Financial Services Innovation Act of 2022
This bill addresses the regulation of financial products and services. Specifically, the bill allows persons intending to offer a financial innovation to petition specified financial regulatory agencies regarding existing areas of regulation. A petitioner may request a modification or waiver of an agency regulation. The bill sets forth requirements regarding the petition process, a safe harbor for petitioners from enforcement, and enforceable compliance agreements. Agencies must biannually publish a list of financial regulatory areas the agency would consider modifying or waiving through the petition process.
The bill also establishes Financial Services Innovation Offices at these agencies to assist petitioners. These offices must also generally support the development of financial innovations and coordinate with other offices to share data.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9556 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 9556
To promote innovation in financial services, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 14, 2022
Mr. McHenry introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committee on
Agriculture, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To promote innovation in financial services, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial Services
Innovation Act of 2022''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Agency identification of regulatory areas.
Sec. 4. Establishment of FSIO at agencies.
Sec. 5. FSIO Liaison Committee and chair.
Sec. 6. Petition to agency.
Sec. 7. Agency determination of petition.
Sec. 8. Enforceable compliance agreement.
Sec. 9. Report to Congress.
Sec. 10. Funding.
SEC. 2. DEFINITIONS.
In this Act, the following definitions shall apply:
(1) Agency regulation.--The term ``agency regulation''
means--
(A) a rule (as defined in section 551 of title 5,
United States Code) issued by an agency;
(B) guidance issued by an agency; or
(C) a published proposed or interim rule, policy
statement, directive, adjudication, or interpretation
of an agency.
(2) Agency.--The term ``agency'' means each of the Board of
Governors of the Federal Reserve System, the Bureau of Consumer
Financial Protection, the Commodity Futures Trading Commission,
the Department of the Treasury, the Federal Deposit Insurance
Corporation, the Federal Housing Finance Agency, the National
Credit Union Administration Board, the Office of the
Comptroller of the Currency, and the Securities and Exchange
Commission.
(3) Covered person.--The term ``covered person'' means a
person that offers or intends to offer a financial innovation
by submitting a petition to a Financial Services Innovation
Office at one or more agencies.
(4) Enforceable compliance agreement.--The term
``enforceable compliance agreement'' means a contractual
agreement described under section 8.
(5) Financial innovation.--The term ``financial
innovation'' means an innovative financial service or product,
the delivery of which is enabled by technology, that is or may
be subject to an agency regulation or Federal statute.
(6) Financial services innovation office or fsio.--The term
``Financial Services Innovative Office'' or ``FSIO'' means an
office established in an agency pursuant to section 5.
SEC. 3. AGENCY IDENTIFICATION OF REGULATORY AREAS.
Not later than 60 days after the date of the enactment of this Act,
and biannually thereafter, each agency shall publish in the Federal
Register a nonexclusive list that identifies 3 or more areas of
existing regulation--
(1) that apply or may apply to a financial innovation; and
(2) that the agency would consider modifying or waiving if
the agency were to receive a petition under section 6 relating
to that regulation.
SEC. 4. ESTABLISHMENT OF FSIO AT AGENCIES.
(a) In General.--Each agency shall establish a Financial Services
Innovation Office (known as ``FSIO'') to promote financial innovations
and to assist a covered person whose petition has been approved under
section 7.
(b) Director.--Each agency shall appoint an individual to serve as
the Director of the agency's FSIO.
(c) Duties.--
(1) General duties.--Each agency, acting through the
agency's FSIO, shall--
(A) support the development of financial
innovations;
(B) coordinate with FSIOs at other agencies to
share information and data; and
(C) establish procedures to reduce the time and
cost of offering a financial innovation to the public
and enable greater access to financial innovations.
