Incentivizing Safe and Sound Banking Act

Maxine Waters

Democrat · CA · Representative

Source: Congress.gov · FEC

No cosponsors on record. Bills can pass without cosponsors — this often means the sponsor introduced the bill alone, either because it's a messaging bill, a chairman's mark, or simply early in the legislative cycle.

Referred to the House Committee on Financial Services.

2026-03-09

Source: Congress.gov

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.

Plain-English rewrite of the Congressional Research Service summary published on Congress.gov. Cached and reviewed.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 7887 Introduced in House (IH)] <DOC> 119th CONGRESS 2d Session H. R. 7887 To prohibit stock sales by senior bank executives in certain circumstances. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES March 9, 2026 Ms. Waters introduced the following bill; which was referred to the Committee on Financial Services _______________________________________________________________________ A BILL To prohibit stock sales by senior bank executives in certain circumstances. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Incentivizing Safe and Sound Banking Act''. SEC. 2. STOCK SALE PROHIBITION. (a) Authority To Prohibit Stock Sales Relating to Cease and Desist Orders.--Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)) is amended by inserting at the end the following: ``(11) Stock sale prohibition.--The authority to issue an order under this subsection or subsection (c) includes the authority to prohibit the sale of securities of the insured depository institution and any affiliate of such insured depository institution received and owned by any current or former officer or director of the insured depository institution or any institution-affiliated party that received such securities as a form of compensation.''. (b) Automatic Prohibition.--Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is amended by adding at the end the following: ``(x) Automatic Prohibition of Stock Sale.-- ``(1) In general.--If a covered banking institution has a composite or component rating of 3, 4, or 5 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system), or the appropriate Federal banking agency issues a `matter requiring immediate attention' (or similar supervisory notice, as determined by the appropriate Federal banking agency) to a covered banking institution, and the institution does not remediate the issue by the deadline established by the appropriate Federal banking agency, any senior executive officer may not sell securities of the covered banking institution or any affiliate of the covered banking institution that the individual received as a form of compensation, until the matter is resolved to the satisfaction of the appropriate Federal banking agency. ``(2) Covered banking institution.--In this subsection, the term `covered banking institution' means-- ``(A) a bank holding company with more than $50,000,000,000 in consolidated assets; ``(B) a bank subsidiary of a bank holding company described under subparagraph (A); or ``(C) a bank or savings association with more than $50,000,000,000 in consolidated assets.''. <all>

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