Legislation would increase accountability and shield Arizona taxpayers from financial exposure to the banking system
WASHINGTON – Arizona senior Senator Kyrsten Sinema cosponsored the Deliver Executive Profits on Seized Institutions to Taxpayers (DEPOSIT) Act – legislation that would claw back profits made by bank executives on the sale of stocks and compensation bonuses earned within 60 days of a bank failure.
“Our legislation provides accountability for bank mismanagement – and ensures the proceeds go towards protecting Arizona taxpayers from having to pay for any bank bailouts,” said Sinema, a member of the Senate Banking Committee.
If a Federal Deposit Insurance Corporation (FDIC) member bank fails, the DEPOSIT Act – legislation introduced by Democratic Senator Richard Blumenthal (Conn.) – would impose a tax on the profits made from the sale of stocks and compensation bonuses earned by certain bank executives within 60 days of a collapse. Specifically, the legislation would claw back 90 percent of executive compensation bonuses and 100 percent of the profits earned from stock sales. All revenues generated from this tax will be returned to the FDIC insurance fund and would apply to all stock sales and bonuses earned on or after March 1, 2023.
Before the Silicon Valley Bank collapse, multiple key executives sold a large number of shares. The Sinema-backed bill intends to capture bonuses and stock sales made by SVB executives – holding them accountable by ensuring they pay into the FDIC.
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