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Democrats call on regulators to toughen clawback rule

Democrats on Oct. 5 urged federal regulators to strengthenexecutive compensation clawback rules following the scandal at

A group of 11 Democratic members of the House FinancialServices, including Ranking Member Maxine Waters, D-Calif., signed the letter.The letter focused on "the excessive level of discretion" under theSEC's proposedclawback rule, which allows boards of directors to make the ultimate decisionon triggering a clawback.

"Given the reluctance of many boards of directors topunish peer-group members within the senior executive class, we believe thatyour Agencies should require clawbacks in these instances," thecongressmen wrote in reference to "widespread misconduct," such asthe Wells Fargo case.

The letter was jointly addressed to the Federal Reserve, theOCC, the FDIC, the SEC, the National Credit Union Administration and theFederal Housing Finance Agency.

The Dodd-Frank Act required regulators write a new rulegoverning clawbacks, and the SEC issued an initial framework in 2011. In May2016, the SEC re-proposed the rule and started accepting comments. The commentperiod for the proposed rule closed July 22.