,,ib ,union ,calendar ,no4 #fae #aahth ,,congress #b;d ,session ,h4 ,r4 #gdcg ,report ,no4 #aah-gbh ,,in ,,the ,,house ,,of ,,representatives ,february #bc1 #bjbd,mrs4 ,houchin 7for herself1 ,mr4 ,foster1 and ,mr4 ,hill7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,november #a1 #bjbd;,additional sponsor3 ,ms4 ,pettersen ,november #a1 #bjbd,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed,strike out all after the enacting clause and insert the part printed in italic,for text of introduced bill1 see copy of bill as introduced on ,february #bc1 #bjbd ,a ,,bill ,to require certain supervisory agencies to assess their technological vulnerabilities1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,fostering the ,use of ,technology to ,uphold ,regulatory ,effectiveness in ,supervision ,act4 #b4 ,findings ,congress finds the following3 7#a7 ,banking regulators continue to examine and monitor depository institutions without access to real-time information4 7#b7 ,risk surrounding technology procurement may present challenges for updating supervisory technology4 7#c7 ,to ensure that prudential supervision is effective and sustainable in the digital age1 agencies must leverage new technologies to allow for the financial monitoring necessary to preserve a safe and sound banking system4 7#d7 ,new technological tools are also necessary in order for agencies to effectively fulfill mandates other than prudential supervision1 including their mandates to assure consumer protection and monitor ,bank ,secrecy ,act compliance4 7#e7 ,agencies' reliance on outdated technology creates vulnerabilities for the financial system1 causing-- 7,a7 difficulties in collecting1 compiling1 and analyzing relevant information about risks and noncompliance at supervised firms2 7,b7 reliance on information that is inaccurate1 incomplete1 or not timely2 7,c7 reliance on limited and outdated tools for data analysis2 7,d7 difficulties in using data to identify risk trends2 7,e7 difficulties in producing accurate and timely reports2 7,f7 inadequacy of cybersecurity safeguards2 and 7,g7 failure to detect illegal activities4 7#f7 ,the rapid expansion of financial firms' use of artificial intelligence may generate opportunities to improve the financial system while also introducing a range of risks1 making it essential that agencies be equipped with the technology and skills needed to analyze these opportunities and potential risks4 7#g7 ,while agencies assess their supervisory capabilities on an ongoing basis1 it is imperative that there be a unified goal to enhancing supervisory technologies that ensures effective and sustainable oversight in the digital age4 #c4 ,technological vulnerabilities and procurement practices assessment 7a7 ,in general 7#a7 ,technological vulnerabilities assessment ,each covered agency shall1 not later than #ahj days after the date of the enactment of this section1 assess how existing technological systems used by the covered agency prevent the covered agency from conducting real-time supervisory assessments of entities over which the covered agency has supervisory authority1 including effects stemming from-- 7,a7 core information technology infrastructure2 7,b7 technology used to supervise entities1 including supervisory technological tools2 and 7,c7 technology for monitoring general market risks using reported data and external data4 7#b7 ,procurement practices assessment ,each covered agency shall1 not later than #ahj days after the date of the enactment of this section-- 7,a7 assess the procurement rules and protocols adhered to by such covered agency when such covered agency acquires or develops new technological systems2 and 7,b7 identify any challenges created by such procurement rules and protocols1 including the impact such rules or protocols have on the ability of the covered agency to test new technological systems4 7b7 ,report ,not later than #a year after the completion of the assessments required under subsection 7a71 and every #e years thereafter1 the covered agencies shall coordinate and jointly submit to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate a report that includes the following with respect to each covered agency-- 7#a7 a general overview of hardware and software used for information gathering and advanced analytics during supervision activities1 including products purchased from technology vendors and products developed by the covered agency or contractors of the covered agency2 7#b7 a description of the procurement practices and protocols of the covered agency1 including a description of-- 7,a7 whether such processes are voluntarily adhered to or mandated2 and 7,b7 any challenges resulting from such practices and protocols and relevant factors1 if any1 that have impacted the covered agency's ability to obtain new technology2 7#c7 a general overview of the portion of workforce of the covered agency that is engaged primarily in technology development within the covered agency1 including-- 7,a7 an overview of the ability of the covered agency to recruit and retain appropriate technology experts2 7,b7 employee self-reported workforce data2 and 7,c7 a description of the degree to which the covered agency relies on contractors to design1 develop1 or deploy technology and perform technology-related tasks2 7#d7 a description of the processes used by the covered agency to obtain information from entities supervised by the covered agency and general information about market trends and risks2 7#e7 a description of the ways in which the covered agency shares information or system access with other covered agencies2 7#f7 an evaluation of the level of ease or difficulty experienced by the covered agency1 including any legal or regulatory challenges1 when-- 7,a7 sharing data with other government agencies2 or 7,b7 collecting data from entities supervised by the covered agency2 7#g7 an evaluation of cost for supervised entities to modify systems to share data with covered agencies2 and 7#h7 a description of any plans the covered agency has that relate to how the covered agency will implement future upgrades to the technology used by the covered agency to supervise entities supervised by the covered agency1 including-- 7,a7 a general description of any planned upgrades2 7,b7 the anticipated timeline for any planned upgrades2 7,c7 the costs of any planned upgrades2 7,d7 any concerns about access to needed resources2 7,e7 intended efforts for hiring and training individuals as part of any technological upgrades2 7,f7 any aspects of any planned upgrades that should be addressed on an interagency basis2 and 7,g7 any anticipated challenges and solutions associated with entities supervised by the covered agency adapting to new reporting requirements1 including-- 7i7 estimates of transition costs2 and 7ii7 estimates of any potential cost reductions4 7c7 ,covered agency defined ,in this section1 the covered agency means the ,board of ,governors of the ,federal ,reserve ,system1 the ,federal ,deposit ,insurance ,corporation1 ,office of the ,comptroller of the ,currency1 the ,bureau of ,consumer ,financial ,protection1 and the ,national ,credit ,union ,administration4 ,november #a1 #bjbd,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed