,,ib ,union ,calendar ,no4 #fed #aahth ,,congress #b;d ,session ,h4 ,r4 #gddj ,report ,no4 #aah-gib ,,in ,,the ,,house ,,of ,,representatives ,february #bc1 #bjbd,mr4 ,mc,henry introduced the following bill2 which was referred to the ,committee on ,financial ,services ,december #d1 #bjbd;,additional sponsors3 ,mr4 ,donalds and ,mr4 ,emmer ,december #d1 #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 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 #bjbd4 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 or designation 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 #b4 ,definitions ,in this ,act1 the following definitions shall apply3 7#a7 ,agency ,the term agency means each of the ,board of ,governors of the ,federal ,reserve ,system1 the ,bureau of ,consumer ,financial ,protection1 the ,department of ,housing and ,urban ,development1 the ,department of the ,treasury1 the ,federal ,deposit ,insurance ,corporation1 the ,federal ,housing ,finance ,agency1 the ,national ,credit ,union ,administration1 the ,office of the ,comptroller of the ,currency1 and the ,securities and ,exchange ,commission4 7#b7 ,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 published1 proposed1 or interim rule1 policy statement1 directive1 adjudication1 or interpretation of an agency4 7#c7 ,bank ,secrecy ,act ,the term ,bank ,secrecy ,act means-- 7,a7 section #ba of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbi;b72 7,b7 chapter #b of title ,i of ,public ,law #ia-ejh 7#ab ,u4,s4,c4 #aiea et seq472 and 7,c7 subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code4 7#d7 ,enforceable compliance agreement ,the term enforceable compliance agreement means an agreement described under section #h4 7#e7 ,financial innovation ,the term financial innovation means a financial product or service 7as defined in section #ajjb of the ,consumer ,financial ,protection ,act of #bjaj 7#ab ,u4,s4,c4 #edha77-- 7,a7 the delivery of which is enabled by technology2 and 7,b7 that is or may be subject to an agency regulation or ,federal statute4 7#f7 ,,fsio ,the term ,,fsio means a ,financial ,services ,innovation ,office established pursuant to section #d4 7#g7 ,person ,the term person means an individual1 partnership1 company1 corporation1 association1 trust1 estate1 cooperative organization1 or other entity4 #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 agency 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 or designation of ,,fsio at agencies 7a7 ,in general ,each agency shall establish or designate an office within the agency to be known as the ,financial ,services ,innovation ,office4 ,each such ,financial ,services ,innovation ,office shall promote financial innovations and assist persons whose petitions are approved under section #g4 7b7 ,administration ,each agency shall designate an individual to serve as the head of the agency's ,,fsio4 7c7 ,duties 7#a7 ,general duties ,the head of each agency's ,,fsio shall-- 7,a7 support the development of financial innovations2 7,b7 coordinate with ,f,s,i,os at other agencies to share information and data about financial innovations2 7,c7 upon request1 coordinate with relevant ,state regulatory entities to provide information to the public with respect to financial innovations and agency regulations related to such financial innovations2 and 7,d7 establish procedures to reduce the regulatory burden of offering a financial innovation to the public and enable greater access to financial innovations4 7#b7 ,duties for petitions ,with respect to a person with an approved petition under section #g1 the head of each agency's ,,fsio shall-- 7,a7 work with the person to address issues of how existing regulatory frameworks of the agency apply to the financial innovation that is the subject of the petition2 7,b7 assist the person in complying with any requirements of the agency with respect to the financial innovation2 and 7,c7 assist the person in responding to any challenges to a modification or a waiver granted under subsection 7d74 7d7 ,waiver authority ,the head of each agency1 acting through the agency's ,,fsio1 may modify or waive the application of an agency regulation of the agency or a ,federal statute under which the agency has rulemaking authority if-- 7#a7 a petition has been approved under section #g2 and 7#b7 the agency determines that compliance with such agency regulation or ,federal statute would impede the ability of a person to offer the financial innovation that is the subject of the petition4 7e7 ,termination of other programs2 transfer of authority 7#a7 ,in general ,not later than #ij days after the establishment or designation of a ,,fsio at an agency1 the agency shall modify any offices or programs at the agency that promote financial innovations or assist persons in offering financial innovations1 and merge or transfer the operations of such offices or programs into the ,,fsio4 7#b7 ,transfer of authority ,on the date that is #ij days after the establishment or designation of a ,,fsio at an agency1 the administration of any rule1 policy1 or prior agency determinations relating to promoting financial innovations or assisting persons in offering financial innovations1 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 present testimony to the ,congress and submit a report to the ,congress and to the ,financial ,stability ,oversight ,council on the activities of the ,,fsio of such agency1 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 #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 head of each ,,fsio described under section #d 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 with the ,,fsio of each agency2 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 proposals for agency regulation and developments related to financial innovations2 7#d7 encourage the application of uniform principles and standards at each ,,fsio2 and 7#e7 facilitate collaboration with relevant ,state regulatory entities to provide information to the public with respect to financial innovations and agency regulations related to such financial innovations4 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 and annually thereafter1 the ,chair of the ,,fsio ,liaison ,committee shall present testimony to the ,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 agency4 #f4 ,petition to agency 7a7 ,in general ,a 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 of the agency or the ,federal statute under which the agency has rulemaking authority with respect to-- 7#a7 the person2 or 7#b7 a financial innovation the person offers or intends to offer4 7b7 ,contents ,in a petition submitted under this section1 the person shall-- 7#a7 identify any requirement under which the agency has rulemaking authority or the agency regulation of the agency for which the person is requesting a modification or waiver2 7#b7 explain why such modification or waiver is essential to the operation of the person2 7#c7 submit an alternative compliance strategy that proposes a method to comply with such requirement or agency regulation2 7#d7 