,i #aaith ,,congress #b;d ,session ,h4 ,r4 #hcie ,,in ,,the ,,house ,,of ,,representatives ,april #ba1 #bjbf,mrs4 ,kim 7for herself and ,mr4 ,liccardo7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to provide for the regulation of registered covered providers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,payments ,access and ,consumer ,efficiency ,act of #bjbf or the ,,pace ,act of #bjbf4 #b4 ,definitions ,in this ,act3 7#a7 ,board ,the term ,board of ,governors means the ,board of ,governors of the ,federal ,reserve ,system4 7#b7 ,comptroller ,the term ,comptroller means the ,comptroller of the ,currency4 7#c7 ,covered provider ,the term covered provider means a person that provides payment services and-- 7,a7 holds at least #dj active money transmitter licenses issued in accordance with the laws of each applicable ,state in which the applicant seeks to offer such payment services2 7,b7 holds a depository institution 7as defined in section #c7;c7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7;c777 charter from the ,state in which the applicant seeks to offer such payment services2 or 7,c7 holds a ,state credit union 7as defined in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb77 charter from the ,state in which the applicant seeks to offer such payment services4 7#d7 ,covered ,state regulator ,the term covered ,state regulator means a ,state agency that has issued a charter or license to a registered covered provider4 7#e7 ,deposit ,the term deposit has the meaning given in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#f7 ,insured depository institution ,the term insured depository institution has the meaning given in section #b of the ,,genius ,act 7#ab ,u4,s4,c4 #eija74 7#g7 ,monetary value ,the term monetary value means a medium of exchange4 7#h7 ,outstanding payment obligations ,the term outstanding payment obligations means the amount of payment service obligations incurred by a registered covered provider but not yet paid4 7#i7 ,payment instrument ,the term payment instrument means a physical or electronic check1 draft1 money order1 traveler's check1 or card or other means of access to an account or other instrument for the transmission or payment of monetary value4 ,the term does not include stored value4 7#aj7 ,payment service ,the term payment service-- 7,a7 means-- 7i7 receiving monetary value for transmission or transmitting monetary value2 7ii7 receiving monetary value from a payor on behalf of a payee for goods or services provided by the payee2 7iii7 selling or issuing stored value2 7iv7 selling or issuing payment instruments2 and 7v7 providing access or custody services with respect to monetary value2 and 7,b7 does not include the provision solely of online or telecommunications services or network access4 7#aa7 ,payments reserve account ,the term payments reserve account means an account held at a ,federal reserve bank that includes access to ,fedwire ,funds ,service1 ,fed,now ,service1 and ,fed,a,c,h ,services 7including access to necessary relevant contingent services1 as determined by the ,board of ,governors of the ,federal ,reserve ,system74 7#ab7 ,registered covered provider ,the term registered covered provider means a covered provider that has registered with the ,comptroller in accordance with the requirements of this ,act4 7#ac7 ,state ,the term ,state means each ,state of the ,united ,states1 the ,district of ,columbia1 and each territory or possession of the ,united ,states4 7#ad7 ,stored value ,the term stored value has the meaning given in section #ajjb7bh7 of the ,consumer ,financial ,protection ,act of #bjaj 7#ab ,u4,s4,c4 #edha7bh774 #c4 ,federal registration of eligible state payment service providers 7a7 ,registration of payment service providers 7#a7 ,registration ,a covered provider may submit an application to register with the ,comptroller to become a registered covered provider4 7#b7 ,evaluation ,the ,comptroller shall evaluate an application received under paragraph 7#a7 using only the factors specified under paragraph 7#c74 7#c7 ,factors ,the factors specified in this paragraph are the following3 7,a7 ,the applicant is limited to engaging in activities that directly support or are incidental to the provision of payment services4 7,b7 ,the applicant is able to meet the requirements of sections #d and #e4 7,c7 ,the applicant has adequate financial resources1 managerial or technical expertise1 and a governance system tailored to the business model and risk profile of the covered