Failed Bank Executives Clawback Act

Summary

Requires the FDIC to reclaim ("claw back") certain pay from executives and related parties of large insured banks whose actions caused significant losses, and directs recovered money into the Deposit Insurance Fund. Also clarifies federal law language to make clear that certain statutory provisions apply when the FDIC is appointed as receiver, no matter how that appointment occurs.

• Creates a clawback rule allowing the FDIC to reclaim broad forms of compensation from parties whose actions caused significant loss at large insured banks.
• Applies only to insured depository institutions with assets greater than $10 billion.
• Covers compensation paid up to three years before insolvency, resolution, or FDIC appointment as receiver.
• Recovered funds must be deposited into the Deposit Insurance Fund.
• Defines covered compensation to include salary, bonuses, equity, trading profits, and awards tied to performance metrics.
• Defines covered party as those whose acts or omissions caused more than a minimal loss or significant adverse effect to the bank.
• Clarifies existing law to specify that a certain provision applies whenever the FDIC is appointed receiver, regardless of appointment process.
• Likely increases FDIC enforcement power and litigation risk for executives and affiliated entities.
• Does not create new appropriations, change tax law, or specify an effective date in the provided text.