the banking system and the economy,” according to a press release. The bill would allow the FDIC to claw back at least part of the compensation bank executives received over the three-year period preceding a bank’s failure.

“When big banks fail, weak regulators too often let the failed bank’s wealthy executives slip away into the night while American taxpayers foot the bill,” Warren said in a statement. “This bill helps ensure that failed bank executives are held accountable for their risk-taking — and that they forfeit the huge bonuses they got while driving their bank into the ground.” Hawley added, “Bank executives who make risky investments with customers’ money shouldn’t be permitted to profit in the good times, and then avoid financial consequences when things go south. “This legislation puts the executives’ own profits on the line, and that’s exactly as it should be.”

Similar legislation authorizing the FDIC to claw back certain compensation paid to executives was introduced in 2023 in response to the failure of Silicon Valley Bank (see Banking and Finance Law Daily, May 1, 2023). Lawmakers at the time said that CEOs and other bank executives shouldn’t be allowed to walk away with their hefty salaries, bonuses, and stock proceeds after their actions led to bank failures.

Co-sponsors of the reintroduced legislation include Sens. Catherine Cortez Masto (D-Nev.), Ruben Gallego (D-Ariz.), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), Mark Warner (D-Va.), Chris Van Hollen (D-Md.), Tina Smith (D-Minn.), Andy Kim (D-N.J.), Raphael Warnock (D-Ga.), John Fetterman (D-Pa.), Lisa Blunt Rochester (D-Del.), and Angela Alsobrooks (D-Md.). In addition, House Financial Services Committee Ranking Member Maxine Waters (D-Calif.) has reintroduced a package of bills originally introduced in 2023 that seek to address regulatory gaps and governance failures exposed by the 2023 banking crisis (see Banking and Finance Law Daily, Mar. 11, 2026).

Also to mark the three-year anniversary of SVB’s collapse, Sen. Warren and Rep. Maxine Waters (D-CA) sent a letter to Michelle Bowman, Vice Chair for Supervision of the Federal Reserve, questioning the status of the Fed’s investigation into Silicon Valley Bank’s executives for violating federal banking laws and regulations. “In the years leading up to its failure, SVB tripled in size, growing rapidly from less than $60 billion in total assets in 2019 to $209 billion by the end of 2022. Thanks to the big bank deregulation you championed during the first Trump Administration, SVB was free to load up on risk without sufficient guardrails and appropriate scrutiny. Notably, at the end of 2022, a staggering 94 percent of SVB’s total deposits were uninsured,” the lawmakers wrote.

They are asking Bowman to respond by March 24 to several questions regarding the Fed’s investigation into the conduct of the former executives of Silicon Valley Bank. “Your inaction signals to all current big bank executives that they too are above the law and will not face consequences for putting the stability of the banking system at risk,” the letter said.

Companies: Silicon Valley Bank

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