This Act may be cited as the Incentivizing Safe and Sound Banking Act.

(a) Authority To prohibit stock sales relating to cease and desist orders Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)U.S. Code — Title 12, Section 1818(b)View official source on GovInfo) is amended by inserting at the end the following: (11) Stock sale prohibition The authority to issue an order under this subsection or subsection (c) includes the authority to prohibit the sale of securities of the insured depository institution and any affiliate of such insured depository institution received and owned by any current or former officer or director of the insured depository institution or any institution-affiliated party that received such securities as a form of compensation.. (b) Automatic prohibition Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818U.S. Code — Title 12, Section 1818View official source on GovInfo) is amended by adding at the end the following: (x) Automatic prohibition of stock sale (1) In general If a covered banking institution has a composite or component rating of 3, 4, or 5 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system), or the appropriate Federal banking agency issues a matter requiring immediate attention (or similar supervisory notice, as determined by the appropriate Federal banking agency) to a covered banking institution, and the institution does not remediate the issue by the deadline established by the appropriate Federal banking agency, any senior executive officer may not sell securities of the covered banking institution or any affiliate of the covered banking institution that the individual received as a form of compensation, until the matter is resolved to the satisfaction of the appropriate Federal banking agency. (2) Covered banking institution In this subsection, the term covered banking institution means— (A) a bank holding company with more than $50,000,000,000 in consolidated assets; (B) a bank subsidiary of a bank holding company described under subparagraph (A); or (C) a bank or savings association with more than $50,000,000,000 in consolidated assets..