I 

116TH CONGRESS 

1ST SESSION H. R. 4767 

To promote innovation in financial services, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 21, 2019 

Mr. MCHENRY introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To promote innovation in financial services, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Financial Services Innovation Act of 2019’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Agency identification of regulatory areas. 

Sec. 4. Establishment of FSIO at agencies. 

Sec. 5. FSIO Liaison Committee and chair. 


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Sec. 6. Petition to agency. 

Sec. 7. Agency determination of petition. 

Sec. 8. Enforceable compliance agreement. 

Sec. 9. Report to Congress. 

Sec. 10. Funding. 

1 SEC. 2. DEFINITIONS. 

2 In this Act, the following definitions shall apply: 

3 (1) AGENCY REGULATION.—The term ‘‘agency 

4 regulation’’ means— 

5 (A) a rule (as defined in section 551 of 

6 title 5, United States Code) issued by an agen7 cy; 

8 (B) guidance issued by an agency; or 

9 (C) a published proposed or interim rule, 

10 policy statement, directive, adjudication, or in11 terpretation of an agency. 

12 (2) AGENCY.—The term ‘‘agency’’ means each 

13 of the Board of Governors of the Federal Reserve 

14 System, the Bureau of Consumer Financial Protec15 tion, the Commodity Futures Trading Commission, 

16 the Department of the Treasury, the Federal De17 posit Insurance Corporation, the Federal Housing 

18 Finance Agency, the Federal Trade Commission, the 

19 National Credit Union Administration Board, the 

20 Office of the Comptroller of the Currency, and the 

21 Securities and Exchange Commission. 

22 (3) COVERED PERSON.—The term ‘‘covered 

23 person’’ means a person that offers or intends to 


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1 offer a financial innovation by submitting a petition 

2 to a Financial Services Innovation Office at one or 

3 more agencies. 

4 (4) ENFORCEABLE COMPLIANCE AGREE5 MENT.—The term ‘‘enforceable compliance agree6 ment’’ means a contractual agreement described 

7 under section 8. 

8 (5) FINANCIAL INNOVATION.—The term ‘‘finan9 cial innovation’’ means an innovative financial serv10 ice or product, the delivery of which is enabled by 

11 technology, that is or may be subject to an agency 

12 regulation or Federal statute. 

13 (6) FINANCIAL SERVICES INNOVATION OFFICE

14 OR FSIO.—The term ‘‘Financial Services Innovative 

15 Office’’ or ‘‘FSIO’’ means an office established in an 

16 agency pursuant to section 5. 

17 SEC. 3. AGENCY IDENTIFICATION OF REGULATORY AREAS. 

18 Not later than 60 days after the date of the enact19 ment of this Act, and biannually thereafter, each agency 

20 shall publish in the Federal Register a nonexclusive list 

21 that identifies 3 or more areas of existing regulation— 

22 (1) that apply or may apply to a financial inno23 vation; and 


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1 (2) that the agency would consider modifying or 

2 waiving if the agency were to receive a petition 

3 under section 6 relating to that regulation. 

4 SEC. 4. ESTABLISHMENT OF FSIO AT AGENCIES. 

5 (a) IN GENERAL.—Each agency shall establish a Fi6 nancial Services Innovation Office (known as ‘‘FSIO’’) to 

7 promote financial innovations and to assist a covered per8 son whose petition has been approved under section 7. 

9 (b) DIRECTOR.—Each agency shall appoint an indi10 vidual to serve as the Director of the agency’s FSIO. 

11 (c) DUTIES.— 

12 (1) GENERAL DUTIES.—Each agency, acting 

13 through the agency’s FSIO, shall— 

14 (A) support the development of financial 

15 innovations; 

16 (B) coordinate with FSIOs at other agen17 cies to share information and data; and 

18 (C) establish procedures to reduce the time 

19 and cost of offering a financial innovation to 

20 the public and enable greater access to financial 

21 innovations. 

22 (2) DUTIES FOR PETITIONS.—With respect to a 

23 covered person whose petition has been approved 

24 under section 7, each FSIO shall— 


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1 (A) work with the covered person to ad2 dress issues of how existing regulatory frame3 works apply to the financial innovation that is 

4 the subject of the petition; 

5 (B) assist the covered person in complying 

6 with the requirements of Federal regulators of 

7 the financial innovation; and 

8 (C) assist the covered person in responding 

9 to any challenges to a modification or a waiver 

10 granted under subsection (d). 

11 (d) WAIVER AUTHORITY.—With respect to a covered 

12 person whose petition has been approved under section 7, 

13 if an agency has a rational basis for doing so and if the 

14 agency determines that a provision of a Federal statute 

15 under which the agency has rulemaking authority or an 

16 agency regulation is unduly burdensome to the covered 

17 person, the agency shall, acting through the agency’s 

18 FSIO, modify or waive the application of the Federal stat19 ute or the agency regulation. 

20 (e) TERMINATION OF OTHER PROGRAMS; TRANSFER

21 OF AUTHORITY.—Not later than 90 days after the estab22 lishment of a FSIO at an agency, the agency shall modify 

23 any offices or programs at the agency that promote finan24 cial innovations or assist covered persons in developing fi25 nancial innovations to operate within the FSIO. Any legal 


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1 action or proceeding commenced by or against such office 

2 or program of the agency, including no-action letters and 

3 staff advisory opinions, shall be transferred to the FSIO 

4 of that agency. 

