Failed Bank Executives Accountability and Consequences Act

Summary

Gives federal banking regulators stronger tools to hold bank executives and directors financially accountable when their negligence, recklessness, or fraud contributes to a bank failure. It authorizes the FDIC (including when acting as receiver) to claw back two years of compensation (and unlimited amounts for fraud), expands the definition of "compensation," creates new civil-penalty tiers for culpable executives and directors, and lets agencies bar negligent parties from further participation in insured depository institutions. The bill also urges regulators to finalize robust clawback guidance required under existing law and clarifies that existing enforcement powers remain available.

• Grants the FDIC power to recoup compensation from executives/directors when their negligence, recklessness, or fraud contributes to a bank loss or failure.
• Clawbacks cover compensation paid during the two years before a conservator/receiver appointment; fraud has no stated time limit for recovery.
• Requires a broad statutory definition of "compensation" to include salary, bonuses, deferred pay, severance, golden parachutes, and sale profits.
• Creates two tiers of civil penalties: negligent conduct (up to $25,000 per day) and knowing/reckless conduct (higher daily maximum).
• Enables agencies to issue written notices barring negligent parties from further participation in insured depository institutions.
• Directs regulators to finalize robust clawback guidance required under existing law and urges full use of enforcement and law‑enforcement authorities.
• Preserves all preexisting enforcement powers and clarifies the Act does not limit other authorities.
• Applies to both insured depository institutions and covered financial companies when the FDIC acts as receiver.
• Requires the FDIC to issue implementing regulations to operationalize the new recovery and penalty authorities.