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HR7887119th CongressWALLET

Incentivizing Safe and Sound Banking Act

Sponsored By: Representative Waters, Maxine [D-CA-43]

Introduced

Summary

Blocks senior bank executives from selling stock they received as compensation while their bank faces unresolved supervisory problems. The bill would let federal banking agencies add sale bans to enforcement orders and create an automatic prohibition tied to supervisory ratings and notices for large banks.

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  • Senior executives and recent former officers: They may be barred from selling securities of the bank or its affiliates that they got as compensation until regulators sign off.
  • Large banks and their affiliates: The automatic ban targets institutions with more than $50 billion in assets and triggers if the bank has a 3, 4, or 5 rating or receives a matter requiring immediate attention and misses remediation deadlines.
  • Federal regulators: Agencies would gain explicit authority to include sale prohibitions in cease-and-desist orders and an automatic-stop mechanism to increase enforcement leverage.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 1 costs, 0 mixed.

Ban on executive stock sales at big banks

This bill would let regulators bar senior executives from selling stock they got as pay at banks or bank holding companies with more than $50,000,000,000 in consolidated assets. The ban would trigger if the bank has a 3, 4, or 5 rating under the uniform exam system, or if the agency issues a "matter requiring immediate attention" and the bank misses the agency fix deadline. The ban would cover securities of the bank and its affiliates that current or former officers, directors, or institution-affiliated parties received as compensation. The prohibition would remain until the appropriate Federal banking agency says the matter is resolved. The bill would also allow agencies to include similar sale bans in cease-and-desist orders.

Sponsors & CoSponsors

Sponsor

Waters, Maxine [D-CA-43]

CA • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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