,i #aafth ,,congress #ast ,session ,h4 ,r4 #dgfg ,,in ,,the ,,house ,,of ,,representatives ,october #ba1 #bjai,mr4 ,mc,henry introduced the following bill2 which was referred to the ,committee on ,financial ,services1 and in addition to the ,committee on ,agriculture1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to promote innovation in financial services1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,financial ,services ,innovation ,act of #bjai4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,definitions4 ,sec4 #c4 ,agency identification of regulatory areas4 ,sec4 #d4 ,establishment of ,,fsio at agencies4 ,sec4 #e4 ,,fsio ,liaison ,committee and chair4 ,sec4 #f4 ,petition to agency4 ,sec4 #g4 ,agency determination of petition4 ,sec4 #h4 ,enforceable compliance agreement4 ,sec4 #i4 ,report to ,congress4 ,sec4 #aj4 ,funding4 #b4 ,definitions ,in this ,act1 the following definitions shall apply3 7#a7 ,agency regulation ,the term agency regulation means-- 7,a7 a rule 7as defined in section #eea of title #e1 ,united ,states ,code7 issued by an agency2 7,b7 guidance issued by an agency2 or 7,c7 a published proposed or interim rule1 policy statement1 directive1 adjudication1 or interpretation of an agency4 7#b7 ,agency ,the term agency means each of the ,board of ,governors of the ,federal ,reserve ,system1 the ,bureau of ,consumer ,financial ,protection1 the ,commodity ,futures ,trading ,commission1 the ,department of the ,treasury1 the ,federal ,deposit ,insurance ,corporation1 the ,federal ,housing ,finance ,agency1 the ,federal ,trade ,commission1 the ,national ,credit ,union ,administration ,board1 the ,office of the ,comptroller of the ,currency1 and the ,securities and ,exchange ,commission4 7#c7 ,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 agencies4 7#d7 ,enforceable compliance agreement ,the term enforceable compliance agreement means a contractual agreement described under section #h4 7#e7 ,financial innovation ,the term financial innovation means an innovative financial service or product1 the delivery of which is enabled by technology1 that is or may be subject to an agency regulation or ,federal statute4 7#f7 ,financial ,services ,innovation ,office or ,,fsio ,the term ,financial ,services ,innovative ,office or ,,fsio means an office established in an agency pursuant to section #e4 #c4 ,agency identification of regulatory areas ,not later than #fj days after the date of the enactment of this ,act1 and biannually thereafter1 each agency shall publish in the ,federal ,register a nonexclusive list that identifies #c or more areas of existing regulation-- 7#a7 that apply or may apply to a financial innovation2 and 7#b7 that the agency would consider modifying or waiving if the agency were to receive a petition under section #f relating to that regulation4 #d4 ,establishment of ,,fsio at agencies 7a7 ,in general ,each agency shall establish a ,financial ,services ,innovation ,office 7known as ,,fsio7 to promote financial innovations and to assist a covered person whose petition has been approved under section #g4 7b7 ,director ,each agency shall appoint an individual to serve as the ,director of the agency's ,,fsio4 7c7 ,duties 7#a7 ,general duties ,each agency1 acting through the agency's ,,fsio1 shall-- 7,a7 support the development of financial innovations2 7,b7 coordinate with ,f,s,i,os at other agencies to share information and data2 and 7,c7 establish procedures to reduce the time and cost of offering a financial innovation to the public and enable greater access to financial innovations4 7#b7 ,duties for petitions ,with respect to a covered person whose petition has been approved under section #g1 each ,,fsio shall-- 7,a7 work with the covered person to address issues of how existing regulatory frameworks apply to the financial innovation that is the subject of the petition2 7,b7 assist the covered person in complying with the requirements of ,federal regulators of the financial innovation2 and 7,c7 assist the covered person in responding to any challenges to a modification or a waiver granted under subsection 7d74 7d7 ,waiver authority ,with respect to a covered person whose petition has been approved under section #g1 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 person1 the agency shall1 acting through the agency's ,,fsio1 modify or waive the application of the ,federal statute or the agency regulation4 7e7 ,termination of other programs2 transfer of authority ,not later than #ij days after the establishment of a ,,fsio at an agency1 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 ,,fsio4 ,any legal action or proceeding commenced by or against such office or program of the agency1 including no-action letters and staff advisory opinions1 shall be transferred to the ,,fsio of that agency4 7f7 ,report ,not later than #f months after the date of the enactment of this ,act1 and annually thereafter1 each agency shall submit a report to ,congress and to the ,financial ,stability ,oversight ,council1 and shall present testimony to ,congress1 on the activities of the ,,fsio1 including a description of the petitions considered1 the rationale for acceptance or rejection of petitions1 and the efforts of the ,,fsio to encourage financial innovations4 7g7 ,sunset ,if an agency has not received a petition described in section #f within #e years of the date of the establishment of the agency's ,,fsio1 the agency shall eliminate the ,,fsio1 while continuing to honor any enforceable compliance agreement of another agency4 #e4 ,,fsio ,liaison ,committee and chair 7a7 ,establishment ,not later than #fj days after the date of the enactment of this ,act1 the agencies shall establish a committee to be known as the ,,fsio ,liaison ,committee4 7b7 ,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 7or a successor organization74 7c7 ,duties ,the ,,fsio ,liaison ,committee shall-- 7#a7 consult on the administration1 coordination1 and oversight of each agency's ,,fsio2 7#b7 facilitate the cooperation of each ,,fsio to ensure that agencies share information and data on petitions submitted under section #f2 7#c7 monitor regulatory proposals and developments related to financial innovations2 7#d7 encourage the application of uniform principles and standards at each ,,fsio2 and 7#e7 hold public field hearings #d times a year to informally provide-- 7,a7 information and advice to the public and covered persons2 and 7,b7 a forum to gather information from the public and covered persons4 7d7 ,meetings ,the ,,fsio ,liaison ,committee shall meet at least twice a year4 7e7 ,chair 7#a7 ,establishment ,the first ,chair of the ,,fsio ,liaison ,committee shall be elected by the members4 ,the ,chair shall serve for a term of #b years and thereafter the chairmanship shall rotate among the members of the committee4 7#b7 ,powers of the ,chair ,the ,chair is authorized to carry out the internal administration of the ,,fsio ,liaison ,committee1 including the appointment and supervision of employees and the distribution of tasks among members1 employees1 and administrative units4 7f7 ,testimony ,not later than #f months after the date of the enactment of this ,act1 the ,chair of the ,,fsio ,liaison ,committee shall present testimony to ,congress on the activities of the ,,fsio ,liaison ,committee4 7g7 ,funding 7#a7 ,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 member4 7#b7 ,general expenses ,the costs and expenses of the ,,fsio ,liaison ,committee1 including the salaries of employees1 shall be split equally between1 and paid by1 each agency other than an agency that has eliminated the agency's ,,fsio pursuant to section #d7;g74 #f4 ,petition to agency 7a7 ,in general ,a covered person may submit a petition to an agency1 through the agency's ,,fsio1 in such form and in such manner as the agency's ,,fsio may require1 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 offer4 7b7 ,contents ,in a petition submitted under this section1 the covered person shall-- 7#a7 submit an alternative compliance strategy that proposes a method to comply with the agency regulation or ,federal statutory requirement2 and 7#b7 demonstrate that under the alternative compliance strategy1 the financial innovation-- 7,a7 would serve the public interest2 7,b7 improves access to financial products or services2 and 7,c7 does not present systemic risk to the ,united ,states financial system and promotes consumer protection4 7c7 ,multiparty petitions ,one or more covered persons that offer or intend to offer similar financial innovations may jointly submit a petition under this section4 7d7 ,safe harbor 7#a7 ,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 #g1 an agency may not take an enforcement action against a covered person relating to the financial innovation that was the subject of the petition4 7#b7 ,injunctive relief ,if an agency determines that a financial innovation described under paragraph 7#a7 presents an immediate danger to consumers or presents systemic risk to the ,united ,states financial system1 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 7#a74 7e7 ,notice and comment 7#a7 ,in general ,not later than #cj days after receiving a petition1 the agency that receives the petition shall publish the petition in the ,federal ,register and provide a #fj-;day period for public notice and comment4 7#b7 ,exception for notice and comment period ,the agency that receives the petition may waive the notice and comment period described in paragraph 7#a7 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 #g4 7#c7 ,confidentiality ,the agency shall maintain the confidentiality of any nonpublicly available data or information in any petition submitted under this section4 ,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 information4 #g4 ,agency determination of petition 7a7 ,in general ,not later than #cj days after the end of the comment period described under section #f1 or if the comment period was waived1 not later than #fj days after receipt of a petition under section #f1 the head of the agency receiving the petition shall complete a review of the petition and notify the covered person1 in writing1 of the agency's determination of the petition4 7b7 ,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 strategy1 the agency shall-- 7#a7 approve the petition2 and 7#b7 enter into an enforceable compliance agreement with the covered person in accordance with the requirements of section #h4 7c7 ,disapproval 7#a7 ,explanation ,if the agency rejects a petition1 the agency head shall