Financial regulators again propose incentive-based compensation rule
Regulators proposed rule in 2011, 2016, but it never was finalized
Thirteen years after the rule was supposed to be finalized, on Monday federal banking regulators again proposed a rule governing incentive-based compensation practices at financial institutions.
The proposed rule was issued by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Housing Finance Agency. The National Credit Union Administration is expected to sign on to the proposal in the coming days. After the NCUA signs on, the 200-page proposal will be published in The Federal Register.
Section 956 of the Dodd-Frank Act required the regulators to issue the rule by May 2011. The agencies issued proposals in 2011 and 2016, but they never were finalized. The proposal issued Monday is identical to the one proposed in 2016.
The proposed rule includes prohibitions intended to make incentive-based compensation arrangements at financial institutions with more than $1 billion in assets more sensitive to risk.
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