Bank Failure Accountability Act
Sponsored By: Representative Tlaib, Rashida [D-MI-12]
Introduced
Summary
Creates mandatory long-term pay deferments for senior staff at big financial firms to hold executives financially accountable and to build funds that can pay fines or protect depositors.
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- Covered institutions must create a deferment fund and place deferred pay there. Any financial institution with more than $1 billion in consolidated assets is covered and the fund must be the first source to pay civil or criminal fines.
- Senior employees face yearly deferrals equal to at least 50 percent of the part of their pay that exceeds seven times the firm’s median worker pay. The rule targets employees paid over $1 million and uses top-percent and authority-to-expose tests at very large firms.
- Deferment periods rise with size: regulators set the period for firms under $10 billion, two years for $10–$50 billion, six years for $50–$250 billion, and eight years for $250 billion or more. If a depository or credit union fails, the fund must be used to prevent depositor losses before tapping the Deposit Insurance Fund or the National Credit Union Share Insurance Fund. Institutions must cancel deferred pay that cannot be repaid and regulators including the Federal Reserve, OCC, FDIC, FHFA, NCUA, and SEC will write implementing rules.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 1 costs, 1 mixed.
Required pay deferral for senior employees
If enacted, covered financial institutions would each year defer at least 50% of the amount a senior employee is paid above seven times the firm's median pay. The deferred amount would go into a special deferment fund. "Senior employee" would include those paid over $1,000,000 and other size-based tests tied to firm assets and pay ranks. Deferment periods would vary by size: regulator-set for firms under $10 billion, 2 years for $10B–$50B, 6 years for $50B–$250B, and 8 years for $250B or more.
Special fund to hold deferred pay
If enacted, each covered firm would be required to place all deferred compensation into a dedicated deferment fund that can hold only deferred pay. The fund must pay civil or criminal fines first. If a depository or credit union fails, the fund must be used to prevent depositor losses before tapping federal deposit insurance funds. After deferment periods end, firms could pay deferred amounts only if funds remain, and firms must cancel unpaid deferred pay if the fund is insufficient. Federal regulators would issue rules to implement these requirements.
Sponsors & CoSponsors
Sponsor
Tlaib, Rashida [D-MI-12]
MI • D
Cosponsors
Rep. Lynch, Stephen F. [D-MA-8]
MA • D
Sponsored 6/25/2026
Rep. Lee, Summer L. [D-PA-12]
PA • D
Sponsored 6/25/2026
Rep. Green, Al [D-TX-9]
TX • D
Sponsored 6/25/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov