S. ll
115TH CONGRESS
2D SESSION
A BILL
To promote innovation in financial services, and for other
purposes.
2
1 the Department of the Treasury, the Federal De-
2 posit Insurance Corporation, the National Credit
3 Union Administration Board, the Office of the
4 Comptroller of the Currency, and the Securities and
5 Exchange Commission.
6 (2) AGENCY REGULATION.—The term ‘‘agency
7 regulation’’ means—
8 (A) a rule (as defined in section 551 of
9 title 5, United States Code) issued by an agen-
10 cy;
11 (B) guidance issued by an agency; or
12 (C) a published proposed or interim rule,
13 policy statement, directive, adjudication, or in-
14 terpretation of an agency.
15 (3) COMPLIANCE AGREEMENT.—The term
16 ‘‘compliance agreement’’ means a contractual agree-
17 ment described under section 7.
18 (4) COVERED PERSON.—The term ‘‘covered
19 person’’ means a person that offers or intends to
20 offer a financial innovation by submitting a petition
21 to one or more agencies.
22 (5) FEDERAL FINANCIAL INSTITUTIONS TECH-
3
1 ‘‘FFITC’’ means the Federal Financial Institutions
2 Technology Council established under section 4.
3 (6) FINANCIAL INNOVATION.—The term ‘‘finan-
4 cial innovation’’ means a novel financial service or
5 product enabled by new or emerging technology that
6 reduces costs, reduces risks, provides a better experi-
7 ence for users or consumers, or expands access to
8 affordable financial services or products for histori-
9 cally underserved communities, that is subject to an
10 agency regulation or Federal statute.
11 SEC. 3. FEDERAL FINANCIAL INSTITUTIONS TECHNOLOGY
12 COUNCIL.
4
1 access to affordable financial services or products for
2 historically underserved communities; and
3 (2) promote coordination among the financial
4 regulatory agencies in supervising or regulating fi-
5 nancial innovation to support the benefits of such in-
6 novation and mitigate new risks that innovation may
7 pose.
8 (d) DUTIES.—The FFITC shall—
9 (1) facilitate information sharing and coordina-
10 tion among the member agencies and other Federal
11 and State agencies regarding financial innovation
12 policy development, rulemaking, examinations, re-
13 porting requirements, and enforcement actions;
14 (2) identify gaps in financial regulation or rules
15 or regulations that should be updated to support the
16 benefits of financial innovation and mitigate the new
17 risks that financial innovation may pose;
18 (3) establish uniform principles and standards
19 for the petition process to be applied by each agency
20 under section 5;
21 (4) facilitate the cooperation of each agency to
22 ensure that agencies share information and data on
23 petitions submitted under section 5;
24 (5) establish uniform procedures for agencies
25 relating to financial innovations, including pilot pro-
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1 grams, working groups, or standalone offices of in-
2 novation at each agency; and
3 (6) create and maintain a website for the public
4 that shares information about the actives of the
5 Council and contains—
6 (A) a link for each member agency where
7 a covered person can find more information
8 about the petition process under section 5 at
9 the agency; and
10 (B) a contact phone number or email ad-
11 dress for the financial innovation office or point
12 person at each member agency that could be
13 used to request more information about finan-
14 cial innovation and the petition process under
15 section 5.
16 (e) CHAIR.—
17 (1) ESTABLISHMENT.—The first Chair of the
18 FFITC shall be elected by the members. The Chair
19 shall serve for a term of 2 years and thereafter the
20 chairmanship shall rotate among the members of the
21 council.
22 (2) POWERS OF THE CHAIR.—The Chair is au-
23 thorized to carry out the internal administration of
24 the FFITC, including the appointment and super-
25 vision of employees and the distribution of tasks
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1 among members, employees, and administrative
2 units.
3 (3) DUTIES OF THE CHAIR.—The Chair shall—
4 (A) serve as a dedicated point of contact
5 for inquires made by business entities or other
6 organizations engaged with financial innovation;
7 (B) provide generalized information con-
8 sisting of publicly available materials rule-
9 making, examinations, reporting requirements,
10 and enforcement actions that may be useful to
11 innovators developing and implementing finan-
12 cial innovations; and
13 (C) offer feedback regarding the regulatory
14 framework of the member agencies of the
15 FFITC that may help innovators understand
16 relevant regulations and agency approaches to
17 oversight for their financial innovation.
18 (f) FUNDING.—
19 (1) COMPENSATION OF MEMBERS.—Each mem-
20 ber of the FFITC shall serve without additional
21 compensation but shall be entitled to reasonable ex-
22 penses incurred in carrying out official duties as
23 such a member.
24 (2) GENERAL EXPENSES.—The costs and ex-
25 penses of the FFITC, including the salaries of em-
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1 ployees, shall be split equally between, and paid by,
2 each agency.
3 SEC. 4. FFITC STUDY AND RECOMMENDATIONS REGARD-
4 ING INNOVATION.
8
1 (1) explain how the financial service or product
2 that the covered person offers or intends to offer is
3 a financial innovation that accomplishes one or more
4 of the following goals:
5 (A) Reduces costs.
6 (B) Reduces risks.
7 (C) Provides a better experience for users
8 or consumers.
9 (D) Expands access to affordable financial
10 services or products for historically underserved
11 communities.
12 (E) Improves compliance with an existing
13 agency rule or rules.