(2) Duties for petitions.--With respect to a covered person
whose petition has been approved under section 7, each FSIO
shall--
(A) work with the covered person to address issues
of how existing regulatory frameworks apply to the
financial innovation that is the subject of the
petition;
(B) assist the covered person in complying with the
requirements of Federal regulators of the financial
innovation; and
(C) assist the covered person in responding to any
challenges to a modification or a waiver granted under
subsection (d).
(d) Waiver Authority.--With respect to a covered person whose
petition has been approved under section 7, if an agency has a rational
basis for doing so and if the agency determines that a provision of a
Federal statute under which the agency has rulemaking authority or an
agency regulation is unduly burdensome to the covered person, the
agency shall, acting through the agency's FSIO, modify or waive the
application of the Federal statute or the agency regulation.
(e) Termination of Other Programs; Transfer of Authority.--Not
later than 90 days after the establishment of a FSIO at an agency, the
agency shall modify any offices or programs at the agency that promote
financial innovations or assist covered persons in developing financial
innovations to operate within the FSIO. Any legal action or proceeding
commenced by or against such office or program of the agency, including
no-action letters and staff advisory opinions, shall be transferred to
the FSIO of that agency.
(f) Report.--Not later than 6 months after the date of the
enactment of this Act, and annually thereafter, each agency shall
submit a report to Congress and to the Financial Stability Oversight
Council, and shall present testimony to Congress, on the activities of
the FSIO, including a description of the petitions considered, the
rationale for acceptance or rejection of petitions, and the efforts of
the FSIO to encourage financial innovations.
(g) Sunset.--If an agency has not received a petition described in
section 6 within 5 years of the date of the establishment of the
agency's FSIO, the agency shall eliminate the FSIO, while continuing to
honor any enforceable compliance agreement of another agency.
SEC. 5. FSIO LIAISON COMMITTEE AND CHAIR.
(a) Establishment.--Not later than 60 days after the date of the
enactment of this Act, the agencies shall establish a committee to be
known as the ``FSIO Liaison Committee''.
(b) Members.--The FSIO Liaison Committee shall be composed of the
Director of each FSIO office and a State banking supervisor selected by
the Conference of State Bank Supervisors (or a successor organization).
(c) Duties.--The FSIO Liaison Committee shall--
(1) consult on the administration, coordination, and
oversight of each agency's FSIO;
(2) facilitate the cooperation of each FSIO to ensure that
agencies share information and data on petitions submitted
under section 6;
(3) monitor regulatory proposals and developments related
to financial innovations;
(4) encourage the application of uniform principles and
standards at each FSIO; and
(5) hold public field hearings 4 times a year to informally
provide--
(A) information and advice to the public and
covered persons; and
(B) a forum to gather information from the public
and covered persons.
(d) Meetings.--The FSIO Liaison Committee shall meet at least twice
a year.
(e) Chair.--
(1) Establishment.--The first Chair of the FSIO Liaison
Committee shall be elected by the members. The Chair shall
serve for a term of 2 years and thereafter the chairmanship
shall rotate among the members of the committee.
(2) Powers of the chair.--The Chair is authorized to carry
out the internal administration of the FSIO Liaison Committee,
including the appointment and supervision of employees and the
distribution of tasks among members, employees, and
administrative units.
(f) Testimony.--Not later than 6 months after the date of the
enactment of this Act, the Chair of the FSIO Liaison Committee shall
present testimony to Congress on the activities of the FSIO Liaison
Committee.
(g) Funding.--
(1) Compensation of members.--Each member of the FSIO
Liaison Committee shall serve without additional compensation
but shall be entitled to reasonable expenses incurred in
carrying out official duties as such a member.
(2) General expenses.--The costs and expenses of the FSIO
Liaison Committee, including the salaries of employees, shall
be split equally between, and paid by, each agency other than
an agency that has eliminated the agency's FSIO pursuant to
section 4(g).
SEC. 6. PETITION TO AGENCY.
