Former Vice President Mike Pence's political advocacy group is lobbying against a bipartisan bill that would claw back compensation from CEOs of banks that fail after it cleared the Senate Banking Committee last week.

The RECOUP Act, led by Senate Banking Committee Chairman Sherrod Brown (D-OH) and ranking member Tim Scott (R-SC), would empower regulators to claw back bank executives’ pay from the two years before their 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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Advancing American Freedom, the 501(c)4 nonprofit group Pence founded in 2021, is calling the bill "Warren-lite," a reference to Sen. Elizabeth Warren's (D-MA) version of the legislation, which has the backing of Sen. J.D. Vance (R-OH).

"The Brown-Scott clawback bill would give bank regulators arbitrary authority to claw back executive pay when banks fail but does nothing to hold regulators accountable for sleeping on the job," the group said in a memo on the bill published Tuesday.

The goal of both the Brown-Scott effort and the Warren-Vance bill is to prevent bank failures by disincentivizing executives from allowing their institutions to go under. The two Senate duos introduced their respective measures in the wake of Silicon Valley Bank’s sudden failure, which led to the collapse of other financial institutions and caused havoc in the overall banking system.

The AAF memo argued that the Brown-Scott legislation, which passed through the Banking Committee last week with strong bipartisan support, "serves as a vehicle for progressive policy priorities." It also suggested that conservatives "should address and preempt the causes of bank failures, starting with the catastrophic mismanagement of the Fed. This should include heavy scrutiny of the Fed’s dual mandate and its special exemptions from federal oversight."

AAF Chairman Marc Short, who served as Pence's chief of staff during his vice presidency, condemned both bipartisan efforts in a statement last week as the bills gained traction in committee.

“Earlier this year we witnessed the failure and subsequent taxpayer bailout of three federally regulated banks as a result of regulators asleep at the wheel,” Short's statement read. “Senator Warren introduced a bill allowing bank regulators to claw back executive pay when banks fail, and now Senator Sherrod Brown and Senator Tim Scott have introduced a bill that is virtually identical and, in some ways, worse. These two bills are cut from the same cloth and their effects would be equally damaging to the private sector. "

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Should the bill pass the Senate, it faces an uncertain future in the House of Representatives. Republicans control the chamber by a small majority, and many GOP lawmakers have come out against the bill.

Zachary Halaschak contributed to this report.