Sponsors
The bill trades stronger supervisory tools and reduced executive-driven risk to protect depositors and financial stability for reduced executive liquidity, potential hiring/retention costs for big banks, and increased agency discretion that could cause market or legal friction.
Senior executives at very large banks will be barred from selling equity-based compensation while serious supervisory problems remain, aligning executive incentives with remediation efforts and reducing incentives for risky, short-term behavior.
Limiting executives' ability to liquidate compensation during enforcement actions can reduce immediate sell pressure on bank stock, helping protect depositor confidence and broader financial stability.
Federal banking agencies gain clearer authority to bar sales of securities received as compensation when issuing enforcement orders, strengthening supervisory tools for faster and more effective corrective action.
Senior executives at covered banks could be locked into compensation stock for extended periods, reducing personal liquidity, complicating financial planning, and making equity compensation less attractive—potentially increasing hiring costs or reducing competitiveness.
Enforcement-driven immobilization of executive-held securities could create negative market perceptions or trigger adverse investor reactions, which may indirectly harm shareholders, depositors, and taxpayers.
Agencies' broader discretionary power to restrict sales raises risks of uneven application, inconsistent timing, and legal challenges over the scope of prohibitions, creating uncertainty for executives and firms.
Based on analysis of 2 sections of legislative text.
Expands the enforcement powers of federal banking regulators to restrict sales of securities that senior officers and other institution‑affiliated parties receive as compensation. For very large banking organizations (those with more than $50 billion in consolidated assets), the bill creates an automatic prohibition that blocks senior executives from selling such securities when the institution has poor supervisory ratings or receives certain supervisory notices and fails to fix the problem by the regulator’s deadline, until the issue is resolved.
Introduced March 9, 2026 by Maxine Waters · Last progress March 9, 2026