
the issue
The lending and market behavior of banks were a popular target in the Great Recession era, and they’re coming back under bipartisan scrutiny in Washington these days. One prominent example: President Donald Trump’s recent broadside against Bank of America and JPMorgan for what he claimed was discrimination against conservatives.
Chief among big banks’ critics on the left is Sen. Elizabeth Warren, D-Mass., who recently penned a Wall Street Journal op-ed offering an olive branch to the Trump administration and Republicans on economic policy. Among her suggestions for collaboration was a proposal to rein in risky behavior by clawing back compensation from bank executives who preside over bank failures.
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the bond
The idea started gaining bipartisan traction in the wake of the 2023 collapses of Silicon Valley Bank and Signature Bank. After those failures, Warren and a bipartisan group led on the GOP side by Missouri Sen. Josh Hawley introduced legislation to claw back all or part of the compensation received by executives during the five years that preceded a bank’s failure.
The House version of the legislation was sponsored by Democratic Reps. Katie Porter, Marie Gluesenkemp Perez, and (now-Sen.) Ruben Gallego, and Republican Reps. Ken Buck (now retired) and Victoria Spartz.
A similar proposal called the Recoup Act advanced out of the Senate Banking Committee in 2023 with support from the panel’s leaders, including current Chairman Tim Scott, R-S.C. It called for a shorter, two-year compensation clawback period. The full Senate never took it up.
Now, Warren is seeking to revive the measure, arguing that legislation like the Recoup Act is necessary to prevent another financial crisis.
“There’s a bipartisan bill on the table to limit Wall Street risk-taking by clawing back compensation from big bank CEOs who blow up their banks,” Warren said in a statement to Semafor.
She added that she is in discussions with fellow committee Democrats — whom she now leads — and Republicans about moving forward on that bill and other “critical reforms.”
Step Back
Despite bipartisan desire to go after big banks, it’s unlikely that legislation resembling the Recoup Act will pass this Congress. The proposal wasn’t among the priorities for the Banking panel laid out by Scott earlier this year; financial services-minded Republicans have forecast plans to focus more on deregulation to make the most of their full control of Washington.
“My sense here is that, just from an urgency perspective, if lawmakers couldn’t move this after the banking turmoil in March 2023, they’re sure as heck not going to have urgency around the issue right now,” Isaac Boltansky, director of policy research at BTIG, told Semafor.
Boltansky also pointed to persistent policy concerns among Republicans about provisions that would allow for the removal of senior bank executives for misconduct.
The alignment of Capitol Hill’s ideological right and the left on economic consolidation shouldn’t be ignored, however. It has also manifested in other Warren-Hawley partnerships, such as legislation they co-sponsored together that would prohibit the same company from owning pharmacies and pharmacy benefit managers.
“I subscribe to the belief that the ideological spectrum is bent into the shape of the horseshoe,” Boltansky said. “And you can put some bank issues in there, it’s just that they’re mad at banks for different reasons.”

The View From tim scott
“Since the Spring 2023 bank failures, Chairman Scott has worked in a bipartisan manner to hold both regulators and executives of failed banks accountable,” Jeff Naft, communications director for the Banking Committee, told Semafor.
“Moving forward, Chairman Scott will continue to engage with his colleagues on both sides of the aisle to find solutions to ensure our banking system remains resilient, and any future proposal must increase accountability among financial regulators.”

Notable
- The staunchly conservative Hawley has another small progressive turn coming, as he eyes a major pro-union proposal, according to Axios.