Florida bill enacts restrictions on people who’ve served on the board of an insolvent bank

TALLAHASSEE, Fla. – A newly-introduced bill would prohibit someone who has served on the board of directors of a bank that has become insolvent from serving on the board of directors for another bank.

The identical bills, HB 543 and SB 542, were introduced by Sen. Blaise Ingoglia, R-Spring Hill, and Rep. Dean Black, R-Jacksonville.

The legislation would disqualify an individual from serving on the board of directors of a bank for five years after previously serving at a bank that has become insolvent.

“Florida consumers deserve competent, fiscally responsible oversight over our banks and financial institutions,” Black said. “Under this bill, we will ban executives who have been party to any bank failure from serving on the board of a Florida bank.”

Three regional banks in the U.S. suddenly collapsed earlier this year including Silicon Valley Bank in California on March 10, and two days later Signature Bank in New York collapsed. First Republic Bank in California collapsed in May.

According to an August Congressional Research Service report, these three bank closures reflect some of the largest bank failures in U.S. history.

“Floridians deserve to have trust in our financial institutions,” Ingoglia said. “It’s simply not fair that individuals that have contributed to putting deposits at risk be allowed to continue that behavior.

The closures of Silicon Valley Bank, Signature Bank and First Republic Bank have brought about regulatory reviews by the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System, multiple congressional hearings, legislative proposals by congress members and calls for action by President Joe Biden, according to the Congressional Research Service report.

“This pro-consumer piece of legislation ensures that bad actors, who put taxpayers and depositors at risk, cannot be in a position to do so again,” Ingoglia said.