New Federal Deposit Insurance Corp. rules limiting severance payments to executives at troubled banks and thrifts will not be applied retroactively.
The decision means the agency will allow bankers whose contracts already contain so-called golden parachutes to collect the severance payments, even if they exceed limits in the new rules.
The rule limits severance packages at ailing banks and thrifts to one year's pay. It does not affect healthy banks.
The agency did include a warning. It reserves the right to reject deals crammed in right before the rule's April 1 effective date.
Robert Miailovich, the FDIC's associate director of supervision policy, said making the rule retroactive was unnecessary.
"We saw no compelling reason to apply the rule in that way," Mr. Miailovich said.
Such a move was not needed because so few institutions are affected, he said. Mr. Miailovich also said the agency is convinced that most recent golden parachute agreements have been made with the new rules in mind.
However, Mr. Miailovich added that the agency "would not look favorably upon" banks that made too many of the agreements since March, possibly to circumvent the effect of the rule. He said such cases would be studied on an individual basis.
