Sec. 2. Systemic risk determination
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Section 13(c)(4)(G) of the Federal Deposit Insurance Act ( 12 U.S.C. 1823(c)(4)(G) ) is amended by adding at the end the following: The Corporation, as receiver or conservator of an insured depository institution under clause (i), may recover from any current or former senior executive or director of the insured depository institution, or of a covered affiliate with respect to the insured depository institution, who is substantially responsible for the failed condition of the insured depository institution, any compensation received during the 2-year period preceding the date on which the Corporation was appointed as the receiver or conservator of the insured depository institution, except that, in the case of fraud, no time limit shall apply.
In seeking to recover any compensation under subclause (I), the Corporation shall weigh the financial and deterrent benefits of that recovery against the cost of executing the recovery. Any liability insurance policy for a senior executive or director described in subclause
(I)shall exclude from coverage any liability under this clause. The Corporation may take any action authorized by subclause (II), if the Corporation determines that— a senior executive or a director of an insured depository institution with respect to which the Corporation has taken action or provided assistance under clause (i), or of a covered affiliate with respect to such an insured depository institution, before the appointment of the Corporation as receiver or conservator, has, directly or indirectly— violated any law or regulation; violated any cease-and-desist order that has become final; violated any condition imposed in writing by a Federal agency in connection with any action on any application, notice, or request by the insured depository institution or covered affiliate (as applicable) or the senior executive or director (as applicable); violated any written agreement between the insured depository institution or covered affiliate (as applicable) and the Federal agency described in subitem (CC); engaged or participated in any unsafe or unsound practice; or committed or engaged in any act, omission, or practice that constitutes a breach of the fiduciary duty of that senior executive or director; and by reason of the violation, practice, or breach described in any subitem of item (aa), that senior executive or director has received financial gain or other benefit, and that violation, practice, or breach contributed to the failure of the insured depository institution. The Corporation may serve upon a senior executive or director with respect to whom the Corporation has made a determination under subclause
(I)a written notice of the intention of the Corporation to prohibit any further participation by that individual, in any manner, in the conduct of the affairs of any financial company for a period of time determined by the Corporation to be commensurate with that violation, practice, or breach, except that such period shall be not less than 2 years. In this subparagraph: The term compensation means any direct or indirect financial remuneration received from an insured depository institution, or from a covered affiliate with respect to an insured depository institution, including salary, bonuses, incentives, benefits, severance pay, deferred compensation, golden parachute benefits, benefits derived from an employment contract or other compensation or benefit arrangement, perquisites, stock option plans, post-employment benefits, profits realized from a sale of securities in the insured depository institution or the covered affiliate (as applicable), or any cash or noncash payments or benefits granted to or for the benefit of a senior executive or director. The term covered affiliate means, with respect to an insured depository institution, any— bank holding company (as defined in section 2(a) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1841(a) )) that controls the insured depository institution; savings and loan holding company (as defined in section 10(a) of the Home Owners’ Loan Act ( 12 U.S.C. 1467a(a) )) that directly or indirectly controls the insured depository institution; subsidiary of the insured depository institution; or affiliate (as defined in section 2 of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1841(k) )) of the insured depository institution. The term director means a member of the board of directors of a company, or of a board or committee performing a similar function to a board of directors, who has authority to vote on matters before the board or committee. The term financial company has the meaning given the term in section 201(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5381(a) ). The term senior executive — means any individual who participates or has authority to participate (other than in the capacity of a director) in major policymaking functions of a company, regardless of whether the individual has an official title or the title of the individual designates the individual as an assistant; and includes the chairman of the board, the president, any vice president, the secretary, the treasurer or chief financial officer, the general partner, and any manager of a company, unless the individual— is excluded, by resolution of the board of directors, the bylaws, the operating agreement, or the partnership agreement of the company, from participation (other than in the capacity of a director) in major policymaking functions of the company; and does not actually participate in major policymaking functions of the company. . The Federal Deposit Insurance Corporation shall promulgate regulations to administer and carry out this section, in a manner that is not less stringent than the manner set forth in section 380.7 of title 12, Code of Federal Regulations (as in effect on the date of enactment of this Act).
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