The Senate Banking Committee announced that it will be debating a bill to punish executives of big banks that end up failing. The legislation is bipartisan, meaning it has better odds to become law.

Chairman Sherrod Brown (D-OH) and Ranking Member Tim Scott (R-SC) said on Thursday night that they had reached an agreement on legislation, the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act. The goal of the bill is to prevent bank failures by disincentivizing executives from allowing their institutions to go under.

“Americans have watched executives take their money, run banks into the ground, and get away with it too many times before. It’s time for CEOs to face consequences for their actions, just like everyone else,” Brown said.

Specifically, the legislation would give regulators the power to claw back bank executives’ compensation from the two years prior to a firm's collapse. In the event of a failure, executives might also be forced to hand over their bonuses and profits from the sale of bank stock.

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Additionally, the $1 million civil penalty that regulators charge executives who “recklessly” violate the law would be increased to $3 million.

“The recent bank failures didn’t happen in a vacuum – the banks’ executives failed to manage their risk, regulators failed to exercise their supervisory responsibilities, and the Biden administration failed to stop spending, which led to rising interest rates,” said Scott.

The news comes about three months after the sudden collapse of Silicon Valley Bank, which was taken over by the Federal Deposit Insurance Corporation in March.

SVB’s collapse created turmoil in the banking system and sparked fears that it could start a contagion leading to a chain of failures. Since SVB’s downfall, other banks have met their demise, but the fallout was contained in part through the federal government's decision to back all deposits in Silicon Valley Bank and Signature Bank, which also failed, including those in excess of the FDIC’s $250,000 threshold.

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The Fed has said that SVB leadership failed to manage basic interest rate and liquidity risk, although it did acknowledge that Fed supervisors failed to take forceful enough action to curb risks in the lead-up to the failure.

Because the latest legislation has support from both Republicans and Democrats, it is likely to end up getting an affirmative floor vote.