Dear John,

When Silicon Valley Bank crashed earlier this year, CEO Greg Becker deployed his golden parachute and nabbed himself $3.6 million by selling his stock just before it lost most of its value. The ultimate inside move.

Similarly, executives at First Republic Bank grabbed their $12-million life jackets in the months before the bank failure, keeping them buoyant as their enterprise sank, leaving creditors and customers underwater.

Now, in a rare display of bipartisanship, the Senate Banking Committee has passed the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act, which would allow regulators to recoup bank executives’ compensation from two years prior to a bank failure.

Now that the bill has passed the committee, this is the time to send a direct message to your senators urging them to pass it into law. It’s time to stop rewarding failed bank leaders with profits from stock sales based on inside knowledge of their own failures!

It’s rather remarkable to see Republicans joining Democrats to support this game-changing financial reform. Their support is a sign of how sorely needed the legislation is. It’s not right for bank executives to benefit so boldly from their own malfeasance. Such irresponsible, self-serving behavior must carry consequences.

Putting these guardrails in place could help discourage the risky decisions leading to the banks’ collapse in the first place. These disincentives are important to help prevent conditions that could lead to a repeat of the disastrous 2008 financial meltdown.

Consumers, depositors, bank employees, and the public at large all stand to benefit from giving regulators the ability to confiscate these ill-gotten gains and repurpose them for the public good.

Send a message to your senators urging them to pass the RECOUP Act now.

Thank you for supporting corporate responsibility and financial common sense.

Robert Reich
Inequality Media Civic Action