II 

118TH CONGRESS 

1ST SESSION S. 1181 

To amend the Federal Deposit Insurance Act to improve financial stability, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 18, 2023 

Mr. REED (for himself and Mr. GRASSLEY) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Federal Deposit Insurance Act to improve 

financial stability, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bank Management Ac5 countability Act’’. 

6 SEC. 2. SYSTEMIC RISK DETERMINATION. 

7 (a) IN GENERAL.—Section 13(c)(4)(G) of the Fed8 eral Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is 

9 amended by adding at the end the following: 


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1 ‘‘(vi) RECOUPMENT OF COMPENSA2 TION FROM SENIOR EXECUTIVES AND DI3 RECTORS.— 

4 ‘‘(I) IN GENERAL.—The Corpora5 tion, as receiver or conservator of an 

6 insured depository institution under 

7 clause (i), may recover from any cur8 rent or former senior executive or di9 rector of the insured depository insti10 tution, or of a covered affiliate with 

11 respect to the insured depository insti12 tution, who is substantially respon13 sible for the failed condition of the in14 sured depository institution, any com15 pensation received during the 2-year 

16 period preceding the date on which 

17 the Corporation was appointed as the 

18 receiver or conservator of the insured 

19 depository institution, except that, in 

20 the case of fraud, no time limit shall 

21 apply. 

22 ‘‘(II) COST CONSIDERATIONS.— 

23 In seeking to recover any compensa24 tion under subclause (I), the Corpora25 tion shall weigh the financial and deVerDate Sep 11 2014 05:49 Apr 20, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1181.IS S1181

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1 terrent benefits of that recovery 

2 against the cost of executing the re3 covery. 

4 ‘‘(III) PERSONAL LIABILITY.— 

5 Any liability insurance policy for a 

6 senior executive or director described 

7 in subclause (I) shall exclude from 

8 coverage any liability under this 

9 clause. 

10 ‘‘(vii) PROHIBITION AUTHORITY.— 

11 ‘‘(I) IN GENERAL.—The Corpora12 tion may take any action authorized 

13 by subclause (II), if the Corporation 

14 determines that— 

15 ‘‘(aa) a senior executive or a 

16 director of an insured depository 

17 institution with respect to which 

18 the Corporation has taken action 

19 or provided assistance under 

20 clause (i), or of a covered affiliate 

21 with respect to such an insured 

22 depository institution, before the 

23 appointment of the Corporation 

24 as receiver or conservator, has, 

25 directly or indirectly— 


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1 ‘‘(AA) violated any law 

2 or regulation; 

3 ‘‘(BB) violated any 

4 cease-and-desist order that 

5 has become final; 

6 ‘‘(CC) violated any con7 dition imposed in writing by 

8 a Federal agency in connec9 tion with any action on any 

10 application, notice, or re11 quest by the insured deposi12 tory institution or covered 

13 affiliate (as applicable) or 

14 the senior executive or direc15 tor (as applicable); 

16 ‘‘(DD) violated any 

17 written agreement between 

18 the insured depository insti19 tution or covered affiliate 

20 (as applicable) and the Fed21 eral agency described in 

22 subitem (CC); 

23 ‘‘(EE) engaged or par24 ticipated in any unsafe or 

25 unsound practice; or 


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1 ‘‘(FF) committed or en2 gaged in any act, omission, 

3 or practice that constitutes a 

4 breach of the fiduciary duty 

5 of that senior executive or 

6 director; and 

7 ‘‘(bb) by reason of the viola8 tion, practice, or breach de9 scribed in any subitem of item 

10 (aa), that senior executive or di11 rector has received financial gain 

12 or other benefit, and that viola13 tion, practice, or breach contrib14 uted to the failure of the insured 

15 depository institution. 

16 ‘‘(II) AUTHORIZED ACTIONS.— 

17 The Corporation may serve upon a 

18 senior executive or director with re19 spect to whom the Corporation has 

20 made a determination under subclause 

21 (I) a written notice of the intention of 

22 the Corporation to prohibit any fur23 ther participation by that individual, 

24 in any manner, in the conduct of the 

25 affairs of any financial company for a 


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1 period of time determined by the Cor2 poration to be commensurate with 

3 that violation, practice, or breach, ex4 cept that such period shall be not less 

5 than 2 years. 

