Top executives at lenders that collapse risk having their bonuses clawed back under legislation that’s gaining bipartisan support in the US Congress.

The bill approved Wednesday by the Senate Banking Committee would allow the Federal Deposit Insurance Corp. to recoup bonuses that senior executives received in the two years before a bank failure and increase certain penalties for them.

The 21-2 vote reflects anger from both sides of the political aisle at executives from Silicon Valley Bank, Signature Bank and First Republic Bank who received generous bonuses even as the firms cratered earlier this year. It also suggests the bill would likely pass the full Senate.

“Bank executives who take on too much risk and crash their banks shouldn’t get to land on their feet, they shouldn’t get to keep the profits they made by making bad bets with other people’s money, and they shouldn’t get to take their bad behavior to another bank,” said Sherrod Brown, an Ohio Democrat who chairs the Senate Banking Committee.

The bill, introduced by Brown and Tim Scott, the panel’s senior Republican, still needs the approval of the Senate and House of Representatives.

Scott said the bill was targeted at bank executives. But an amendment, he said, would bring more transparency to bank supervision. Among the provisions included are requirements for detailed reports to Congress from bank regulators in the case of failed institutions, and codifying semiannual reports from the Federal Reserve to include metrics on the effectiveness of its workforce, according to his office. Many Republicans have partly blamed the regulators for not properly monitoring the ailing lenders.

Representative Maxine Waters, the top Democrat on the House Financial Services Committee, announced a plan to also claw back compensation of executives at failed banks. She also unveiled legislation to expand stress tests and restrict stock sales by executives if their banks aren’t resolving regulators’ concerns in a timely fashion.

Critics have said former executives at troubled banks neglected to manage mounting risks, including quickly rising interest rates. FDIC Chairman Martin Gruenberg has vowed to move on long-delayed rules to clamp down on the industry’s pay packages.

(Updates starting in the second paragraph with details on bill.)

Author: Lydia Beyoud and Steven T. Dennis