Sponsor
Maxine Waters
Representative · D-CA
Representative · D-CA
The bill strengthens regulators' power to stop insiders from selling compensation securities during supervisory problems—helping protect depositors and taxpayers and hold executives accountable—while imposing liquidity losses on insiders and creating potential market and hiring costs driven by broad, potentially open-ended agency discretion.
Depositors and taxpayers are better protected because insiders are discouraged from selling compensation stock while serious supervisory problems are being fixed, reducing the chance of asset transfers or insider dilution during remediation.
Financial regulators (FDIC) gain explicit authority to bar current and former officers and directors from selling compensation securities, strengthening the agencies' enforcement tools to hold insiders accountable.
Senior executives at large banks are less able to exit before remediation is complete, reducing incentives for executives to avoid accountability during supervisory reviews.
Financial institutions and markets may face prolonged uncertainty because agencies can keep prohibitions in place 'until the matter is resolved to the satisfaction' of the agency, creating open-ended restrictions for insiders.
Senior executives and some former insiders lose liquidity and the ability to diversify their holdings while sale prohibitions apply, limiting personal financial flexibility.
Large banks may face higher retention and recruitment costs if compensation is less liquid or seen as riskier, which could translate into higher costs for customers and taxpayers.
Based on analysis of 2 sections of legislative text.
Gives the FDIC authority to bar sale of compensation securities and automatically prevents senior executives at banks over $50B from selling such securities while supervisory issues persist.
Official title: To prohibit stock sales by senior bank executives in certain circumstances.
Introduced March 9, 2026 by Maxine Waters · Last progress March 9, 2026
Adds new enforcement authority to the FDIC allowing it to bar sale of securities that bank officers, directors, or institution‑affiliated parties received as compensation. It also creates an automatic prohibition that prevents senior executive officers at very large banks (over $50 billion in consolidated assets) from selling such compensation securities while the institution has unresolved supervisory problems or low CAMELS ratings until the issues are remediated.