provider4 7,d7 ,the applicant is able to comply with the requirements of the ,bank ,secrecy ,act 7as defined in section #b of the ,,genius ,act 7#ab ,u4,s4,c4 #eija774 7,e7 ,the applicant demonstrates benefit to the public1 including with respect to innovation1 competition1 and enabling widespread access and use of payment services4 7,f7 ,the applicant is not a designated financial market utility 7as defined in section #hjc7d7 of the ,payment1 ,clearing1 and ,settlement ,supervision ,act of #bjaj 7#ab ,u4,s4,c4 #edfb7d7774 7#d7 ,holders of money transmitter licenses ,a covered provider described in section #b7c77;,a7 that becomes a registered covered provider under this ,act may provide payment services in any ,state4 7b7 ,timing for decision2 grounds for denial 7#a7 ,initial applications ,with respect to an application under subsection 7a7 received during the #ahj-;day period beginning on the date of the enactment of this ,act1 the ,comptroller shall notify each applicant1 not later than #ahj days after the receipt of such application-- 7,a7 that the application is complete2 or 7,b7 that the application is incomplete and the specific information required for the application to be considered complete4 7#b7 ,extension ,the ,comptroller may extend the period described in paragraph 7#a7 by an additional #fj days4 7#c7 ,subsequent applications ,with respect to an application received after the end of the period described in paragraph 7#a7 7including any extension made under paragraph 7#b771 the ,comptroller shall provide the notification required under such paragraph to each applicant not later than #cj days after receiving such application4 7#d7 ,decision ,not later than #ahj days after notifying the applicant that an application is complete1 the ,comptroller shall notify the applicant of whether the ,comptroller approved or denied such application4 ,if the ,comptroller fails to submit a notification with such #ahj-;day period1 such application shall be deemed to be approved4 7#e7 ,denial 7,a7 ,grounds for denial ,the ,comptroller may deny a complete application received under subsection 7a7 only if the ,comptroller determines the factors described in subsection 7a77#c7 are not satisfied4 7,b7 ,explanation required ,the ,comptroller shall provide each applicant of a complete application that was denied a written notice explaining such denial1 including all findings made by the ,comptroller with respect to the factors described in subsection 7a77#c74 7c7 ,revocation ,the ,comptroller shall establish1 by rule1 a process by which the ,comptroller may review and revoke a registration granted under this section to a covered provider if the ,comptroller determines the factors described in subsection 7a77#c7 are not satisfied4 ,such process shall include a process for providing notice to the covered provider and a process for review of the decision to revoke a registration4 #d4 ,customer protection standards 7a7 ,reserve standards 7#a7 ,in general ,a registered covered provider shall maintain identifiable reserves backing outstanding payment obligations on at least a #a to #a basis1 with reserves comprising-- 7,a7 ,united ,states coins and currency 7including ,federal ,reserve notes7 or money standing to the credit of an account with a ,federal ,reserve ,bank2 7,b7 funds held as demand deposits 7or other deposits that may be withdrawn upon request at any time7 or insured shares at an insured depository institution 7including any foreign branches or agents1 including correspondent banks1 of an insured depository institution71 subject to limitations established by the ,corporation and the ,national ,credit ,union ,administration1 as applicable1 to address safety and soundness risks of such insured depository institution2 7,c7 funds in transit to the registered covered provider that are owed by an insured depository institution or another registered covered provider1 including funds from the automated clearinghouse system or funds receivable from a payment instrument2 7,d7 ,treasury bills1 notes1 or bonds-- 7i7 with a remaining maturity of #ic days or less2 or 7ii7 issued with a maturity of #ic days or less2 7,e7 money received under repurchase agreements1 with the registered covered provider acting as a seller of securities and with an overnight maturity1 that are backed by ,treasury bills with a maturity of #ic days or less2 7,f7 reverse repurchase agreements1 with the registered covered provider acting as a purchaser of securities and with an overnight maturity1 that