Advocates urge agencies to finish — not start over — pay-clawback rule

By  Claire Williams Ebrima Santos Sanneh

WASHINGTON — Finalizing the Dodd-Frank Act’s unfinished executive compensation rule might be a straightforward path to more easily punish the executives of failed banks in the wake of the Silicon Valley Bank and Signature Bank failures, but the regulatory process could be fraught with legal issues…Karen Petrou, managing partner at Federal Financial Analytics, said that the wide range of financial regulators required to approve the final rule, from banking agencies to market cops, has historically made it difficult for the rule to be finalized. Currently the Biden administration has control of all of the agencies except for the NCUA, which still has two of three board seats allocated to Republican members. “Sec.  956 required all the financial regulators to write a single rule,” Petrou said in an email. “That proved impossible  not only due to the difficulty of doing so in general, but also the very different missions of each agency subsequently complicated by Trump appointees after the election.”