HR 5860 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

H. R. 5860CommentsClose CommentsPermalink

To prohibit individuals from insuring against possible losses from having to repay illegally-received compensation or from having to pay civil penalties, and for other purposes.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

May 30, 2012CommentsClose CommentsPermalink

Mr. FRANK of Massachusetts (for himself, Mr. WAXMAN, and Mr. PETERSON) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To prohibit individuals from insuring against possible losses from having to repay illegally-received compensation or from having to pay civil penalties, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Executive Compensation Clawback Full Enforcement Act’.CommentsClose CommentsPermalink

SEC. 2. NO AVOIDANCE OF PERSONAL LIABILITY.

(a) In General- An officer, director, employee, or other institution-affiliated party of a depository institution, depository institution holding company, or nonbank financial company who is required by a Federal financial regulatory law that provides for personal liability, or any rule or order promulgated by a Federal financial regulatory agency thereunder, to repay previously earned compensation or pay a civil money penalty--CommentsClose CommentsPermalink





(1) shall be personally liable for the amounts so owed; andCommentsClose CommentsPermalink





(2) may not, directly or indirectly, insure or hedge against, or otherwise transfer the risks associated with, personal liability for the amounts so owed.CommentsClose CommentsPermalink





(b) Rule of Construction- Subsection (a) shall not preclude a person from--CommentsClose CommentsPermalink





(1) being provided funds necessary to defend against a previously earned compensation recovery or civil money penalty described under subsection (a)--CommentsClose CommentsPermalink





(A) from the relevant depository institution, depository institution holding company, or nonbank financial company;CommentsClose CommentsPermalink





(B) under an insurance policy; orCommentsClose CommentsPermalink





(C) pursuant to court order; orCommentsClose CommentsPermalink





(2) obtaining insurance that protects such person from being held personally liable for--CommentsClose CommentsPermalink





(A) penalties, judgments, or other amounts assessed against a depository institution, depository institution holding company, or nonbank financial company at the company level; orCommentsClose CommentsPermalink





(B) unintentional outcomes associated with the ordinary exercise of trade or business judgment, unless the effects of such judgment result in personal liability under a Federal financial regulatory law that provides for personal liability.CommentsClose CommentsPermalink





(c) Application to Foreign Nonbank Financial Companies- Subsection (a) shall only apply to an officer, director, employee, or other institution-affiliated party of a foreign nonbank financial company to the extent that such officer, director, employee, or other institution-affiliated party is based in the United States.CommentsClose CommentsPermalink





(d) Definitions- For purposes of this Act:CommentsClose CommentsPermalink





(1) COMPENSATION- The term ‘compensation’ means anything of value, regardless of the form in which provided, that is given by a depository institution, depository institution holding company, or nonbank financial company to an officer, director, employee, or other institution-affiliated party in return for that individual’s service to such entity.CommentsClose CommentsPermalink





(2) DEPOSITORY INSTITUTION- The term ‘depository institution’ has the meaning given such term under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).CommentsClose CommentsPermalink





(3) DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘depository institution holding company’ means--CommentsClose CommentsPermalink





(A) a bank holding company, as defined under section 102 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5311); andCommentsClose CommentsPermalink





(B) a savings and loan holding company, as defined under section 10 of the Home Owners’ Loan Act (12 U.S.C. 1467a).CommentsClose CommentsPermalink





(4) FEDERAL FINANCIAL REGULATORY AGENCY- The term ‘Federal financial regulatory agency’ means--CommentsClose CommentsPermalink





(A) the Board of Governors of the Federal Reserve System;CommentsClose CommentsPermalink





(B) the Bureau of Consumer Financial Protection;CommentsClose CommentsPermalink





(C) the Commodity Futures Trading Commission;CommentsClose CommentsPermalink





(D) the Federal Deposit Insurance Corporation;CommentsClose CommentsPermalink





(E) the Federal Housing Finance Agency;CommentsClose CommentsPermalink





(F) the Federal Trade Commission, to the extent the Commission exercises authority over a depository institution, depository institution holding company, or nonbank financial company;CommentsClose CommentsPermalink





