[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5860 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 5860
To prohibit individuals from insuring against possible losses from
having to repay illegally-received compensation or from having to pay
civil penalties, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 30, 2012
Mr. Frank of Massachusetts (for himself, Mr. Waxman, and Mr. Peterson)
introduced the following bill; which was referred to the Committee on
Financial Services, and in addition to the Committee on Agriculture,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To prohibit individuals from insuring against possible losses from
having to repay illegally-received compensation or from having to pay
civil penalties, and for other purposes.
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 ``Executive Compensation Clawback Full
Enforcement Act''.
SEC. 2. NO AVOIDANCE OF PERSONAL LIABILITY.
(a) In General.--An officer, director, employee, or other
institution-affiliated party of a depository institution, depository
institution holding company, or nonbank financial company who is
required by a Federal financial regulatory law that provides for
personal liability, or any rule or order promulgated by a Federal
financial regulatory agency thereunder, to repay previously earned
compensation or pay a civil money penalty--
(1) shall be personally liable for the amounts so owed; and
(2) may not, directly or indirectly, insure or hedge
against, or otherwise transfer the risks associated with,
personal liability for the amounts so owed.
(b) Rule of Construction.--Subsection (a) shall not preclude a
person from--
(1) being provided funds necessary to defend against a
previously earned compensation recovery or civil money penalty
described under subsection (a)--
(A) from the relevant depository institution,
depository institution holding company, or nonbank
financial company;
(B) under an insurance policy; or
(C) pursuant to court order; or
(2) obtaining insurance that protects such person from
being held personally liable for--
(A) penalties, judgments, or other amounts assessed
against a depository institution, depository
institution holding company, or nonbank financial
company at the company level; or
(B) unintentional outcomes associated with the
ordinary exercise of trade or business judgment, unless
the effects of such judgment result in personal
liability under a Federal financial regulatory law that
provides for personal liability.
(c) Application to Foreign Nonbank Financial Companies.--Subsection
(a) shall only apply to an officer, director, employee, or other
institution-affiliated party of a foreign nonbank financial company to
the extent that such officer, director, employee, or other institution-
affiliated party is based in the United States.
(d) Definitions.--For purposes of this Act:
(1) Compensation.--The term ``compensation'' means anything
of value, regardless of the form in which provided, that is
given by a depository institution, depository institution
holding company, or nonbank financial company to an officer,
director, employee, or other institution-affiliated party in
return for that individual's service to such entity.
(2) Depository institution.--The term ``depository
institution'' has the meaning given such term under section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(3) Depository institution holding company.--The term
``depository institution holding company'' means--
(A) a bank holding company, as defined under
section 102 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5311); and
(B) a savings and loan holding company, as defined
under section 10 of the Home Owners' Loan Act (12
U.S.C. 1467a).
(4) Federal financial regulatory agency.--The term
``Federal financial regulatory agency'' means--
(A) the Board of Governors of the Federal Reserve
System;
(B) the Bureau of Consumer Financial Protection;
(C) the Commodity Futures Trading Commission;
(D) the Federal Deposit Insurance Corporation;
(E) the Federal Housing Finance Agency;
(F) the Federal Trade Commission, to the extent the
Commission exercises authority over a depository
institution, depository institution holding company, or
nonbank financial company;
(G) the Office of the Comptroller of the Currency;
and
(H) the Securities and Exchange Commission.
(5) Federal financial regulatory law.--The term ``Federal
financial regulatory law'' means--
(A) the Bank Holding Company Act of 1956;
(B) the Commodity Exchange Act;
(C) the Dodd-Frank Wall Street Reform and Consumer
Protection Act;
(D) section 111 of the Emergency Economic
Stabilization Act of 2008;
(E) the Federal Deposit Insurance Act;
(F) the Federal Home Loan Bank Act;
(G) the Federal Home Loan Mortgage Corporation Act;
(H) the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992;
(I) the Federal National Mortgage Association
Charter Act;
(J) the Federal Trade Commission Act, to the extent
such Act applies to depository institutions, depository
institution holding companies, or nonbank financial
companies;
(K) the Gramm-Leach-Bliley Act;
(L) the Home Owners' Loan Act;
(M) the Housing and Economic Recovery Act of 2008;
(N) the International Banking Act of 1978;
(O) the International Lending Supervision Act of
1983;
(P) title LXII of the Revised Statutes of the
United States; and
(Q) the securities laws (as defined under section
3(a) of the Securities Exchange Act of 1934), to the
extent such laws apply to depository institutions,
depository institution holding companies, or nonbank
financial companies.
(6) Federal financial regulatory law that provides for
personal liability.--The term ``Federal financial regulatory
law that provides for personal liability'' means any provision
of a Federal financial regulatory law that--
(A) directly requires recovery of compensation
previously paid to, or directly requires assessment of
a civil money penalty against, a director, officer,
employee, or other institution-affiliated party of a
depository institution, depository institution holding
company, or nonbank financial company; or
(B) authorizes a Federal financial regulatory
agency to require, by rule or order, recovery of
compensation previously paid to, or assess a civil
money penalty against, a director, officer, employee,
or other institution-affiliated party of a depository
institution, depository institution holding company, or
nonbank financial company.
(7) Institution-affiliated party.--The term ``institution-
affiliated party''--
(A) has the meaning given such term under
subsection (u) of section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and
(B) shall apply with respect to a depository
institution, depository institution holding company,
and nonbank financial company to the same extent as
such subsection applies to an insured depository
institution.
(8) Nonbank financial company.--The term ``nonbank
financial company'' means--
(A) a nonbank financial company, as defined under
section 102 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5311);
(B) the Federal National Mortgage Association;
(C) the Federal Home Loan Mortgage Corporation; and
(D) the Federal Home Loan Banks.
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