(a) In General.--A covered person may submit a petition to an
agency, through the agency's FSIO, in such form and in such manner as
the agency's FSIO may require, to request to enter into an enforceable
compliance agreement containing a modification or waiver of an agency
regulation or Federal statutory requirement under which the agency has
supervisory or rulemaking authority with respect to the covered person
or a financial innovation the covered person offers or intends to
offer.
(b) Contents.--In a petition submitted under this section, the
covered person shall--
(1) submit an alternative compliance strategy that proposes
a method to comply with the agency regulation or Federal
statutory requirement; and
(2) demonstrate that under the alternative compliance
strategy, the financial innovation--
(A) would serve the public interest;
(B) improves access to financial products or
services; and
(C) does not present systemic risk to the United
States financial system and promotes consumer
protection.
(c) Multiparty Petitions.--One or more covered persons that offer
or intend to offer similar financial innovations may jointly submit a
petition under this section.
(d) Safe Harbor.--
(1) In general.--During the period after a covered person
submits a petition under this section and before the agency
receiving the petition makes a determination on the petition
pursuant to section 7, an agency may not take an enforcement
action against a covered person relating to the financial
innovation that was the subject of the petition.
(2) Injunctive relief.--If an agency determines that a
financial innovation described under paragraph (1) presents an
immediate danger to consumers or presents systemic risk to the
United States financial system, the agency may apply to a court
of competent jurisdiction for injunction to prohibit a covered
person from offering such financial innovation during the
period described in paragraph (1).
(e) Notice and Comment.--
(1) In general.--Not later than 30 days after receiving a
petition, the agency that receives the petition shall publish
the petition in the Federal Register and provide a 60-day
period for public notice and comment.
(2) Exception for notice and comment period.--The agency
that receives the petition may waive the notice and comment
period described in paragraph (1) if such agency determines
that the covered person submitting the petition is similarly
situated to another covered person that has been granted
approval of a petition pursuant to section 7.
(3) Confidentiality.--The agency shall maintain the
confidentiality of any nonpublicly available data or
information in any petition submitted under this section. The
agency shall give reasonable consideration to maintaining the
confidentiality of data or information identified by the
covered person in the petition submitting under this section as
nonpublicly available data or information.
SEC. 7. AGENCY DETERMINATION OF PETITION.
(a) In General.--Not later than 30 days after the end of the
comment period described under section 6, or if the comment period was
waived, not later than 60 days after receipt of a petition under
section 6, the head of the agency receiving the petition shall complete
a review of the petition and notify the covered person, in writing, of
the agency's determination of the petition.
(b) Approval.--If the covered person submitting the petition shows
that it is more likely than not that the covered person meets the
requirements for establishing an alternative compliance strategy, the
agency shall--
(1) approve the petition; and
(2) enter into an enforceable compliance agreement with the
covered person in accordance with the requirements of section
8.
(c) Disapproval.--
(1) Explanation.--If the agency rejects a petition, the
agency head shall provide the covered person with a written
notice explaining the reason for rejecting the petition,
including--
(A) evidence that the covered person did not
satisfy the requirements for establishing an
alternative compliance strategy;
(B) an identification of the rules or regulations
of the agency applicable to the covered person with
respect to the financial innovation; and
(C) a description of--
(i) any beneficial effects, including an
identification of persons likely to benefit,
from rejecting the petition;
(ii) any potential costs, including an
identification of persons likely to bear the
costs, of rejecting the petition; and
(iii) the baseline used by the agency to
measure the likely economic consequences of
rejecting the petition.
(2) Resubmittal.--Not later than 90 days after receiving a
notice of disapproval, a covered person may revise and resubmit
a petition to the agency under section 6.
(d) Moratorium.--If an agency disapproves a petition submitted in
good faith under this section, the agency shall provide the covered
person notice and a reasonable amount of time before the agency takes
an enforcement action against the covered person relating to the
financial innovation that was the subject of the petition.