are collateralized by ,treasury notes1 bills1 or bonds on an overnight basis1 subject to overcollateralization in line with standard market terms1 that are-- 7i7 tri-party2 7ii7 centrally cleared through a clearing agency registered with the ,securities and ,exchange ,commission2 or 7iii7 bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress2 7,g7 securities issued by an investment company registered under section #h7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#h7;a771 or other registered ,government money market fund1 and that are invested solely in underlying assets described in subparagraphs 7,a7 through 7,f72 7,h7 any other similarly liquid ,federal ,government-issued asset approved by the ,comptroller2 or 7,i7 any reserve described in subparagraphs 7,a7 through 7,d7 or subparagraphs 7,g7 through 7,h7 in tokenized form1 provided that such reserves comply with all applicable laws and regulations4 7#b7 ,prohibition on rehypothecation ,reserves described under paragraph 7#a7 may not be pledged1 rehypothecated1 or reused1 except for the purposes described in section #d7;a77#b7 of the ,,genius ,act 7#ab ,u4,s4,c4 #eijc7;a77#b774 7#c7 ,segregation requirement for access or custody services ,a registered covered provider providing access or custody services for monetary value shall segregate and separately account for such monetary value and may not commingle such monetary value with the assets of such provider4 7b7 ,recordkeeping standards 7#a7 ,in general ,a registered covered provider shall maintain records of-- 7,a7 outstanding payment obligations of the provider with respect to each customer of the provider2 and 7,b7 reserves held pursuant to subsection 7a74 7#b7 ,access or custody services ,a registered covered provider that provides access or custody services for monetary value shall maintain beneficial ownership records with respect to each applicable account and customer4 #e4 ,risk management standards and fair access 7a7 ,in general ,the ,comptroller shall ensure that a registered covered provider shall be subject to the capital1 liquidity1 and risk management regulations issued pursuant to section #d7;a77#d7 of the ,,genius ,act 7#ab ,u4,s4,c4 #eijc7;a77#d77 in a similar manner that such regulations apply to a permitted payment stablecoin issuer 7as defined in section #b of such ,act 7#ab ,u4,s4,c4 #eija771 where such regulations are tailored to the business model and risk profile of the registered covered provider4 7b7 ,fair access obligation ,a registered covered provider-- 7#a7 shall be subject to the requirements of the ,equal ,credit ,opportunity ,act 7#ae ,u4,s4,c4 #afia et seq47 in the same manner as a creditor under such ,act2 7#b7 may not deny access to payment services to an individual because of the individual's constitutionally or statutorily protected beliefs1 affiliations1 or political views2 7#c7 may not cancel a payment services account of an individual as a tool to inhibit such beliefs1 affiliations1 or political views2 and 7#d7 shall make all business decisions with respect to the provision of payment services on the basis of individualized1 objective1 and risk-based analyses4 #f4 ,examinations1 contracted services1 and enforcement 7a7 ,in general ,the ,comptroller may make examinations of a registered covered provider with respect to the following3 7#a7 ,the nature of the operations and financial condition of the registered covered provider4 7#b7 ,the financial1 operational1 and other risks that may pose a threat to-- 7,a7 the safety and soundness of the registered covered provider2 or 7,b7 the stability of the financial system of the ,united ,states4 7#c7 ,the systems of the registered covered provider for monitoring and controlling the risks described in paragraph 7#b74 7#d7 ,the compliance of the registered covered provider with the requirements of ,federal consumer financial law 7as defined in section #ajjb of ,consumer ,financial ,protection ,act of #bjaj 7#ab ,u4,s4,c4 #edha771 including by-- 7,a7 obtaining information about the activities and compliance systems or procedures of such provider2 and 7,b7 detecting and assessing risks to consumers and to markets for consumer financial products and services 7as defined in such section #ajjb74 7b7 ,contracted services 7#a7 ,in general ,whenever a registered covered provider relies on or contracts for any services or activities that are directly related to and are critical to the provision of payment services by the registered covered provider-- 7,a7 the person that