(G) the Office of the Comptroller of the Currency; andCommentsClose CommentsPermalink





(H) the Securities and Exchange Commission.CommentsClose CommentsPermalink





(5) FEDERAL FINANCIAL REGULATORY LAW- The term ‘Federal financial regulatory law’ means--CommentsClose CommentsPermalink





(A) the Bank Holding Company Act of 1956;CommentsClose CommentsPermalink





(B) the Commodity Exchange Act;CommentsClose CommentsPermalink





(C) the Dodd-Frank Wall Street Reform and Consumer Protection Act;CommentsClose CommentsPermalink





(D) section 111 of the Emergency Economic Stabilization Act of 2008;CommentsClose CommentsPermalink





(E) the Federal Deposit Insurance Act;CommentsClose CommentsPermalink





(F) the Federal Home Loan Bank Act;CommentsClose CommentsPermalink





(G) the Federal Home Loan Mortgage Corporation Act;CommentsClose CommentsPermalink





(H) the Federal Housing Enterprises Financial Safety and Soundness Act of 1992;CommentsClose CommentsPermalink





(I) the Federal National Mortgage Association Charter Act;CommentsClose CommentsPermalink





(J) the Federal Trade Commission Act, to the extent such Act applies to depository institutions, depository institution holding companies, or nonbank financial companies;CommentsClose CommentsPermalink





(K) the Gramm-Leach-Bliley Act;CommentsClose CommentsPermalink





(L) the Home Owners’ Loan Act;CommentsClose CommentsPermalink





(M) the Housing and Economic Recovery Act of 2008;CommentsClose CommentsPermalink





(N) the International Banking Act of 1978;CommentsClose CommentsPermalink





(O) the International Lending Supervision Act of 1983;CommentsClose CommentsPermalink





(P) title LXII of the Revised Statutes of the United States; andCommentsClose CommentsPermalink





(Q) the securities laws (as defined under section 3(a) of the Securities Exchange Act of 1934), to the extent such laws apply to depository institutions, depository institution holding companies, or nonbank financial companies.CommentsClose CommentsPermalink





(6) FEDERAL FINANCIAL REGULATORY LAW THAT PROVIDES FOR PERSONAL LIABILITY- The term ‘Federal financial regulatory law that provides for personal liability’ means any provision of a Federal financial regulatory law that--CommentsClose CommentsPermalink





(A) directly requires recovery of compensation previously paid to, or directly requires assessment of a civil money penalty against, a director, officer, employee, or other institution-affiliated party of a depository institution, depository institution holding company, or nonbank financial company; orCommentsClose CommentsPermalink





(B) authorizes a Federal financial regulatory agency to require, by rule or order, recovery of compensation previously paid to, or assess a civil money penalty against, a director, officer, employee, or other institution-affiliated party of a depository institution, depository institution holding company, or nonbank financial company.CommentsClose CommentsPermalink





(7) INSTITUTION-AFFILIATED PARTY- The term ‘institution-affiliated party’--CommentsClose CommentsPermalink





(A) has the meaning given such term under subsection (u) of section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); andCommentsClose CommentsPermalink





(B) shall apply with respect to a depository institution, depository institution holding company, and nonbank financial company to the same extent as such subsection applies to an insured depository institution.CommentsClose CommentsPermalink





(8) NONBANK FINANCIAL COMPANY- The term ‘nonbank financial company’ means--CommentsClose CommentsPermalink





(A) a nonbank financial company, as defined under section 102 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5311);CommentsClose CommentsPermalink





(B) the Federal National Mortgage Association;CommentsClose CommentsPermalink





(C) the Federal Home Loan Mortgage Corporation; andCommentsClose CommentsPermalink





(D) the Federal Home Loan Banks.CommentsClose CommentsPermalink