Page:United States Statutes at Large Volume 122.djvu/2702

 12 2 STA T . 2 679PUBLIC LA W 11 0– 2 8 9 —J UL Y3 0, 2008 orent er i nto a na g ree m ent w it hsuc he x ecuti v eo f ficer , without the a p prova l of the D irector, for matters b eing reviewe d under section 13 1 8 of the F ederal H ousing E nterprises Financial S afet y and Soundness A ctof1 9 9 2( 12 U. S. C . 45 18 ) . ’ ’. SEC.1 11 4 . LIM I TONG OL D EN PAR AC HU TES. Section 1318 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the end the following

‘(e) A UTHORI T YT O REG U LA TE OR P ROHI B IT CERTAI N FOR MS O FB ENEFITS TO AFFILIATE D PARTIES. — ‘‘(1) G OLDEN P ARA C HUTES AND INDEMNIFICATION PAY - MENTS.—The Director may prohibit or limit, by regulation or order, any golden parachute payment or indemnification pay- ment. ‘‘(2) FACTORS TO BE TA K EN INTO ACCOUNT.—The Director shall prescribe, by regulation, the factors to be considered by the Director in ta k ing any action pursuant to paragraph (1), which may include such factors as— ‘‘(A) whether there is a reasonable basis to believe that the affiliated party has committed any fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the regulated entity that has had a material effect on the financial condition of the regulated entity ‘‘(B) whether there is a reasonable basis to believe that the affiliated party is substantially responsible for the insolvency of the regulated entity, the appointment of a conservator or receiver for the regulated entity, or the troubled condition of the regulated entity (as defined in regulations prescribed by the Director); ‘‘(C) whether there is a reasonable basis to believe that the affiliated party has materially violated any applicable provision of Federal or State law or regulation that has had a material effect on the financial condition of the regulated entity; ‘‘(D) whether the affiliated party was in a position of managerial or fiduciary responsibility; and ‘‘(E) the length of time that the party was affiliated with the regulated entity, and the degree to which— ‘‘(i) the payment reasonably reflects compensation earned over the period of employment; and ‘‘(ii) the compensation involved represents a reasonable payment for services rendered. ‘‘(3) CERTAIN PAYMENTS PROHIBITED.— N o regulated entity may prepay the salary or any liability or legal expense of any affiliated party if such payment is made— ‘‘(A) in contemplation of the insolvency of such regu- lated entity, or after the commission of an act of insolvency; and ‘‘(B) with a view to, or having the result of— ‘‘(i) preventing the proper application of the assets of the regulated entity to creditors; or ‘‘(ii) preferring one creditor over another. ‘‘(4) GOLDEN PARACHUTE PAYMENT DEFINED.— ‘‘(A) I N GENERAL.—For purposes of this subsection, the term ‘golden parachute payment’ means any payment (or Regulations.

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