performs such services or activities shall be subject to regulation and supervision by the ,comptroller to the same extent as if such services were being performed by the registered covered provider2 and 7,b7 the registered covered provider shall notify the ,comptroller of any relationship between the provider and the person that performs such services or activities not later than #cj days after the date which is the earlier of the date on which-- 7i7 such provider and such person enter into a contract for provision of such services or activities2 or 7ii7 such person begins performance of such service or activity4 7c7 ,enforcement ,the ,comptroller may enforce the requirements of sections #d and #e of this ,act against a registered covered provider and take such actions against such provider as permitted under section #h of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah71 as if such provider was an insured depository institution4 #g4 ,reports 7a7 ,submission of reports ,at the frequency established by the ,comptroller1 a registered provider shall submit to the ,comptroller a report relating to-- 7#a7 the financial condition of the registered covered provider2 7#b7 compliance by the registered covered provider with the requirements of this ,act and other applicable laws relating to the provision of payment services2 and 7#c7 any other information the ,comptroller may reasonably require with respect to the registered covered provider and the scope of the provision of payment services of such provider4 7b7 ,existing reports ,to comply with the requirements of this section1 the ,comptroller shall1 to the maximum extent practicable1 use existing reports and other supervisory information and avoid duplication of examination activities1 reporting requirements1 and requests for information4 #h4 ,priority for customers of registered covered providers 7a7 ,nonbank provider defined ,in this section1 the term nonbank provider means a registered covered provider that is not an insured depository institution 7as defined in section #b of the ,,genius ,act 7#ab ,u4,s4,c4 #eija774 7b7 ,exclusion from bankruptcy ,a nonbank provider shall not be treated as a debtor for purposes of chapter #g or chapter #aa of title #aa1 ,united ,states ,code4 7c7 ,insolvency standards 7#a7 ,in general ,a nonbank provider shall be eligible to be subject to an insolvency proceeding administered by a covered ,state regulator4 7#b7 ,appointment ,notwithstanding any other provision of ,federal law or the law of any ,state1 the ,comptroller may be appointed by the covered ,state regulator to act as conservator or receiver for such a nonbank provider1 pursuant to such rules issued by the ,comptroller4 7#c7 ,backup authority ,if1 with respect to an insolvent nonbank provider1 a ,state does not promptly initiate an insolvency proceeding beginning on the date the nonbank provider becomes insolvent1 the ,comptroller shall initiate such insolvency proceeding4 ,for purposes of this paragraph1 the ,comptroller shall issue such rules as necessary to define promptly4 7d7 ,priority ,to the extent that a customer may hold balances with a nonbank provider1 amounts realized from the liquidation or other resolution of the nonbank provider by the covered ,state regulator or the ,comptroller 7whichever is acting as a conservator or receiver under this section7 shall be distributed to pay claims 7other than secured claims to the extent of any such security7 in the following order of priority3 7#a7 ,administrative expenses of the conservator or receiver4 7#b7 ,outstanding payment obligations to customers4 7#c7 ,any other general or senior liability of the nonbank provider4 7#d7 ,any obligation subordinated to liabilities described in paragraphs 7#b7 and 7#c7 not described in paragraph 7#e74 7#e7 ,any obligation to shareholders or members of the nonbank provider arising as a result of their status as shareholders or members4 7e7 ,custodial assets ,monetary value maintained in connection with access or custody services1 properly segregated from the nonbank provider's proprietary assets1 are not general assets of the nonbank provider subject to the priority set forth in subsection 7d74 ,any shortfall in custodial assets shall have the same priority as outstanding payment obligations to customers under subsection 7d77#b74 7f7 ,additional powers ,in addition to and not in derogation of the powers conferred and the duties imposed by this ,act on the ,comptroller or a ,state as conservator or receiver of a nonbank