12 USC 5641 – Enhanced compensation structure reporting
(a) Enhanced disclosure and reporting of compensation arrangements
(1) In general
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—
(A) provides an executive officer, employee, director, or principal shareholder of the covered financial institution with excessive compensation, fees, or benefits; or
(B) could lead to material financial loss to the covered financial institution.
(2) Rules of construction
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.
(b) Prohibition on certain compensation arrangements
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—
(1) by providing an executive officer, employee, director, or principal shareholder of the covered financial institution with excessive compensation, fees, or benefits; or
(2) that could lead to material financial loss to the covered financial institution.
(c) Standards
Terms Used In 12 USC 5641
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- association: when used in reference to a corporation, shall be deemed to embrace the words "successors and assigns of such company or association" in like manner as if these last-named words, or words of similar import, were expressed. See 1 USC 5
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) Source: OCC
- officer: includes any person authorized by law to perform the duties of the office. See 1 USC 1
The appropriate Federal regulators shall—
(1) 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
(2) in establishing such standards under such subsections, take into consideration the compensation standards described in section 1831p-1(c) of this title.
(d) Enforcement
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.].
(e) Definitions
As used in this section—
(1) 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
(2) the term “covered financial institution” means—
(A) a depository institution or depository institution holding company, as such terms are defined in section 1813 of this title;
(B) a broker-dealer registered under section 78o of title 15;
(C) a credit union, as described in section 461(b)(1)(A)(iv) of this title;
(D) an investment advisor, as such term is defined in section 80b-2(a)(11) of title 15;
(E) the Federal National Mortgage Association;
(F) the Federal Home Loan Mortgage Corporation; and
(G) 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.
(f) Exemption for certain financial institutions
The requirements of this section shall not apply to covered financial institutions with assets of less than $1,000,000,000.