Incentivizing Safe and Sound Banking Act

Bill: 118-hr-4209
Sponsor: full_name: Rep. Waters, Maxine [D-CA-43]
Introduced: 2023-06-20
Policy area: Finance and Financial Sector
Latest action: action_date: 2023-06-20
text: Referred to the House Committee on Financial Services.

Summaries:
action_date: 2023-06-20
action_desc: Introduced in House
text: <p><b>Incentivizing Safe and Sound Banking Act </b></p> <p>This bill allows the Federal Deposit Insurance Corporation to, during cease-and-desist proceedings for unsafe or unsound practices in an institution, prohibit the sale of stock in a bank or holding company by an officer or director of the bank or any bank-affiliated party who received stock as compensation. Further, the bill automatically prohibits the sale of such stocks by senior executive officers or affiliated parties at large banks if the bank receives a certain risk management rating or if the bank is under an unresolved supervisory notice issued by a banking regulator. </p>

tv_txt: I 118th CONGRESS 1st Session H. R. 4209 IN THE HOUSE OF REPRESENTATIVES June 20, 2023 Ms. Waters (for herself, Ms. Velázquez , Mr. Sherman , Mr. Green of Texas , Mr. Cleaver , Mrs. Beatty , Ms. Garcia of Texas , Mr. Horsford , and Ms. Tlaib ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To prohibit stock sales by senior bank executives in certain circumstances.

1. Short title This Act may be cited as the Incentivizing Safe and Sound Banking Act . 2. Stock sale prohibition (a) Authority To prohibit stock sales relating To cease and desist orders Section 8(b) of the Federal Deposit Insurance Act ( 12 U.S.C. 1818(b) ) is amended by inserting at the end the following: (11) Stock sale prohibition The authority to issue an order under this subsection or subsection (c) includes the authority to prohibit the sale of securities of the insured depository institution and any affiliate of such insured depository institution received and owned by any current or former officer or director of the insured depository institution or any institution-affiliated party that received such securities as a form of compensation. . (b) Automatic prohibition Section 8 of the Federal Deposit Insurance Act ( 12 U.S.C. 1818 ) is further amended by adding at the end the following: (y) Automatic prohibition of stock sale (1) In general If a covered banking institution has a composite or component rating of 3, 4, or 5 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system), or the appropriate Federal banking agency issues a matter requiring immediate attention (or similar supervisory notice, as determined by the appropriate Federal banking agency) to a covered banking institution, and the institution does not remediate the issue by the deadline established by the appropriate Federal banking agency, any senior executive officer may not sell securities of the covered banking institution or any affiliate of the covered banking institution that the individual received as a form of compensation, until the matter is resolved to the satisfaction of the appropriate Federal banking agency. (2) Covered banking institution In this subsection, the term covered banking institution means— (A) a bank holding company with more than $50,000,000,000 in consolidated assets; (B) a bank subsidiary of a bank holding company described under subparagraph (A); or (C) a bank or savings association with more than $50,000,000,000 in consolidated assets. .