U.S. FDIC says "very concerned" about excessive pay

WASHINGTON (Reuters) - The Federal Deposit Insurance Corp is "very concerned" about excessive compensation at financial companies and intends to pursue claims when the pay affects the safety and soundness of banks, an official said in testimony prepared for a Congressional hearing on Friday.

"The FDIC is very concerned about the excessive compensation and executive bonuses that have dominated the news in recent weeks with regard to financial institutions," said Martin Gruenberg, FDIC vice chairman.

Public outrage intensified this week after it was revealed that American International Group Inc paid out $165 million in executive bonuses, despite having received up to $180 billion in U.S. aid.

Gruenberg said it is often difficult for the FDIC to prove claims of excessive compensation in federal court, but the agency does "have enforcement tools available to use in cases where such schemes affect the safety and soundness of institutions or they involve a breach of fiduciary duty."

Gruenberg's testimony was prepared for a hearing on financial fraud by the U.S. House Financial Services Committee, and was posted on the committee's website on Thursday.

He also said in his testimony the FDIC has asked Congress to give all federal banking regulators rulemaking authority to crack down on unfair or deceptive acts.

Currently the Federal Reserve and Office of Thrift Supervision can write rules on such acts, but the FDIC and Office of the Comptroller of the Currency (OCC) do not have the authority.

The FDIC oversees about 5,000 banks, and the OCC supervises about 1,700 of the nation's largest banks.

"The FDIC's perspective -- as deposit insurer and as supervisor for the largest number of banks, many of whom are small community banks -- would provide valuable input and expertise to the rulemaking process," Gruenberg said.

In separate testimony to be delivered Friday, the U.S. Comptroller of the Currency John Dugan said the number of "problem" national banks has grown to 182 as of February 17, 2009, compared to 77 in February 2008.

(Reporting by Karey Wutkowski; editing by Jeffrey Benkoe)