Earlier this month, the US Senate Banking, Housing, and Urban Affairs Committee approved the "Recovering Executive Compensation From Unaccountable Practices Act," also known as the RECOUP Act, with bipartisan support. Sponsored by Senators Sherrod Brown and Tim Scott, the legislation proposes to grant federal bank regulators expanded powers to hold senior executives accountable for non-compliance or bank failures.
The RECOUP Act would enable regulators to ban executives from the industry and claw back compensation and trading profits. It also raises the maximum civil money penalty for reckless conduct by senior executives to $3 million, and allows regulators to recover profits obtained by senior executives through the sale of securities of the failed institution or its holding company.
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