S 4050

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IN THE SENATE OF THE UNITED STATES

March 11, 2026

Ms. Warren (for herself, Mr. Hawley, Ms. Cortez Masto, Mrs. Britt, Mr. Gallego, Mr. Cramer, Mr. Warner, Mr. Van Hollen, Ms. Smith, Mr. Warnock, Mr. Fetterman, Mr. Kim, Ms. Blunt Rochester, and Ms. Alsobrooks) 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 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—

“(AA) participates in the conduct of the affairs of an insured depository institution; and

“(BB) was found by the appropriate Federal banking agency to be primarily responsible for the failed condition of the 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,”. <all>