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Federal Register / Vol. 86, No. 44 / Tuesday, March 9, 2021 / Rules and Regulations
and similar items that expand the longterm capability of an ECIP recipient to provide products and services to its customers and community are not excessive or luxury expenditures.
Excessive or luxury expenditures policy means written standards applicable to the ECIP recipient and its employees that address the five categories of expenses set forth in the definition of excessive or luxury expenditures, and that are reasonably designed to eliminate excessive and luxury expenditures. Such written standards must:
1 Identify the types or categories of expenditures which are prohibited which may include a threshold expenditure amount per item, activity, or event or a threshold expenditure amount per employee receiving the item or participating in the activity or event;
2 Identify the types or categories of expenditures for which prior approval is required which may include a threshold expenditure amount per item, activity, or event or a threshold expenditure amount per employee receiving the item or participating in the activity or event;
3 Provide reasonable approval procedures for expenditures requiring prior approval;
4 Require the ECIP recipient to deliver a certification, executed by two senior executive officers one of which must be its principal executive officer or principal financial officer certifying that the approval of any expenditure requiring the prior approval of any senior executive officer, any executive officer of a substantially similar level of responsibility, or the ECIP recipients board of directors or a committee of such board of directors, was properly obtained with respect to each such expenditure;
5 Require the prompt internal reporting of violations to an appropriate person or persons identified in this policy; and 6 Mandate accountability for adherence to the policy.
FDIC means the Federal Deposit Insurance Corporation.
Federal Reserve Board means the Board of Governors of the Federal Reserve System.
NCUA means the National Credit Union Administration.
Non-senior security means any equity interest or equivalent interest including but not limited to membership share interests in the case of a credit union or any other interest in, or instrument issued by, an ECIP recipient that is pari passu with, or junior to, the ECIP
investment with respect to capital distributions or ranking in liquidation,
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including but not limited to the common stock or equivalent equity interest of the ECIP recipient, or any equity interest or equivalent interest or any other interest in or instrument issued by a depository institution holding company of which the ECIP
recipient is a subsidiary.
OCC means the Office of the Comptroller of the Currency.
Principal executive officer means the chief executive officer of an ECIP
recipient or individual performing a similar function.
Principal financial officer means the chief financial officer of an ECIP
recipient or individual performing a similar function.
Senior executive officer means an ECIP recipients president, any vice president in charge of a principal business unit, division or function, any other officer who performs a policy making function, or any other person who performs similar policy making functions.
Severance payment means any payment or benefit provided to an officer or employee of an ECIP recipient in connection with any termination of such officer or employees employment with the ECIP recipient including resignation, severance, retirement, or constructive termination, except for payment for services performed or benefits accrued. A severance payment includes cash payments, health care benefits, perquisites, the enhancement or acceleration of any payment or vesting of any payment or benefit, or any other in-kind benefit payable or provided in connection with any termination of an officer or employee of the ECIP recipient.
Total compensation means all compensation, other than any severance payment, provided by an ECIP recipient to an officer or employee, including salary, wages, bonuses, awards of stock, deferred compensation, and other financial benefits.
35.22

Restrictions on compensation.

a Restriction on executive compensation. An ECIP recipient must ensure that the total compensation paid to its senior executive officers is appropriate and not excessive. Unless informed otherwise by the Department of the Treasury, an ECIP recipient is considered to have satisfied the requirements regarding executive compensation in this section if it, and, if applicable, all insured depository institution subsidiaries of the ECIP
recipient, maintains compliance with the following or any successor requirement, as applicable:

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1 For an ECIP recipient or subsidiary of an ECIP recipient that is an insured depository institution, except for federally insured credit unions, the Interagency Guidelines Establishing Standards for Safety and Soundness as issued by the appropriate Federal banking agency for the ECIP recipient or subsidiary i.e., for national banks and Federal savings associations, 12 CFR
part 30, appendix A; state member banks, 12 CFR part 208, appendix D1;
insured state nonmember banks and state savings associations, 12 CFR part 364, appendix A;
2 For an ECIP recipient that is a bank holding company, the requirements for corporate practices of bank holding companies as issued by the Federal Reserve Board at 12 CFR
225.4;
3 For an ECIP recipient that is a savings and loan holding company, the requirements regarding safe and sound operations of savings and loan holding companies as issued by the Federal Reserve Board at 12 CFR 238.8; and 4 For an ECIP recipient that is a federally insured credit union, the requirements on compensation and benefits for federally insured credit unions as issued by the NCUA at 12
CFR 701.19a; 12 CFR 701.21c8; 12
CFR 702.203b10; and 12 CFR
702.204b10.
b Restriction on severance payments. An ECIP recipient shall not make excessive severance payments to any senior executive officer. Unless informed otherwise by the Department of the Treasury, an ECIP is considered to have satisfied the requirements regarding severance payments in this section if it maintains compliance with the following or any successor requirement, as applicable:
1 For an ECIP recipient that is an insured depository institution, a bank holding company or a savings and loan holding company, the limits and prohibitions to enter into contracts to pay and to make golden parachute and indemnification payments to institution-affiliated parties to the extent applicable to the ECIP recipient, as issued by the FDIC at 12 CFR part 359;
and 2 For an ECIP recipient that is a federally insured credit union, the limits and prohibitions on the ability of federally insured credit unions to enter into contracts to pay and to make golden parachute and indemnification payments to institution-affiliated parties as issued by the NCUA at 12 CFR 750.1.
c Excessive or luxury expenditures.
1 Ninety days after an ECIP investment date with respect to an ECIP recipient, the board of directors of the ECIP

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