H.R. 6705, the Stopping Bonuses for Unsafe and Unsound Banking Act, prohibits large banks from paying discretionary bonuses to senior executives when federal regulators issue a "Matter Requiring Immediate Attention" notice—a supervisory warning about unsafe or unsound banking practices. The ban applies to banks and bank holding companies with over $50 billion in assets and remains in effect until the regulatory concern is resolved. However, banks can avoid the bonus freeze if they submit an acceptable remediation plan to their federal regulator within a specified deadline and follow through on that plan. The legislation aims to hold bank leadership financially accountable when their institutions face serious regulatory compliance issues, ensuring executives focus on fixing problems rather than receiving bonuses during periods of unsafe banking conditions.
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