Gruenberg: Incentive pay rulemaking likely delayed until 2024

FDIC Chairman Martin Gruenberg said today that proposed interagency rulemaking to implement incentive pay requirements in the Dodd-Frank Act likely won’t happen before the end of the year. During a House Financial Services Committee oversight hearing on banking and credit union regulators, Rep. Nydia Velázquez (D-N.Y.) asked Gruenberg about comments he made in May suggesting that the regulators would forward with rulemaking to implement Section 956 of the Dodd-Frank Act by year’s end. The provision requires disclosure of executive incentive-based pay and prohibits incentive packages that result in excessive risk-taking, among other things.

Gruenberg told Velázquez that he no longer expects the rulemaking to come before the close of the year. “This is a joint rulemaking involving six agencies… I think we are in general alignment, and I think we’re going to move toward a re-proposed rule. It may not come until the early part of next year.”

Democrats have been stepping up pressure on regulators to move forward with the rule since the failure of Silicon Valley Bank earlier this year. “The statute requires a completed rulemaking within nine months, and it has been 12 years” since the nine-month deadline passed, Velázquez said.