Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, and 10 Committee Democrats urged financial regulators to strengthen a proposed “clawback” rule regarding when a financial institution must revoke senior executives’ bonuses.
In a letter to the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, Federal Housing Finance Agency, and Securities and Exchange Commission, Democratic lawmakers expressed concerns with the “excessive level of discretion” granted to firms in executing clawbacks for misconduct, fraud, or misrepresentation in the proposed rule.
"We do not believe that strong public policy goals are served by giving large banks and other financial institutions the choice as to whether to clawback executive bonuses in the face of widespread misconduct."
Th letter states that there is a reluctance in the board of directors to punish senior management and advocates that the agencies provide "less optionality to covered institutions when it comes to holding senior executives accountable."
Read the letter.
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