Title: Wall Street Banker Accountability for Misconduct Act of 2019
Policy area: Finance and Financial Sector

Summary:
Wall Street Banker Accountability for Misconduct Act of 2019
This bill requires large bank holding companies and their subsidiaries to establish funds to pay their criminal and civil fines. Specified senior employees must annually contribute a portion of their salaries to these funds. If sufficient funds remain 10 years after the contribution, the contributing employees must be repaid. The bill provides for separate treatment of funds contributed by former employees.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3885 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 3885

  To amend the Bank Holding Company Act of 1956 to defer part of the 
 compensation of senior employees of large bank holding companies (and 
 their subsidiaries) for 10 years, to use such deferred amounts to pay 
  any civil or criminal fines that may be levied on the bank holding 
            company (or subsidiary), and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 23, 2019

 Ms. Gabbard introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Bank Holding Company Act of 1956 to defer part of the 
 compensation of senior employees of large bank holding companies (and 
 their subsidiaries) for 10 years, to use such deferred amounts to pay 
  any civil or criminal fines that may be levied on the bank holding 
            company (or subsidiary), and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wall Street Banker Accountability 
for Misconduct Act of 2019''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Senior employees of major bank holding companies 
        receive extraordinary pay packages, even when they oversee 
        massive frauds and financial misconduct.
            (2) Widespread financial misconduct by individual Wall 
        Street bankers led to the 2008 financial crisis, which caused 
        the Great Recession. The Department of Justice brought 
        litigation against every major bank, resulting in more than 
        $163,000,000,000 in fines.
            (3) This misconduct resulted from the actions of 
        individuals and was a direct result of a banking culture that 
        rewards bad behavior.
            (4) Despite the actions of individuals, Wall Street banks 
        paid billions of dollars in fines out of monies that otherwise 
        were owned and could be paid in dividends to shareholders. 
        While culpable bankers continued to receive extraordinary pay, 
        innocent shareholders paid the price for banker misconduct.
            (5) In the aftermath of the Great Recession, and after 
        further misconduct in the financial services industry, the 
        Federal Reserve Bank of New York has urged financial firms to 
        reevaluate and reform their compensation incentive structures 
        to align with shareholders and customers interests.
            (6) Misaligned incentives within the banking industry 
        continue to fail to hold Wall Street executives and their 
        senior employees accountable for their actions.

SEC. 3. DEFERMENT OF SENIOR EMPLOYEE COMPENSATION.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended by inserting after section 5 the following:

``SEC. 6. DEFERMENT OF SENIOR EMPLOYEE COMPENSATION.

    ``(a) Deferment Fund.--Each covered bank holding company and each 
subsidiary of a covered bank holding company shall establish a 
deferment fund, which shall--
            ``(1) only contain compensation deferred under subsection 
        (b); and
            ``(2) only be used as permitted by this section.
    ``(b) Deferment of Compensation.--Each covered bank holding company 
and each subsidiary of a covered bank holding company shall--
            ``(1) each year, defer the compensation of each senior 
        employee of the bank holding company or subsidiary in an amount 
        equal to at least 50 percent of the amount that the employee's 
        total compensation for the year exceeds 10 times the 
        compensation of the median paid employee of the consolidated 
        bank holding company for the year;
            ``(2) place all compensation deferred under paragraph (1) 
        into the deferment fund of the bank holding company or 
        subsidiary; and
            ``(3) after the end of the 10-year period beginning on the 
        date the compensation was deferred, if sufficient funds remain 
        in the deferment fund, pay the senior employee the amount of 
        compensation deferred at the beginning of the 10-year period.
    ``(c) Use of Deferment Fund To Pay Fines.--If a covered bank 
holding company or subsidiary of a covered bank holding company is 
subject to a civil or criminal fine, the bank holding company or 
subsidiary shall first pay such fine out of amounts contained in the 
deferment fund of the bank holding company or subsidiary.
    ``(d) Cancellation of Compensation That Cannot Be Paid From 
Deferment Fund.--Each covered bank holding company and each subsidiary 
of a covered bank holding company shall have in place a policy that 
cancels any compensation deferred under subsection (b) that cannot be 
repaid as described under subsection (b)(3), due to the deferment fund 
lacking sufficient funds.
    ``(e) Treatment of Deferred Compensation of Ex-Employees.--With 
respect to an individual that has compensation deferred pursuant to 
subsection (b), but is no longer employed by the applicable bank 
holding company or subsidiary, if the bank holding company or 
subsidiary is required to pay a fine from its deferment fund for 
misconduct that occurred after the individual was no longer employed by 
the bank holding company or subsidiary, the bank holding company or 
subsidiary shall segregate the individual's deferred compensation from 
other amounts in the deferment fund and shall not use such segregated 
amounts for any purpose other than repaying the individual pursuant to 
subsection (b)(3) or for the payment of another fine for misconduct 
that occurred while the individual was still employed by the bank 
holding company or subsidiary.
    ``(f) Rulemaking.--The Board may issue such rules as the Board 
determines necessary to carry out this section.
    ``(g) Definitions.--In this section:
            ``(1) Compensation.--With respect to an employee, the term 
        `compensation' means any financial remuneration, including 
        salary, bonuses, incentives, benefits, severance, deferred 
        compensation, or golden parachute benefits, and any profits 
        that would be realized from the sale of the securities of the 
        company employing the employee.
            ``(2) Consolidated bank holding company.--With respect to a 
        bank holding company, the term `consolidated bank holding 
        company' means the bank holding company and all subsidiaries of 
        the bank holding company.
            ``(3) Covered bank holding company.--The term `covered bank 
        holding company' means a consolidated bank holding company with 
        more than $250,000,000,000 in consolidated assets.
            ``(4) Senior employee.--The term `senior employee' means an 
        employee of a covered bank holding company or a subsidiary of 
        the covered bank holding company who--
                    ``(A) has total compensation of more than 
                $1,000,000;
                    ``(B) is identified by the bank holding company as 
                one of the 100 most senior officers of the consolidated 
                bank holding company;
                    ``(C) receives one of the 100 largest compensation 
                packages of the consolidated bank holding company;
                    ``(D) receives compensation that is more than 10 
                times the compensation of the median paid employee of 
                the consolidated bank holding company; or
                    ``(E) has the authority to commit or expose 0.5 
                percent or more of the capital of the consolidated bank 
                holding company.''.
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