Guidance Issued On Financial Institutions Incentive-Based Compensation Arrangements

Seven federal regulators of financial institutions jointly issued proposed rules ("Proposed Rules") on March 30, 2011 which would implement the requirements of section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"). The Proposed Rules were issued jointly by the Securities and Exchange Commission ("SEC"), the National Credit Union Administration ("NCUA"), the Federal Deposit Insurance Corporation ("FDIC"), the Office of the Comptroller of the Currency ("OCC"), the Board of Governors of the Federal Reserve System ("FRB"), the Office of Thrift Supervision ("OTS"), and the Federal Housing Finance Agency ("FHFA") (the "Agencies"). These rules, if enacted, would prohibit "covered financial institutions" with total consolidated assets of $1 billion or more ("Covered Entities") from providing incentive-based compensation arrangements which encourage inappropriate risk by providing excessive compensation or which could lead to material