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S.L.C.

116TH CONGRESS
2D SESSION

S. ll

To require member banks to maintain pass-through digital dollar wallets
for certain persons, and for other purposes.

IN THE SENATE OF THE UNITED STATES
llllllllllllllllllll introduced the following bill; which was read twice
and referred to the Committee on llllllllll

A BILLTo require member banks to maintain pass-through digitaldollar wallets for certain persons, and for other purposes.
1Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
34SECTION 1. SHORT TITLE.

This Act may be cited as the ø‘‘llllll Act

5 of llll’’.¿6SEC. 2. DEFINITIONS.

7In this Act:8(1) DIGITAL DOLLARS.—The term ‘‘digital dol-9lars’’ means dollar balances consisting of digital

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1ledger entries recorded as liabilities in the accounts

2of any Federal reserve bank.

3(2) DIGITALDOLLAR

WALLETS.—Theterm4‘‘digital dollar wallet’’ means a digital wallet or ac-

5count, maintained by a Federal reserve bank on be-6half of any person, for the purpose of holding digital

7dollar balances.

8(3) MEMBER BANK.—The term ‘‘member bank’’

9means any national bank, State bank, or bank or

10trust company which has become a member of one

11of the reserve banks created by the Federal Reserve

12Act (12 U.S.C. 221 et seq.).

13(4) PASS-THROUGH

DIGITALDOLLAR

WAL-

14LETS.—The

15

let’’ means a digital wallet or account, maintained

16

by a member bank on behalf of any person, entitling

17that person to a pro rata share of a pooled reserve18

balance that the member bank maintains at any

19

Federal reserve bank.

20(5) POSTAL

21‘‘postal retail facility’’—term ‘‘pass-through digital dollar wal-RETAILFACILITY.—Theterm

22(A) means post office, post office branch,

23

post office classified station, or other facility

24that is operated by the Postal Service, the pri-

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1

mary function of which is to provide retail post-2

al services; and3

(B) does not include a contractor-operated

4

facility offering postal services.

5(6) POSTAL SERVICE.—The term ‘‘Postal Serv-

6ice’’ means the United States Postal Service.

7SEC. 3. AUTHORITY AND MANDATE FOR MEMBER BANKS

8TO MAINTAIN PASS-THROUGH DIGITAL DOL-

9

LAR WALLETS.

10(a) OBLIGATIONS OF MEMBER BANKS.—

11(1) IN GENERAL.—Member banks shall open

12

and maintain pass-through digital dollar wallets for13

all persons, including persons eligible to receive pay-

14

ments from the United States pursuant to the15øllllll Act of llll¿, who elect to de-16

posit them into pass-through digital dollar wallets.

17(2) MAINTENANCE OF ASSETS.—

18(A) INGENERAL.—Eachmember bank19

shall establish and maintain a separate legal en-

20

tity for the exclusive purpose of holding all as-

21

sets and maintaining all liabilities associated22with pass-through digital wallets.

23(B) CONTENTS.—The assets of any entity

24

described in subparagraph (A) shall consist ex-

25

clusively of a balance maintained in a master

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account at a Federal reserve bank, and the li-2

abilities or obligations of the entity shall consist

3exclusively of an equal quantity of balances

4

maintained by holders of pass-through digital

5wallets.

6(C)7TION.—The

8entity described in subparagraph (A) shall not

9

be deemed assets or liabilities of the member

10bank or its affiliates for purposes of any capital

11or liquidity regulation promulgated by Federal

12or state banking authorities.

CAPITAL

ORLIQUIDITYREGULA-assets and liabilities of any legal

13(D) ONLINE APPLICATION REQUIREMENT

14FOR LARGE BANKS.—Member banks with total15consolidated

16$10,000,000,000 shall promptly offer applica-

17tion, through online or telephonic means, for18

pass-through digital wallets.

19

assetsinexcessof(b) TERMS OF PASS-THROUGH DIGITAL DOLLAR

20 WALLETS.—Pass-through digital dollar wallets—
21(1) shall not be subject to any account fees,

22

minimum balances, or maximum balances and shall23

pay interest at a rate not below the greater of the24rate of interest on required reserves and the rate of25

interest on excess reserves;

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51(2) shall provide functionality and service levels

2

no less favorable than those that the member bank3

offers for its existing transaction accounts, including

4

with respect to debit cards, automated teller ma-5chines, online account access, automatic bill-pay,

6

mobile banking, customer service and such other7

services as the Board of Governors of the Federal

8

Reserve System determines appropriate in the public

9interest, provided that digital dollar wallets shall not

10

include overdraft coverage;11(3) shall be prominently branded in all account12statements, marketing materials, and other commu-

13nications as ‘‘pass-through FedAccounts’’ main-

14

tained by the member bank on behalf of the Federal

15Reserve;1617(4) may not be closed or restricted by the bankon the basis of profitability considerations; and18(5) shall provide account holders with reason-

19

able protection against losses caused by fraud or se-20

curity breaches.

