Stopping Bonuses for Unsafe and Unsound Banking Act

# Stopping Bonuses for Unsafe and Unsound Banking Act (HR 6705) **What the Bill Would Do** This bill would restrict executive bonuses at banks that regulators determine are operating in an unsafe or unsound manner. If a bank receives a regulatory warning about its financial practices or operations, the bill would limit how much executives can be paid in bonuses until the bank corrects the problems. The goal is to discourage risky banking behavior by directly affecting executive compensation when banks are mismanaged or engage in unsafe practices. **Who It Affects and Key Provisions** The bill primarily affects senior executives and leaders at financial institutions that fall under federal banking supervision.

It would give banking regulators the authority to identify banks with safety and soundness concerns, which would then trigger bonus restrictions for that institution's executives. The logic behind the bill is that by tying executive pay to safe banking practices, it creates financial incentives for leaders to operate responsibly rather than take excessive risks. **Current Status** HR 6705 is currently in committee and has not been voted on by the full House. The bill was introduced by Representative Brittany Pettersen (D-Colorado) in the 119th Congress.