House Democrats introduced a bill that would codify regulatory requirements that large banks have a chief risk officer.
The bill, sponsored by Rep. Sean Casten (D-Ill.), would require large banks, within seven days of a vacancy, to submit a plan to their regulator on how they would search for and hire a chief risk officer.
Should the position remain vacant after 60 days, the bank must notify the public and be subject to an automatic cap on their asset growth until the vacancy is filled, according to the bill.
“It was a clear mistake for Silicon Valley Bank to be without a chief risk officer during a critical nine-month period preceding its collapse, particularly for a bank that held a high percentage of uninsured deposits in historically less stable industries,” Casten said in a statement.
This bill was among several introduced in reaction to the collapse of Silicon Valley Bank, Signature Bank, and First Republic earlier this year.
Another bill introduced by Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, would give regulators “claw back” authority to reclaim compensation and impose fines against executives found to have contributed to their bank’s failure.
“The failures of Silicon Valley Bank, Signature Bank and First Republic Bank make clear that it is past time for legislation aimed at strengthening the safety and soundness of our banking system and enhancing bank executive accountability,” Waters said in a statement. “Congress must not sit idly by. I’m proud of the hard work of committee Democrats to address these issues with our first round of legislation responding to these bank failures.”
The Senate Banking Committee has moved forward with its own version of the bank executive compensation claw back bill.