provide the covered person with a written notice explaining the reason for rejecting the petition1 including-- 7,a7 evidence that the covered person did not satisfy the requirements for establishing an alternative compliance strategy2 7,b7 an identification of the rules or regulations of the agency applicable to the covered person with respect to the financial innovation2 and 7,c7 a description of-- 7i7 any beneficial effects1 including an identification of persons likely to benefit1 from rejecting the petition2 7ii7 any potential costs1 including an identification of persons likely to bear the costs1 of rejecting the petition2 and 7iii7 the baseline used by the agency to measure the likely economic consequences of rejecting the petition4 7#b7 ,resubmittal ,not later than #ij days after receiving a notice of disapproval1 a covered person may revise and resubmit a petition to the agency under section #f4 7d7 ,moratorium ,if an agency disapproves a petition submitted in good faith under this section1 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 petition4 7e7 ,judicial review ,a covered person may seek judicial review of an agency's determination on a petition in accordance with subchapter ,,ii of chapter #e of title #e1 ,united ,states ,code1 and chapter #g of title #e1 ,united ,states ,code 7commonly known as the ,administrative ,procedure ,act74 #h4 ,enforceable compliance agreement 7a7 ,in general ,if an agency approves a petition under section #g1 the covered person may enter into an enforceable compliance agreement with the agency1 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 innovation4 7b7 ,requirements ,each agency1 by rule1 shall establish requirements relating to enforceable compliance agreements that include-- 7#a7 procedures for modifying the terms of the agreement2 7#b7 consequences for failure to comply with the terms of the agreement2 7#c7 a compliance examination process that-- 7,a7 solicits feedback from other agencies on the agreement2 and 7,b7 occurs not less frequently than annually2 7#d7 a termination date for the agreement that is at least #a year after the date on which the agreement is entered into2 7#e7 procedures for extending the termination date2 7#f7 procedures for judicial review of another agency's or ,state's challenge to the agreement in accordance with subchapter ,,ii of chapter #e of title #e1 ,united ,states ,code1 and chapter #g of title #e1 ,united ,states ,code 7commonly known as the ,administrative ,procedure ,act72 and 7#g7 procedures for maintaining the confidentiality of any information disclosed to the agency in making the agreement4 7c7 ,multiparty agreements ,with respect to a financial innovation that is the subject of an enforceable compliance agreement entered into under this section1 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 section4 7d7 ,limitation on enforcement actions 7#a7 ,in general ,if a covered person and an agency enter into an enforceable compliance agreement-- 7,a7 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 agreement2 and 7,b7 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 agreement1 if the covered person provides the ,state with-- 7i7 the enforcement compliance agreement2 and 7ii7 a statement of policies and procedures the covered person has in place to comply with ,state laws that are applicable to the financial innovation4 7#b7 ,state exception for consumer harm ,notwithstanding paragraph 7#a77;,b71 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 if1 in an action brought by the ,state in a court of competent jurisdiction1 the court determines that the agency's action was arbitrary and capricious and the financial innovation has substantially harmed consumers within such ,state4 7e7 ,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 agreement4 #i4 ,report to ,congress ,not later than #a year after the date of the enactment of this ,act1 and annually thereafter1 the ,financial ,stability ,oversight ,council shall submit to ,congress a report on the aggregate impact of enforceable compliance agreements entered into under this ,act1 which shall include-- 7#a7 the number and characteristics of the agreements2 7#b7 the most innovative and least burdensome tools that the agency's ,,fsio has implemented for achieving regulatory ends2 7#c7 strategies implemented to coordinate and facilitate interagency cooperation among agency ,f,s,i,os2 7#d7 the existing ,federal and ,state laws1 regulations1 or practices 7including guidance materials1 examinations1 and enforcement proceedings and settlements7 that the ,financial ,stability ,oversight ,council identifies as the most burdensome to innovation in developing or providing financial products and services1 that adversely affect competition in the financial services industry1 or that restrict improvements for consumers of financial products or services2 and 7#e7 an identification of the overlap or fragmentation of regulation of financial products or services and recommendations for reducing1 consolidating1 or eliminating such overlap or fragmentation4 #aj4 ,funding ,the costs of carrying out the requirements of this ,act 7except as specified in section #e7;g77 shall be split equally between1 and paid by1 each agency for fiscal years #bjag through #bjba4