This bill gives federal financial regulators new tools to hold bank executives and board members accountable when their negligence causes financial loss and a bank fails. It lets the Federal Deposit Insurance Corporation (FDIC) recover pay from current or former executives and directors during a conservatorship or receivership. The FDIC may recover compensation paid in the two years before it was appointed, and there is no time limit when fraud is involved. The bill directs the FDIC to make rules that define "compensation," including salary, bonuses, benefits, severance, deferred pay, golden parachutes, and profits from selling bank securities. The bill also extends similar clawback authority to receivers under the orderly liquidation authority for covered financial companies.
The bill adds authority for regulators to issue written notices to suspend, remove, or bar any institution-affiliated party from participating in any insured depository institution if that party negligently caused financial loss to a failed bank. It adds civil money penalties for executives or directors whose negligence caused a failed insured depository institution: up to $25,000 per day for negligent conduct, and larger penalties (up to existing maximums in law) for knowing or reckless conduct. The bill includes conforming changes to related FDIC provisions and a statement that it should not be read to limit existing enforcement powers. The bill’s "Sense of Congress" section urges regulators to fully use their enforcement tools and to finalize strong clawback rules required by prior law.
No publicly available information on estimated budgetary effects or costs to the federal government is included in the bill text. The bill does specify civil penalty amounts (for example, up to $25,000 per day for negligent conduct), but it does not include cost estimates or budgetary analysis.
The bill’s text and its "Sense of Congress" say regulators should fully use enforcement tools to hold executives and board members accountable for misconduct that contributes to bank failures. Supporters in the bill text call for finalizing strong clawback rules required under prior law and give regulators specific authorities to recover compensation, impose fines, and remove or bar individuals from banking after failures.
No publicly available information on opposition views or arguments is included in the bill text or metadata.