Big business and banks are just as corrupt and eager to shovel profits to senior executives 10 years after the landmark banking reform legislation known as Dodd-Frank as they were during the 2008 crisis, a new report warns, because the bill's regulations on executive pay remain unimplemented.
"White collar crime pays, and until Congress enacts the rules to change it, we'll continue to see top executives raking in off catastrophes of their own making," report author Bartlett Naylor, financial policy advocate at Public Citizen, said in a statement.
"Income and wealth inequality are bad for the economy, even for the rich. Under diminishing marginal utility theories, simply put, if income clots with the few at top, they simply can’t spend all that money—circulate it—in the economy." https://t.co/wELtGV0YLU via @Public_Citizen
— Nomi Prins (@nomiprins) July 21, 2020
The report lists billions in bonus cash paid out to executives over the past decade despite Dodd-Frank's regulatory framework banning such cash-outs.
"It's 2008 all over again," said Naylor. "Congress is bailing out Big Business and enriching CEOs while workers scrape by as the economy lurches downward in a pandemic."
Next time, Congress, enact the law directly; don't ask regulators to implement. They've gone 9 years passed deadline on pay reform in #DoddFrank10
— Bartlett Naylor (@bartnaylor) July 21, 2020
According to Public Citizen:
One of the key rules mandated under Dodd-Frank addresses unbridled senior banker pay, but it has remained unimplemented—nine years after the deadline Congress set—thanks to lobbying from the banking industry, the report found. Section 956 calls for a ban on all "inappropriate" pay structures that could lead to "excessive risk taking." Meanwhile, money that Congress allocated to bail out bank creditors in 2008 effectively went to bankers, while more than 10 million lost their homes, their jobs and their savings.
The group's executive vice president, Lisa Gilbert, called bank executives "the poster boys for misbegotten pay."
"If we don't implement guardrails on executive compensation and stop incentivizing corporate bad behavior, we haven't learned anything since 2008," said Gilbert.