The RECOUP Act (S.2190), which passed the Senate Banking Committee in June by a bipartisan 21-2 vote, would greatly expand the federal bank agencies’ authority to remove and permanently ban officers from the banking industry if it becomes law.
While styled as a bill to hold executives accountable for conduct that leads to a bank failure — a direct legislative response to the failures this spring — the act also includes changes to the agencies’ long-standing prohibition authority that would permit far more flexibility as to how and when they bring these cases. Importantly, these aspects of the bill would not only affect directors and officers of banks that are likely to, or have, failed.