provider1 the ,comptroller or ,state1 as applicable1 shall have such additional powers and duties with respect to the nonbank provider as imposed on a conservator or receiver of an insured depository institution under any other provision of law4 #i4 ,access to payments reserve accounts 7a7 ,access ,to obtain access to a payments reserve account in the same manner and to the same extent as such access would be granted to an insured depository institution1 a registered covered provider may submit a request to the ,board of ,governors for such access4 7b7 ,approval ,the ,board of ,governors shall approve or deny such a request not later than #abj days after receipt of such request1 which period may be extended by an additional #fj days4 ,if the ,board of ,governors fails to act on such a request within such period1 the request shall be deemed to be approved4 7c7 ,enforcement authority in unusual and exigent circumstances 7#a7 ,in general ,in unusual and exigent circumstances1 the ,board of ,governors may issue a directive that has the effect of a cease and desist order against a registered covered provider that uses a payments reserve account for purposes of noncompliance with requirements of sections #d and #e of this ,act1 if the ,board of ,governors submits a written notice to the covered ,state regulator and the ,comptroller not less than #dh hours before issuing such directive4 7#b7 ,unusual and exigent circumstances defined ,not later than #ahj days after the date of the enactment of this ,act and in consultation with the ,conference of ,state ,bank ,supervisors1 the ,board of ,governors shall issue rules to define the term unusual and exigent circumstances for purposes of paragraph 7#a74 7#c7 ,review 7,a7 ,administrative review 7i7 ,in general ,after a directive described in paragraph 7#a7 has been issued with respect to a registered covered provider1 such registered covered provider may object and present to the ,board of ,governors1 in writing1 the reasons why the directive should be modified or rescinded4 7ii7 ,automatic lapse of directive ,if1 not later than #aj days after the receipt of a response described in clause 7i71 the ,board of ,governors does not affirm1 modify1 or rescind the directive1 the directive shall automatically lapse4 7,b7 ,judicial review 7i7 ,in general ,if the ,board of ,governors affirms or modifies a directive pursuant to subparagraph 7,a71 any affected party may immediately thereafter petition the ,united ,states district court for the district in which the main office of the affected party is located1 or in the ,united ,states ,district ,court for the ,district of ,columbia1 to stay1 modify1 terminate1 or set aside the directive4 7ii7 ,relief for extraordinary cause ,upon a showing of extraordinary cause1 an affected party may petition for relief under clause 7i7 without first pursuing or exhausting the administrative review under subparagraph 7,a74 #aj4 ,effect on securities laws 7a7 ,investment advisors act of #aidj ,section #bjb7;a77#ah7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#ah77 is amended by adding at the end the following3 ,the term security does not include a balance with a registered covered provider1 as such term is defined in section #b of the ,,pace ,act of #bjbf44 7b7 ,investment company act of #aidj ,section #b7;a77#cf7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a77#cf77 is amended by adding at the end the following3 ,the term security does not include a balance with a registered covered provider1 as such term is defined in section #b of the ,,pace ,act of #bjbf44 7c7 ,securities act of #aicc ,section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a77 is amended by adding at the end the following3 ,the term security does not include a balance with a registered covered provider1 as such term is defined in section #b of the ,,pace ,act of #bjbf44 7d7 ,securities exchange act of #aicd ,section #c7;a77#aj7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#aj77 is amended by adding at the end the following3 ,the term security does not include a balance with a registered covered provider1 as such term is defined in section #b of the ,,pace ,act of #bjbf44 7e7 ,securities investor protection act of #aigj ,section #af7ad7 of the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #ghlll7#ad77 is amended by adding at the end the following3 ,the term security does not include a balance with a registered covered provider1 as such term is defined in section #b of the ,,pace ,act of #bjbf44