14 (F) Improves cybersecurity;
15 (2) propose and explain the desired time period
16 for the compliance agreement that is sought;
17 (3) propose and explain the proposed size of the
18 deployment of the innovation under the compliance
19 agreement in terms of number of consumers or users
20 or other appropriate metric;
21 (4) submit a compliance strategy that proposes
22 a method to comply with the agency regulation or
23 Federal statutory requirement;
24 (5) demonstrate that under the compliance
25 strategy, the financial innovation—
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1 (A) serves the public interest;
2 (B) does not present systemic risk to the
3 United States financial system; and
4 (C) as applicable, promotes consumer and
5 investor protection;
6 (6) provide a plan for protecting consumers or
7 users, including mitigating or remediating potential
8 harms;
9 (7) provide a plan for unwinding the product or
10 service in the event that the terms of the compliance
11 agreement cannot be met;
12 (8) establish criteria for evaluating the efficacy
13 of the financial innovation in meeting the goals iden-
14 tified in the petition; and
15 (9) submit a periodic reporting plan to dem-
16 onstrate compliance with the terms and conditions of
17 the compliance agreement.
18 (c) MULTIPARTY PETITIONS.—One or more covered
19 persons that offer or intend to offer similar financial inno-
20 vations may jointly submit a petition under this section.
21 (d) ADMINISTRATIVE AUTHORITY.—With respect to
22 a covered person whose petition has been approved under
23 section 6, the agency must make a determination that
24 there exists significant regulatory uncertainty that poses
25 a barrier to the financial innovation. If an agency has a
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1 rational basis for making this determination, the agency
2 shall have the authority to enter into a compliance agree-
3 ment with the covered person and to modify its application
4 of an agency regulation according to the terms of the com-
5 pliance agreement.
6 (e) AGENCY ADJUDICATION.—
7 (1) IN GENERAL.—During the period after a
8 covered person submits a petition under this section
9 and before the agency receiving the petition makes
10 a determination on the petition pursuant to section
11 6, the head of the agency receiving the petition may
12 not take an enforcement action against a covered
13 person on the basis of the information provided in
14 the petition that was submitted in good faith.
15 (2) INJUNCTIVE RELIEF.—If the head of an
16 agency determines that a financial innovation de-
17 scribed under paragraph (1) presents an imminent
18 danger to consumers, presents systemic risk to the
19 United States financial system, or is a per se viola-
20 tion of a Federal statute, such head of the agency
21 may apply to a court of competent jurisdiction for
22 an injunction to prohibit a covered person from of-
23 fering such financial innovation during the period
24 described in paragraph (1).
25 (f) NOTICE AND COMMENT.—
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1 (1) IN GENERAL.—Not later than 30 days after
2 receiving a petition, the head of the agency that re-
3 ceives the petition shall publish the petition in the
4 Federal Register and provide a 60-day period for
5 public notice and comment.
6 (2) CONFIDENTIALITY.—The agency shall
7 maintain the confidentiality of any nonpublicly avail-
8 able data or information in any petition submitted
9 under this section. The agency shall give reasonable
10 consideration to maintaining the confidentiality of
11 data or information identified by the covered person
12 in the petition submitted under this section as non-
13 publicly available data or information.
14 SEC. 6. AGENCY DETERMINATION OF PETITION.
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1 (2) enter into a compliance agreement with the
2 covered person in accordance with the requirements
3 of section 7.
4 (c) DISAPPROVAL.—
5 (1) EXPLANATION.—If the head of the agency
6 rejects a petition, the head of the agency shall pro-
7 vide the covered person with a written notice ex-
8 plaining the reason for rejecting the petition, includ-
9 ing—
10 (A) evidence that the covered person did
11 not satisfy the requirements for establishing an
12 alternative compliance strategy; and
13 (B) an identification of the rules or regula-
14 tions of the agency applicable to the covered
15 person with respect to the financial innovation.
16 (2) RESUBMITTAL.—Not later than 90 days
17 after receiving a notice of disapproval, a covered per-
18 son may revise and resubmit a petition to the agency
19 under section 5.
20 (d) PERIOD TO CURE.—If the head of an agency dis-
21 approves a petition submitted in good faith under this sec-
22 tion, the head of the agency shall provide the covered per-
23 son a reasonable amount of time before the agency takes
24 an enforcement action against the covered person relating
25 to the compliance agreement sought in the petition.
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1 SEC. 7. COMPLIANCE AGREEMENT.
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1 date on which the agreement is entered into but not
2 longer than 2 years;
3 (5) procedures for extending the termination
4 date; and
5 (6) procedures for maintaining the confiden-
6 tiality of any information disclosed to the agency in
7 making the alternative compliance agreement.
8 (c) MULTIPARTY AGREEMENTS.—With respect to a
9 financial innovation that is the subject of an compliance
10 agreement entered into under this section, an agency that
11 did not enter into such compliance agreement may join
12 as a party to the compliance agreement entered into pur-
13 suant to this section.
14 (d) RULES OF CONSTRUCTION.—
15 (1) AGENCY.—If a covered person and an agen-
16 cy enter into a compliance agreement, except as pro-
17 vided in paragraph (2), another agency may not
18 commence an enforcement action against the covered
19 person with respect to compliance with the specific
20 rule or rules that are the subject of the compliance
21 agreement.
22 (2) STATE.—This Act may not be construed as
23 annulling, altering, or affecting, or exempting any
24 person subject to the provisions of this title from
25 complying with, the statutes, regulations, orders, or
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1 interpretations in effect in any State, except to the
2 extent that any such provision conflicts with, or are
3 inconsistent with the covered agreement.
4 (3) GREATER PROTECTION UNDER STATE
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1 (2) extend the termination date of the compli-
2 ance agreement; or
3 (3) terminate the compliance agreement.
4 SEC. 8. REPORT TO CONGRESS.