Banks must now pay their own fines—from executive bonuses
H.R. 9490 — Bank Failure Accountability Act · Filed by Rashida Tlaib (D-MI) · 3 cosponsors · Introduced Jun 25, 2026 · Referred to committee
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What it does
This bill requires large financial institutions (those with over $1 billion in assets) to defer at least 50% of compensation for senior executives and highly paid employees that exceeds 7 times the median employee salary. The deferred money goes into a fund that must first be used to pay any fines the institution incurs or to reimburse depositors if the bank fails, before federal deposit insurance kicks in. If the fund runs out, the deferred compensation is cancelled.
Why we flagged it
The bill's core mechanism is restructuring how senior financial executives are paid—deferring a portion and making it forfeit-able if the institution fails or commits misconduct. This is a direct accountability tool, not a tax or subsidy.
What the text implies
- Deferred compensation funds become a quasi-insurance pool that reduces reliance on federal Deposit Insurance Fund, potentially lowering future deposit insurance premiums for all banks and shifting failure costs to executives rather than taxpayers.
- The tiered deferment periods (2–8 years depending on bank size) create incentive for executives to remain employed longer to vest deferred pay, potentially reducing turnover but also locking in risk-takers at large institutions.
The full analysis lists 5 implications of this text.
Who stands to gain
taxpayers (reduced deposit insurance payouts); depositors at failed banks (prioritized recovery from executive deferral funds)