[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1790 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 1790

To amend the Federal Deposit Insurance Act to clarify that the Federal 
 Deposit Insurance Corporation and appropriate Federal regulators have 
the authority to claw back certain compensation paid to executives, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 1, 2023

 Ms. Warren (for herself, Mr. Hawley, Ms. Cortez Masto, Mr. Braun, Mr. 
Vance, Mr. Menendez, Mr. Warner, Mr. Van Hollen, Ms. Smith, Mrs. Britt, 
 Mr. Cramer, Mr. Warnock, and Mr. Fetterman) 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 clarify that the Federal 
 Deposit Insurance Corporation and appropriate Federal regulators have 
the authority to claw back certain compensation paid to executives, 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 ``Failed Bank Executives Clawback 
Act''.

SEC. 2. CLAWBACK.

    Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(b)) is amended by inserting after paragraph (8) the following:
            ``(9) Clawback.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Covered compensation.--The term 
                        `covered compensation' means--
                                    ``(I) salary;
                                    ``(II) bonuses;
                                    ``(III) any compensation that is 
                                granted, earned, or vested based wholly 
                                or in part upon the attainment of any 
                                financial reporting measure or other 
                                performance metric;
                                    ``(IV) equity-based compensation;
                                    ``(V) time- or service-based 
                                awards;
                                    ``(VI) awards based on nonfinancial 
                                metrics; and
                                    ``(VII) any profits realized from 
                                the buying or selling of securities.
                            ``(ii) Covered party.--
                                    ``(I) In general.--The term 
                                `covered party' means an entity 
                                described in subclause (II) with 
                                respect to an insured depository 
                                institution that caused more than a 
                                minimal financial loss to, or a 
                                significant adverse effect on, the 
                                insured depository institution.
                                    ``(II) Entities described.--An 
                                entity described in this subclause is 
                                any of the following:
                                            ``(aa) Any director, 
                                        officer, or controlling 
                                        stockholder (other than a bank 
                                        holding company or savings and 
                                        loan holding company) of, or 
                                        agent for, an insured 
                                        depository institution.
                                            ``(bb) Any other person who 
                                        has filed or is required to 
                                        file a change-in-control notice 
                                        with the appropriate Federal 
                                        banking agency under section 
                                        7(j).
                                            ``(cc) Any shareholder 
                                        (other than a bank holding 
                                        company or savings and loan 
                                        holding company), joint venture 
                                        partner, and any other person 
                                        as determined by the 
                                        appropriate Federal banking 
                                        agency (by regulation or case-
                                        by-case) who participates in 
                                        the conduct of the affairs of 
                                        an insured depository 
                                        institution.
                    ``(B) Clawback.--
                            ``(i) Liability of covered party.--A 
                        covered party with respect to an insured 
                        depository institution with total assets more 
                        than $10,000,000,000 is liable to the 
                        Corporation for any covered compensation clawed 
                        back under clause (ii).
                            ``(ii) Required clawbacks.--In the case of 
                        insolvency, resolution, or the appointment of 
                        the Corporation as receiver of any insured 
                        depository institution with total assets more 
                        than $10,000,000,000, the Corporation shall 
                        claw back all or part of the covered 
                        compensation received by any covered party with 
                        respect to the insured depository institution 
                        during the preceding 3 years.
                            ``(iii) Deposit.--Any covered compensation 
                        clawed back under this subparagraph shall be 
                        deposited into the Deposit Insurance Fund.''.

SEC. 3. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPANIES.

    Section 204(a)(3) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5384(a)(3)) is amended by striking ``the 
financial company'' and inserting ``of a financial company for which 
the Corporation is appointed receiver, regardless of the process by 
which the Corporation is appointed,''.
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