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Golden Parachute and Indemnification Payments

Open Date:
Open for comment 8/28/2018
Deadline:
All comments are due by 10/12/2018
Type:
Notice of Proposed Rulemaking
Number:
RIN-2590-AA72
Group:
Fannie Mae; Federal Home Loan Banks; Freddie Mac; Supervision and Regulation
Fannie Mae; FHLBanks; Freddie Mac
Document Number:
2018–18511
CFR:
12 CFR 1231
CFR Description:
Golden Parachute and Indemnification Payments
Federal Register Publish Date:
View Document:
 
Contact Information:

​FOR FURTHER INFORMATION CONTACT:  Alfred Pollard, General Counsel, (202) 649-3050, Alfred.Pollard@fhfa.gov; Lindsay Simmons, Assistant General Counsel, (202) 649-3066, Lindsay.Simmons@fhfa.gov; or Mary Pat Fox, Manager for Compensation, Division of Enterprise Regulation, (202) 649-3215, MaryPat.Fox@fhfa.gov. These are not toll-free numbers. The mailing address is: Federal Housing Finance Agency, 400 Seventh Street SW, Washington, DC 20219.  If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services. Additionally, the TDD 1-(800) number referenced in Rulemaking documents attached to this page is obsolete and the 7-1-1 number should be used.

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​SUMMARY:  The Federal Housing Finance Agency (FHFA) is proposing to amend its rule on golden parachute payments to better align the rule with areas of FHFA's supervisory concern and reduce administrative and compliance burdens. The current rule requires FHFA review and consent before a regulated entity or the Office of Finance (OF) enters into an agreement to make, or makes, a payment that is contingent on the termination of an affiliated party, if the regulated entity or OF is in a troubled condition, in conservatorship or receivership, or insolvent. FHFA's experience implementing the rule indicates that the rule requires review of some agreements and payments where there is little risk of excess or abuse, and thus that it is too broad.
        If amended as proposed, the rule would focus on the types of agreements and payments that are of greater supervisory concern to FHFA. In general, these are payments to and agreements with executive officers, broad-based plans covering large numbers of employees (such as severance plans), and payments made to non-executive-officer employees who may have engaged in certain types of wrongdoing. The proposed amendments would also revise and clarify definitions, exemptions, and procedures to implement FHFA's supervisory approach. Where possible, FHFA would also align procedures and outcomes of review under the Golden Parachute Payment Rule with requirements of FHFA's rule on executive compensation. FHFA expects implementation of these changes would result in reduced administrative and compliance burdens.

DATES:  Comments must be received by October 12, 2018.

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