6 ‘‘(viii) DEFINITIONS.—In this sub7 paragraph: 

8 ‘‘(I) COMPENSATION.—The term 

9 ‘compensation’ means any direct or 

10 indirect financial remuneration re11 ceived from an insured depository in12 stitution, or from a covered affiliate 

13 with respect to an insured depository 

14 institution, including salary, bonuses, 

15 incentives, benefits, severance pay, de16 ferred compensation, golden parachute 

17 benefits, benefits derived from an em18 ployment contract or other compensa19 tion or benefit arrangement, per20 quisites, stock option plans, post-em21 ployment benefits, profits realized 

22 from a sale of securities in the insured 

23 depository institution or the covered 

24 affiliate (as applicable), or any cash or 

25 noncash payments or benefits granted 


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1 to or for the benefit of a senior execu2 tive or director. 

3 ‘‘(II) COVERED AFFILIATE.—The 

4 term ‘covered affiliate’ means, with 

5 respect to an insured depository insti6 tution, any— 

7 ‘‘(aa) bank holding company 

8 (as defined in section 2(a) of the 

9 Bank Holding Company Act of 

10 1956 (12 U.S.C. 1841(a))) that 

11 controls the insured depository 

12 institution; 

13 ‘‘(bb) savings and loan hold14 ing company (as defined in sec15 tion 10(a) of the Home Owners’ 

16 Loan Act (12 U.S.C. 1467a(a))) 

17 that directly or indirectly controls 

18 the insured depository institu19 tion; 

20 ‘‘(cc) subsidiary of the in21 sured depository institution; or 

22 ‘‘(dd) affiliate (as defined in 

23 section 2 of the Bank Holding 

24 Company Act of 1956 (12 U.S.C. 


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1 1841(k))) of the insured deposi2 tory institution. 

3 ‘‘(III) DIRECTOR.—The term ‘di4 rector’ means a member of the board 

5 of directors of a company, or of a 

6 board or committee performing a 

7 similar function to a board of direc8 tors, who has authority to vote on 

9 matters before the board or com10 mittee. 

11 ‘‘(IV) FINANCIAL COMPANY.— 

12 The term ‘financial company’ has the 

13 meaning given the term in section 

14 201(a) of the Dodd-Frank Wall Street 

15 Reform and Consumer Protection Act 

16 (12 U.S.C. 5381(a)). 

17 ‘‘(V) SENIOR EXECUTIVE.—The 

18 term ‘senior executive’— 

19 ‘‘(aa) means any individual 

20 who participates or has authority 

21 to participate (other than in the 

22 capacity of a director) in major 

23 policymaking functions of a com24 pany, regardless of whether the 

25 individual has an official title or 


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1 the title of the individual des2 ignates the individual as an as3 sistant; and 

4 ‘‘(bb) includes the chairman 

5 of the board, the president, any 

6 vice president, the secretary, the 

7 treasurer or chief financial offi8 cer, the general partner, and any 

9 manager of a company, unless 

10 the individual— 

11 ‘‘(AA) is excluded, by 

12 resolution of the board of di13 rectors, the bylaws, the op14 erating agreement, or the 

15 partnership agreement of 

16 the company, from partici17 pation (other than in the ca18 pacity of a director) in 

19 major policymaking func20 tions of the company; and 

21 ‘‘(BB) does not actually 

22 participate in major policy23 making functions of the 

24 company.’’. 


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1 (b) REGULATIONS.—The Federal Deposit Insurance 

2 Corporation shall promulgate regulations to administer 

3 and carry out this section, in a manner that is not less 

4 stringent than the manner set forth in section 380.7 of 

5 title 12, Code of Federal Regulations (as in effect on the 

6 date of enactment of this Act). 

7 SEC. 3. ORDERLY LIQUIDATION AUTHORITY. 

8 Title II of the Dodd-Frank Wall Street Reform and 

9 Consumer Protection Act (12 U.S.C. 5381 et seq.) is 

10 amended— 

11 (1) in section 210(s) (12 U.S.C. 5390(s)), by 

12 adding at the end the following: 

13 ‘‘(4) PERSONAL LIABILITY.—Any liability insur14 ance policy for a senior executive or director de15 scribed in paragraph (1) shall exclude from coverage 

16 any liability under this subsection.’’; and 

17 (2) in section 213(b) (12 U.S.C. 5393(b))— 

18 (A) in paragraph (1)(C), by inserting 

19 ‘‘and’’ at the end; 

20 (B) in paragraph (2), by striking ‘‘; and’’ 

21 and inserting a period; and 

22 (C) by striking paragraph (3). 

Æ 


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