When a big bank (over $50 billion in assets) gets a poor safety rating from regulators or fails to fix a serious supervisory concern on time, its top executives would be automatically banned from selling any company stock they received as compensation until the problem is resolved. Regulators could also impose stock-sale bans as part of cease-and-desist orders against any bank. The bill is designed to make sure bank executives can't cash out while their institution is in trouble, aligning their financial incentives with actually fixing the problems.
Congressional Summary
Incentivizing Safe and Sound Banking Act 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 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.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2026-03-09
- Date Added
- 2026-04-06