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I
118TH CONGRESS
1ST SESSION H. R. 2972
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.
IN THE HOUSE OF REPRESENTATIVES
APRIL 27, 2023
Ms. PORTER (for herself, Mrs. SPARTZ, Mr. GALLEGO, Mr. BUCK, and Ms.
PEREZ) introduced the following bill; which was referred to the Com-
mittee on Financial Services
A BILL
To amend the Federal Deposit Insurance Act to clarify that
the Federal Deposit Insurance Corporation and appro-
priate Federal regulators have the authority to claw back
certain compensation paid to executives.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Failed Bank Execu-
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tives Clawback Act’’.
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SEC. 2. CLAW BACK.
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Section 8(b) of the Federal Deposit Insurance Act
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(12 U.S.C. 1818(b)) is amended by inserting after para-
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graph (8) the following:
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‘‘(9) CLAWBACK.—
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‘‘(A) DEFINITION.—In this paragraph, the
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term ‘covered compensation’ means—
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‘‘(i) salary;
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‘‘(ii) bonuses;
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‘‘(iii) any compensation that is grant-
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ed, earned, or vested based wholly or in
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part upon the attainment of any financial
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reporting measure or other performance
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metric;
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‘‘(iv) equity-based compensation;
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‘‘(v) time- or service-based awards;
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‘‘(vi) awards based on nonfinancial
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metrics; and
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‘‘(vii) any profits realized from the
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buying or selling of securities.
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‘‘(B) CLAWBACK.—
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‘‘(i) LIABILITY
OF
INSTITUTION-AF-
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FILIATED PARTY.—An institution-affiliated
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party that is substantially responsible for
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the condition of the insured depository in-
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stitution is liable to the Corporation for
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•HR 2972 IH
any covered compensation clawed back
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under clause (ii).
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‘‘(ii) REQUIRED CLAWBACKS.—In the
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case of insolvency or resolution of any in-
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sured depository institution, the Corpora-
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tion shall claw back all or part of the cov-
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ered compensation received by an institu-
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tion-affiliated party during the preceding 5
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years as is necessary to prevent unjust en-
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richment and assure that the party bears
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losses consistent with the responsibility of
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the party.
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‘‘(iii) DEPOSIT.—Any covered com-
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pensation clawed back under this subpara-
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graph shall be deposited into the Deposit
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Insurance Fund or into the general fund of
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the Treasury.’’.
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SEC. 3. ORDERLY LIQUIDATION OF COVERED FINANCIAL
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COMPANIES.
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Section 204 of the Dodd-Frank Wall Street Reform
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and Consumer Protection Act (12 U.S.C. 5384) is amend-
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ed by adding at the end the following:
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‘‘(e) CLAWBACK.—
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‘‘(1) DEFINITION.—In this subsection, the term
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‘covered compensation’ means—
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‘‘(A) salary;
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‘‘(B) bonuses;
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‘‘(C) any compensation that is granted,
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earned, or vested based wholly or in part upon
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the attainment of any financial reporting meas-
5
ure or other performance metric;
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‘‘(D) equity-based compensation;
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‘‘(E) time- or service-based awards;
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‘‘(F)
awards
based
on
nonfinancial
9
metrics; and
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‘‘(G) any profits realized from the buying
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or selling of securities.
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‘‘(2) CLAWBACK.—
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‘‘(A) LIABILITY
OF
INSTITUTION-AFFILI-
14
ATED
PARTY.—An institution-affiliated party
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that is substantially responsible for the condi-
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tion of a covered financial company is liable to
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the Corporation for any covered compensation
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clawed back under subparagraph (B).
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‘‘(B) REQUIRED CLAWBACKS.—In the case
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of insolvency or resolution of any covered finan-
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cial company, the Corporation shall claw back
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all or part of the covered compensation received
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by an institution-affiliated party during the pre-
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ceding 5 years as is necessary to prevent unjust
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•HR 2972 IH
enrichment and assure that the party bears
1
losses consistent with the responsibility of the
2
party.
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‘‘(C) DEPOSIT.—Any covered compensa-
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tion clawed back under this subparagraph shall
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be deposited into the Deposit Insurance Fund
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or into the general fund of the Treasury.’’.
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SEC. 4. LIABILITY TO THE FEDERAL DEPOSIT INSURANCE
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CORPORATION.
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The Bank Holding Company Act (12 U.S.C. 1841
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et seq.) is amended by adding at the end the following:
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‘‘SEC. 15. LIABILITY TO THE FEDERAL DEPOSIT INSURANCE
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CORPORATION.
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‘‘(a) IN GENERAL.—Any bank holding company that
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has control over an insured depository institution for
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which the Corporation is appointed and acts as receiver
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under section 11 of the Federal Deposit Insurance Cor-
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poration Act shall be liable to the Corporation for—
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‘‘(1) any payments from the Deposit Insurance
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Fund established under section 11 of the Federal
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Deposit Insurance Act to insured depositors of such
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insured depository institution;
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‘‘(2) any costs incurred by the Corporation as
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receiver of such insured depository institution; and
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‘‘(3) any interest on the amounts described in
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paragraphs (1) and (2).
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‘‘(b) LIEN AGAINST ALL ASSETS.—
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‘‘(1) IN
GENERAL.—Any liability of a bank
4
holding company to the Corporation under sub-
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section (a) shall be secured by a lien on all assets
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of such bank holding company.
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‘‘(2) SPECIFICATIONS.—Any lien arising under
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this subsection—
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‘‘(A) shall be deemed to be automatically
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perfected;
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‘‘(B) shall have priority over all other liens,
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irrespective of their date of creation or perfec-
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tion; and
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‘‘(C) may not be avoided in a proceeding
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under title 11, United States Code.
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‘‘(c) PRIORITY OF LIABILITY.—
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‘‘(1) IN
GENERAL.—Any liability of a bank
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holding company to the Corporation under sub-
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section (a) shall have payment priority over all other
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liabilities of and interests in the bank holding com-
21
pany.
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‘‘(2) CLARIFYING RULE.—No payment shall be
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made to any other creditor or shareholder of the
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bank holding company until the liability to the Cor-
1
poration under this section has been paid in full.
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‘‘(d) DEFINITIONS.—In this section:
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‘‘(1) INSURED DEPOSITORY INSTITUTION.—The
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term ‘insured depository institution’ has the mean-
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ing given the term in section 3 of the Federal De-
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posit Insurance Act.
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‘‘(2) CORPORATION.—The term ‘Corporation’
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means the Federal Deposit Insurance Corporation.’’.
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Æ
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