H.R. 7887 — Incentivizing Safe and Sound Banking Act

This section amends section 8 of the Federal Deposit Insurance Act to (1) authorize the FDIC Board, when issuing cease-and-desist orders, to prohibit current or former officers, directors, or institution-affiliated parties from selling securities of the insured depository institution or any affiliate received as compensation; and (2) automatically prohibit senior executive officers of covered banking institutions from selling such securities if the institution receives a composite or component supervisory rating of 3, 4, or 5 under the Uniform Financial Institutions Rating System (or equivalent), or fails to remediate a matter requiring immediate attention by the appropriate federal banking agency's deadline, until resolved to the agency's satisfaction. Covered banking institutions include bank holding companies with more than $50 billion in consolidated assets, their bank subsidiaries, and standalone banks or savings associations exceeding $50 billion in assets.