Thursday, October 6, 2016

Democratic Lawmakers Call for Strengthening the Proposed Clawback Rule

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.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.