WASHINGTON— A bipartisan group of 14 U.S. senators has reintroduced legislation that would require the FDIC to claw back compensation from executives at failed large banks, reviving a post-Silicon Valley Bank reform effort that stalled in the last Congress.
The measure, the Failed Bank Executives Clawback Act of 2026, is being led by Sen. Elizabeth Warren (D-MA) and Sen. Josh Hawley (R-MO and would require the FDIC to recover all or part of the compensation paid to executives of banks with $10 billion or more in assets during the three years before a failure.
The bill’s sponsors said it is aimed at preventing senior executives from collecting bonuses and stock gains while taxpayers, the Deposit Insurance Fund and the broader banking system absorb the fallout of a collapse.
According to the Senate Banking Committee minority staff, the bill is co-sponsored by Sens. Catherine Cortez Masto, Ruben Gallego, Katie Britt, Kevin Cramer, Mark Warner, Chris Van Hollen, Tina Smith, Andy Kim, Raphael Warnock, John Fetterman, Lisa Blunt Rochester and Angela Alsobrooks—bringing total backing to 14 senators.
The reintroduction comes on the third anniversary of Silicon Valley Bank’s failure, which lawmakers continue to cite as a case study in executive incentives misaligned with risk management. The Washington Post reported the bill would make clawbacks mandatory rather than discretionary and could apply to bonuses, stock-sale proceeds and other compensation paid before a collapse.
While the proposal has bipartisan support, it faces uncertain odds in a Congress where many banking policy discussions are centered on regulatory relief for smaller institutions rather than tougher penalties for large-bank executives.