12 U.S.C. § 5641 — Enhanced compensation structure reporting
submitted 16 years ago by Pub. L. 111-203 to r/title-12-BANKS-AND-BANKING · 560 words · no verdicts yet
This section regulates incentive-based compensation at covered financial institutions. It requires disclosures, prohibits certain arrangements, and provides exemptions.
(a) Enhanced disclosure and reporting. (1) Within 9 months after July 21, 2010, the appropriate Federal regulators jointly must issue regulations or guidelines requiring each covered financial institution to disclose the structures of all its incentive-based compensation arrangements well enough to determine whether they (A) give an executive officer, employee, director*, or principal shareholder excessive compensation, fees, or benefits, or (B) could cause the institution a material financial loss. (2) This does not require reporting particular people’s actual pay. It also does not require an institution with no incentive-based payment arrangement to make these disclosures. (b) Prohibited arrangements. Within the same 9-month period, the regulators jointly must issue regulations or guidelines prohibiting incentive-based payment arrangements, or features of them, that they find encourage covered institutions to take inappropriate risks by (1) giving such a person* excessive compensation, fees, or benefits, or (2) potentially causing a material institutional loss. (c) Standards. The regulators must (1) make standards under (a) and (b) comparable to those under section 1831p–1 for insured depository institutions and (2) consider the standards in section 1831p–1(c). (d) Enforcement. Section 505 of the Gramm-Leach-Bliley Act enforces this section and its regulations; a violation is treated as a violation of subtitle A of title V of that Act. (e) Definitions. “Appropriate Federal regulator” means the listed Federal Reserve Board, Comptroller of the Currency, FDIC Board, Director of the Office of Thrift Supervision, NCUA Board, SEC, and FHFA. “Covered financial institution” means (A) a depository institution or holding company as defined in section 1813, (B) a registered broker-dealer under section 78o of title 15, (C) a credit* union described in section 461(b)(1)(A)(iv), (D) an investment adviser as defined in section 80b–2(a)(11) of title 15, (E) Fannie Mae, (F) Freddie Mac, or (G) another institution the regulators jointly designate by rule. (f) Exemption. This section does not apply to a covered institution with assets under $1,000,000,000.
Not later than 9 months after July 21, 2010, the appropriate Federal regulators jointly shall prescribe regulations or guidelines to require each covered financial institution to disclose to the appropriate Federal regulator the structures of all incentive-based compensation arrangements offered by such covered financial institutions sufficient to determine whether the compensation structure—
provides an executive officer, employee, director*, or principal shareholder of the covered financial institution with excessive compensation, fees, or benefits; or
could lead to material financial loss to the covered financial institution.
Nothing in this section shall be construed as requiring the reporting of the actual compensation of particular individuals. Nothing in this section shall be construed to require a covered financial institution that does not have an incentive-based payment arrangement to make the disclosures required under this subsection.
Not later than 9 months after July 21, 2010, the appropriate Federal regulators shall jointly prescribe regulations or guidelines that prohibit any types of incentive-based payment arrangement, or any feature of any such arrangement, that the regulators determine encourages inappropriate risks by covered financial institutions—
by providing an executive officer, employee, director, or principal shareholder of the covered financial institution with excessive compensation, fees, or benefits; or
that could lead to material financial loss to the covered financial institution.
The appropriate Federal regulators shall—
ensure that any standards for compensation established under subsections (a) or (b) are comparable to the standards established under section 1831p–1 1 of this title for insured depository institutions; and
in establishing such standards under such subsections, take into consideration the compensation standards described in section 1831p–1(c) of this title.
The provisions of this section and the regulations issued under this section shall be enforced under section 505 of the Gramm-Leach-Bliley Act [15 U.S.C. 6805] and, for purposes of such section, a violation of this section or such regulations shall be treated as a violation of subtitle A of title V of such Act [15 U.S.C. 6801 et seq.].
As used in this section—
the term “appropriate Federal regulator” means the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, the National Credit* Union Administration Board, the Securities and Exchange Commission, the Federal Housing Finance Agency; and
the term “covered financial institution” means—
a depository institution or depository institution holding company, as such terms are defined in section 1813 of this title;
a broker-dealer registered under section 78o of title 15;
a credit union, as described in section 461(b)(1)(A)(iv) of this title;
an investment advisor, as such term is defined in section 80b–2(a)(11) of title 15;
the Federal National Mortgage Association;
the Federal Home Loan Mortgage Corporation; and
any other financial institution that the appropriate Federal regulators, jointly, by rule, determine should be treated as a covered financial institution for purposes of this section.
The requirements of this section shall not apply to covered financial institutions with assets of less than $1,000,000,000.
Source credit: (Pub. L. 111–203, title IX, § 956, July 21, 2010, 124 Stat. 1905.)
- 2010Enacted · Pub. L. 111-203 · 124 Stat. 1905
A history note hasn’t been published yet. The record shows enactment by Pub. L. 111-203 on 2010-07-21.
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