(e) Judicial Review.--A covered person may seek judicial review of
an agency's determination on a petition in accordance with subchapter
II of chapter 5 of title 5, United States Code, and chapter 7 of title
5, United States Code (commonly known as the ``Administrative Procedure
Act'').
SEC. 8. ENFORCEABLE COMPLIANCE AGREEMENT.
(a) In General.--If an agency approves a petition under section 7,
the covered person may enter into an enforceable compliance agreement
with the agency, which shall include the terms under which the covered
person may develop or offer the approved financial innovation to the
public and any requirements of the covered person and any agency with
respect to the financial innovation.
(b) Requirements.--Each agency, by rule, shall establish
requirements relating to enforceable compliance agreements that
include--
(1) procedures for modifying the terms of the agreement;
(2) consequences for failure to comply with the terms of
the agreement;
(3) a compliance examination process that--
(A) solicits feedback from other agencies on the
agreement; and
(B) occurs not less frequently than annually;
(4) a termination date for the agreement that is at least 1
year after the date on which the agreement is entered into;
(5) procedures for extending the termination date;
(6) procedures for judicial review of another agency's or
State's challenge to the agreement in accordance with
subchapter II of chapter 5 of title 5, United States Code, and
chapter 7 of title 5, United States Code (commonly known as the
``Administrative Procedure Act''); and
(7) procedures for maintaining the confidentiality of any
information disclosed to the agency in making the agreement.
(c) Multiparty Agreements.--With respect to a financial innovation
that is the subject of an enforceable compliance agreement entered into
under this section, an agency that did not enter into such enforceable
compliance agreement may join as a party to the enforceable compliance
agreement entered into pursuant to this section.
(d) Limitation on Enforcement Actions.--
(1) In general.--If a covered person and an agency enter
into an enforceable compliance agreement--
(A) another agency may not commence an enforcement
action against the covered person with respect to the
financial innovation that is the subject of the
enforceable compliance agreement; and
(B) a State may not commence an enforcement action
against the covered person with respect to the
financial innovation that is the subject of the
enforceable compliance agreement, if the covered person
provides the State with--
(i) the enforcement compliance agreement;
and
(ii) a statement of policies and procedures
the covered person has in place to comply with
State laws that are applicable to the financial
innovation.
(2) State exception for consumer harm.--Notwithstanding
paragraph (1)(B), a State may commence an enforcement action
against a covered person with respect to a financial innovation
that is the subject of an enforceable compliance agreement if,
in an action brought by the State in a court of competent
jurisdiction, the court determines that the agency's action was
arbitrary and capricious and the financial innovation has
substantially harmed consumers within such State.
(e) Arbitration.--A covered person may elect to arbitrate any
action initiated by another person relating to a financial innovation
that is the subject of the enforceable compliance agreement.
SEC. 9. REPORT TO CONGRESS.
Not later than 1 year after the date of the enactment of this Act,
and annually thereafter, the Financial Stability Oversight Council
shall submit to Congress a report on the aggregate impact of
enforceable compliance agreements entered into under this Act, which
shall include--
(1) the number and characteristics of the agreements;
(2) the most innovative and least burdensome tools that the
agency's FSIO has implemented for achieving regulatory ends;
(3) strategies implemented to coordinate and facilitate
interagency cooperation among agency FSIOs;
(4) the existing Federal and State laws, regulations, or
practices (including guidance materials, examinations, and
enforcement proceedings and settlements) that the Financial
Stability Oversight Council identifies as the most burdensome
to innovation in developing or providing financial products and
services, that adversely affect competition in the financial
services industry, or that restrict improvements for consumers
of financial products or services; and
(5) an identification of the overlap or fragmentation of
regulation of financial products or services and
recommendations for reducing, consolidating, or eliminating
such overlap or fragmentation.
SEC. 10. FUNDING.
The costs of carrying out the requirements of this Act (except as
specified in section 5(g)) shall be split equally between, and paid by,
each agency for fiscal years 2023 through 2027.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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