demonstrate that under the alternative compliance strategy1 the financial innovation-- 7,a7 would serve the public interest2 7,b7 improves consumer access to a financial product or service2 7,c7 would not present a national security risk to the ,united ,states2 7,d7 would meet the purposes of anti-money laundering and countering the financing of terrorism obligations under the ,bank ,secrecy ,act2 7,e7 would not present systemic risk to the ,united ,states financial system2 and 7,f7 would promote consumer protection2 7#e7 provide a detailed business plan2 and 7#f7 propose a date on which an enforceable compliance agreement would terminate and explain why such termination date would be appropriate4 7c7 ,multiparty petitions ,one or more persons that offer or intend to offer similar financial innovations may jointly submit a petition under this section4 7d7 ,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 person submitting the petition is similarly situated to another 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 person in the petition submitted under this section4 #g4 ,agency determination of petition 7a7 ,in general ,not later than #cj days after the end of the comment period described under section #f 7or if the comment period was waived1 not later than #ij days after receipt of a petition under section #f71 the head of the agency receiving the petition shall complete a review of the petition and notify the person who submitted the petition1 in writing1 of the agency's determination of the petition4 7b7 ,approval of petition 7#a7 ,in general ,an agency shall approve a petition if the agency has determined that-- 7,a7 the alternative compliance strategy proposed by the person in the petition satisfies the requirements described in section #f7;b77#d72 and 7,b7 the person who submitted the petition has1 with respect to the financial innovation the person offers or intends to offer1 sufficiently identified-- 7i7 the regulations and ,federal statutes of which the person is seeking waiver or modification2 and 7ii7 other applicable regulations and ,federal statutes with which the person intends to comply4 7#b7 ,notification to ,state regulatory agencies ,if an agency approves a petition1 the agency shall1 with respect to each ,state regulatory agency with jurisdiction over the person who submitted the petition or the financial innovation about which the person submitted the petition-- 7,a7 notify such ,state regulatory agency that the agency has approved the petition2 and 7,b7 provide such ,state regulatory agency information about the terms of the enforceable compliance agreement entered into between the person and the agency4 7c7 ,disapproval of petition 7#a7 ,in general ,an agency may disapprove a petition if the agency has determined that-- 7,a7 the alternative compliance strategy proposed by the person in the petition does not satisfy the requirements described in section #f7;b77#d72 or 7,b7 the person who submitted the petition has not1 with respect to the financial innovation the person offers or intends to offer1 sufficiently identified-- 7i7 the regulations and ,federal statutes of which the person is seeking waiver or modification2 and 7ii7 other applicable regulations and ,federal statutes with which the person intends to comply4 7#b7 ,written notice required ,if an agency disapproves a petition the agency shall provide the person who submitted the petition with a written notice explaining the reason for such disapproval and such written notice shall include a description of-- 7,a7 any benefits of disapproving the petition1 including an identification of persons likely to benefit from the disapproval of the petition2 7,b7 any costs1 including potential costs1 of disapproving the petition1 including an identification of persons likely to bear the costs associated with the disapproval of the petition2 and 7,c7 the baseline used by the agency to determine the likely economic consequences of disapproving the petition4 7d7 ,resubmittal ,receipt of a notice of disapproval of a petition under this subsection shall not preclude a person from revising and resubmitting such petition to the agency under section #f4 7e7 ,judicial review ,a 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 such title 7commonly known as the ,administrative ,procedure ,act74 #h4 ,enforceable compliance agreement 7a7 ,in general ,if an agency approves a petition under section #g1 the person who submitted such petition shall enter into an enforceable compliance agreement with such agency1 which shall include-- 7#a7 the terms under which the approved financial innovation may be developed or offered to the public2 and 7#b7 any requirements of the person and such 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 and not more than #c years after the date on which the agreement is entered into2 7#e7 procedures and standards for extending the termination date1 including procedures and standards for evaluating the effectiveness of the agreement2 and 7#f7 procedures for maintaining the confidentiality of any information disclosed to the agency during the process of drafting and entering into agreement4 7c7 ,joining of agreement by additional agencies ,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 ,enforcement actions by non-party agencies ,an agency that is not a party to an enforceable compliance agreement entered into under this section-- 7#a7 may not attempt to enforce1 against the person who is party to the enforceable compliance agreement1 any regulation or ,federal statute modified or waived by the enforceable compliance agreement2 and 7#b7 may continue to enforce1 against the person who is party to the enforceable compliance agreement1 any regulation or ,federal law over which the agency has enforcement authority that has not been modified or waived by the enforceable compliance agreement4 7e7 ,arbitration ,a person who is party to the enforceable compliance agreement may elect to arbitrate any action initiated by another person relating to a financial innovation that is the subject of the enforceable compliance agreement4 7f7 ,rule of construction ,nothing in this ,act shall be construed to limit the ability of an agency to enforce the requirements of an enforceable compliance agreement entered into under this ,act4 #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 the ,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 agencies' ,f,s,i,os have implemented to allow a financial innovation that is the subject of an enforceable compliance agreement to be offered2 7#c7 strategies implemented to coordinate and facilitate cooperation among ,f,s,i,os2 7#d7 the existing ,federal laws1 regulations1 or practices that the ,financial ,stability ,oversight ,council identifies as the most burdensome to innovation 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 agency regulations of financial products or services and recommendations for reducing1 consolidating1 or eliminating such overlap or fragmentation4 ,december #d1 #bjbd,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed