Bonus Bonanza Needs to Be Reined In

“The big money is back on Wall Street” – New York Times, 2/23/10

Advocates Take to the Web to Weigh in to Restrain Banks from Rewarding Risky Behavior

Washington, DC – In light of Chairman Barney Frank’s hearing today on the outrageous compensation packages that the financial industry is racking in, Americans for Financial Reform and our coalition partner took to the web to have thousands of Americans weigh in on controlling these runway pay packages.

During the comment period, AFR and Moveon generated thousands of the 15,400 letters received supporting a Federal Deposit Insurance Commission proposal to have banks that hand out big bonuses for risky behavior to pay higher fees. The types of controls that the House has already passed, as well as any additional proposals they’re considering, and the rule the FDIC has proposed are key in changing the casino culture on Wall Street.  As the New York state comptroller’s report this week showed – revealing that bonuses for 2009 increased 17% – the greedy behavior of big banks hasn’t stopped at all. In fact, it’s getting worse.

Maureen Thompson, acting Executive Director, “We support the actions the FDIC is proposing to control risky behavior and sky high bonuses as well as the actions that the U.S. House of Representatives has already taken on executive compensation, including shareholders’ “say on pay.” We also agree with House Financial Services Chairman Barney Frank that more must be done. The mind-boggling compensation numbers unveiled by the New York Comptroller this week makes it abundantly clear that Wall Street believes nothing has changed.”

Heather Booth, Executive Director, Americans for Financial Reform: “What has changed is that Americans are ready for action. As shown by the overwhelming response to the FDIC proposed rule and other bonus backlash activity throughout the country, people are anxious for action in Washington. Congress must hold the banks responsible for the greedy and reckless conduct that wrecked our economy and force the banks – kicking and screaming all the way – back into supporting the real economy, providing credit to businesses so they can create jobs. Late last year, the House took action and we are heartened that Chairman Frank is now considering next steps.  Now it’s time for the Senate to focus on strengthening our financial system and preventing another financial crisis.”