Every week we put our faith into action. This week we are focusing on incentive-based executive pay for CEOs of financial institutions that tends to encourage risky behavior, and writing our members of Congress demanding that they pressure the Federal Reserve to do its job and finally curb risky behavior by financial executives. 

One small, but critical component of Dodd-Frank is Section 956. Section 956 directed federal regulators to implement rules banning executive pay incentives that encourage risky behavior. However, 14 years later, no such rule has been implemented.

The 2008 financial crisis decimated the retirements and home prices of many working Americans. The Dodd-Frank Act established urgently needed guardrails to prevent another financial catastrophe and to curb the excessive risk-taking Wall Street CEOs were engaging in, which led to the crisis.

Earlier this year, Federal Reserve Chair Jerome Powell appeared before Congress and had no good explanation for their lack of action. In an exchange with Chairman Jerome Powell, Senator Elizabeth Warren (D-MA) said the following:¹

“Chair Powell, the law does not say: Jerome Powell, in his infinite wisdom, should decide if we have a problem with executive compensation. The law, passed 14 years ago, says executive pay is a problem that threatens the stability of our economy, so write the rules to rein them in.

Finally, finally, the other financial regulators have proposed such a rule, but the Fed has not joined.

Chair Powell, I understand why the ten biggest banks in the country like your approach. You let them do whatever they want, but you don’t work for the giant banks. You work for the American people. I urge you to do your job.”

Even after the 2023 banking crisis — which can be traced directly to risky behavior on the part of executives at Silicon Valley Bank and others — we still don’t have regulations in place to protect consumers, depositors, and the public from executives’ excessive risk-taking.

This is completely unacceptable. It is outrageous that the Federal Reserve or the American taxpayer are expected to constantly foot the bill for the misbehavior of Wall Street CEOs. Senator Warren is right to urge Jerome Powell to do his job.

Over the past year we have seen the collapse of Silicon Valley Bank and others due to the risky behaviors of their CEOs. Wall Street has proven time and time again that it cannot regulate itself. Congress must compel the Fed to act.

We are demanding that the rest of Congress join Senator Warren and pressure the Federal Reserve to fully implement Section 956 as mandated by the Dodd-Frank Act. Send a letter to Congress demanding they put pressure on the Fed to do its job now.

¹ At Hearing, Warren Slams Powell for Cozying-Up to Big Banks and Inaction on Executive Compensation Reform, Calls for Rulemaking that Protects Stability of the American Economy

Options to Take Action:

1. 1. 1. Sign a letter at the Action Table on Sunday.
      2. Click on a link to download an Action Letter for either Within CA or Outside CA to sign and mail.
      3. Click on this link to take action at the Patriotic Millionaires website.

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Please continue to urge your Representatives, Senators and the President to demand a ceasefire in the Israel-Hamas War, and pray for the innocents. (download a phone script here)

#ceasefire    #releaseallhostages

Also, as we mourn all those lost to violence, we continue to pray for peace in the Holy Land and for our Episcopal Relief & Development partners who are working to serve all people who come to them seeking treatment and safety. Your generous support of the ERD Middle East Fund will help to address immediate and long-term needs created by the Israel-Hamas war through locally-led partnerships. Donate to the ERD here.

Contact the White House at https://www.whitehouse.gov/contact/ or leave a phone comment at 1-202-456-1111.

If you ever need to look up your member of the U.S. House of Representatives or your U.S. Senators check here: www.house.gov and www.senate.gov.

To find contact information for your California State Senator or California State Assemblymember check here: www.senate.ca.gov and www.assembly.ca.gov.