21(c) REIMBURSEMENT FOR COSTS.—

22(1) IN GENERAL.—Each postal retail facility

23and each member bank with total consolidated assets

24of not greater than $10,000,000,000 shall be reim-

25

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61eral reserve bank for the actual and reasonable oper-2

ational costs incurred by the postal retail facility or

3member bank in offering pass-through digital dollar

4wallets.

5(2) REGULATIONS.—The Board of Governors of

6

the Federal Reserve System shall promulgate such

7regulations as necessary to carry out this subsection.

8(d) AUTHORITY OF THE BOARD.—Member banks

9 shall be subject to such regulations and obligations as may
10 be imposed by the Board of Governors of the Federal Re11 serve System in connection with maintaining pass-through12 digital dollar wallets.
13SEC. 4. AUTHORITY FOR STATE NONMEMBER BANKS AND

14

CREDIT UNIONS TO OFFER PASS-THROUGH

15

DIGITAL DOLLAR WALLETS.

16

The Federal reserve banks shall permit state non-

17 member banks and credit unions to open master accounts
18 for the exclusive purpose of offering pass-through digital
19 dollar wallets in compliance with the separate entity struc20 ture described in section 3(a), if—21
22(1) the pass-through digital wallets comply withthe terms set forth in section 3(b); and23(2) each state nonmember bank or credit union

24electing to offer pass-through digital wallets shall be

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71entitled to cost reimbursement in accordance with2section 3(c).

3SEC. 5. AUTHORITY AND MANDATE FOR FEDERAL RESERVE

4BANKS TO MAINTAIN DIGITAL DOLLAR WAL-5LETS FOR THE GENERAL PUBLIC.

6(a) AUTHORIZATION.—Subject to such restrictions,

7 limitations, and regulations as may be imposed by the8 Board of Governors of the Federal Reserve System, each9 Federal Reserve bank may maintain digital dollar wallets.
10(b) MANDATE.—

11(1) IN GENERAL.—All Federal reserve banks

12

shall, not later than January 1, 2021, make digital

13

wallets available to all residents and citizens of the14

United States and to businesses domiciled in the15

United States.

16(2) LIMITED BRANCHES.—In areas where ac-17

cess to physical member bank branches is limited,18

including in low- or moderate-income geographies,

19

designated disaster areas, distressed or underserved

20

non-metropolitan middle-income geographies, as des-21

ignated by the Federal Financial Institutions Exam-22ination Council, Federal reserve banks shall partner

23with postal retail facilities to ensure access and24

availability to application and account services for all

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1residents and citizens of the United States and to2businesses domiciled in the United States.

3(c) TERMS OF DIGITAL DOLLAR WALLETS.—Digital

4 dollar wallets—
5(1) shall not be subject to any account fees,

6

minimum balances, or maximum balances, and shall

7pay interest at a rate not below the greater of the8rate of interest on required reserves and the rate of

9interest on excess reserves;

10(2) shall provide debit cards, online account ac-

11

cess, automatic bill-pay, mobile banking, customer

12

service and other such services as the Board of Gov-

13

ernors of the Federal Reserve System determines ap-

14

propriate in the public interest, provided that digital

15

dollar wallets shall not include overdraft coverage;

16(3) shall provide, in conjunction with the Postal

17Service, access to automatic teller machines to be18

maintained on behalf of the Board of Governors of

19

the Postal Service at postal retail facilities;

20(4) shall be branded in all account statements,

21

marketing materials, and other communications as22‘‘FedAccounts’’ maintained by the Federal reserve23

bank on behalf of the United States of America;

2425(5) may not be closed or restricted on the basisof profitability considerations; andZ5F SN GZR

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91(6) shall provide account holders with reason-

2

able protection against losses caused by fraud or se-

3curity breaches.

4(d) BANK SECRECY ACT.—In establishing and main-

5 taining digital dollar wallets, each Federal Reserve Bank
6 shall comply with—
7891011(1) section 21 of the Federal Deposit Insurance
Act (12 U.S.C. 1829b);(2) chapter 2 of title I of Public Law 91–508(12 U.S.C. 1951 et seq.); and(3) subchapter II of chapter 53 of title 31,

12United States Code.

13(e) PRIVACY.—Section 552a of title 5, United States

14 Code (commonly known as the ‘‘Privacy Act of 1974’’),15 shall apply to digital dollar wallets, and the privacy obliga16 tions applicable to each Federal reserve bank and its em17 ployees, including with respect to criminal and civil pen18 alties, shall mirror those applicable to Federal tax returns
19 under sections 6103, 7213(a)(1), 7213A, and 7431 of the20 Internal Revenue Code of 1986.
2122SEC. 6. REGULATIONS.

The Board of Governors of the Federal Reserve Sys-

23 tem shall promulgate regulations carrying out this Act.

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