5 (f) REPORT.—Not later than 6 months after the date 

6 of the enactment of this Act, and annually thereafter, each 

7 agency shall submit a report to Congress and to the Fi8 nancial Stability Oversight Council, and shall present tes9 timony to Congress, on the activities of the FSIO, includ10 ing a description of the petitions considered, the rationale 

11 for acceptance or rejection of petitions, and the efforts of 

12 the FSIO to encourage financial innovations. 

13 (g) SUNSET.—If an agency has not received a peti14 tion described in section 6 within 5 years of the date of 

15 the establishment of the agency’s FSIO, the agency shall 

16 eliminate the FSIO, while continuing to honor any en17 forceable compliance agreement of another agency. 

18 SEC. 5. FSIO LIAISON COMMITTEE AND CHAIR. 

19 (a) ESTABLISHMENT.—Not later than 60 days after 

20 the date of the enactment of this Act, the agencies shall 

21 establish a committee to be known as the ‘‘FSIO Liaison 

22 Committee’’. 

23 (b) MEMBERS.—The FSIO Liaison Committee shall 

24 be composed of the Director of each FSIO office and a 


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1 State banking supervisor selected by the Conference of 

2 State Bank Supervisors (or a successor organization). 

3 (c) DUTIES.—The FSIO Liaison Committee shall— 

4 (1) consult on the administration, coordination, 

5 and oversight of each agency’s FSIO; 

6 (2) facilitate the cooperation of each FSIO to 

7 ensure that agencies share information and data on 

8 petitions submitted under section 6; 

9 (3) monitor regulatory proposals and develop10 ments related to financial innovations; 

11 (4) encourage the application of uniform prin12 ciples and standards at each FSIO; and 

13 (5) hold public field hearings 4 times a year to 

14 informally provide— 

15 (A) information and advice to the public 

16 and covered persons; and 

17 (B) a forum to gather information from 

18 the public and covered persons. 

19 (d) MEETINGS.—The FSIO Liaison Committee shall 

20 meet at least twice a year. 

21 (e) CHAIR.— 

22 (1) ESTABLISHMENT.—The first Chair of the 

23 FSIO Liaison Committee shall be elected by the 

24 members. The Chair shall serve for a term of 2 


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1 years and thereafter the chairmanship shall rotate 

2 among the members of the committee. 

3 (2) POWERS OF THE CHAIR.—The Chair is au4 thorized to carry out the internal administration of 

5 the FSIO Liaison Committee, including the appoint6 ment and supervision of employees and the distribu7 tion of tasks among members, employees, and ad8 ministrative units. 

9 (f) TESTIMONY.—Not later than 6 months after the 

10 date of the enactment of this Act, the Chair of the FSIO 

11 Liaison Committee shall present testimony to Congress on 

12 the activities of the FSIO Liaison Committee. 

13 (g) FUNDING.— 

14 (1) COMPENSATION OF MEMBERS.—Each mem15 ber of the FSIO Liaison Committee shall serve with16 out additional compensation but shall be entitled to 

17 reasonable expenses incurred in carrying out official 

18 duties as such a member. 

19 (2) GENERAL EXPENSES.—The costs and ex20 penses of the FSIO Liaison Committee, including 

21 the salaries of employees, shall be split equally be22 tween, and paid by, each agency other than an agen23 cy that has eliminated the agency’s FSIO pursuant 

24 to section 4(g). 


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1 SEC. 6. PETITION TO AGENCY. 

2 (a) IN GENERAL.—A covered person may submit a 

3 petition to an agency, through the agency’s FSIO, in such 

4 form and in such manner as the agency’s FSIO may re5 quire, to request to enter into an enforceable compliance 

6 agreement containing a modification or waiver of an agen7 cy regulation or Federal statutory requirement under 

8 which the agency has supervisory or rulemaking authority 

9 with respect to the covered person or a financial innova10 tion the covered person offers or intends to offer. 

11 (b) CONTENTS.—In a petition submitted under this 

12 section, the covered person shall— 

13 (1) submit an alternative compliance strategy 

14 that proposes a method to comply with the agency 

15 regulation or Federal statutory requirement; and 

16 (2) demonstrate that under the alternative com17 pliance strategy, the financial innovation— 

18 (A) would serve the public interest; 

19 (B) improves access to financial products 

20 or services; and 

21 (C) does not present systemic risk to the 

22 United States financial system and promotes 

23 consumer protection. 

24 (c) MULTIPARTY PETITIONS.—One or more covered 

25 persons that offer or intend to offer similar financial inno26 vations may jointly submit a petition under this section. 


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1 (d) SAFE HARBOR.— 

2 (1) IN GENERAL.—During the period after a 

3 covered person submits a petition under this section 

4 and before the agency receiving the petition makes 

5 a determination on the petition pursuant to section 

6 7, an agency may not take an enforcement action 

7 against a covered person relating to the financial in8 novation that was the subject of the petition. 

9 (2) INJUNCTIVE RELIEF.—If an agency deter10 mines that a financial innovation described under 

11 paragraph (1) presents an immediate danger to con12 sumers or presents systemic risk to the United 

13 States financial system, the agency may apply to a 

14 court of competent jurisdiction for injunction to pro15 hibit a covered person from offering such financial 

16 innovation during the period described in paragraph 

17 (1). 

18 (e) NOTICE AND COMMENT.— 

19 (1) IN GENERAL.—Not later than 30 days after 

20 receiving a petition, the agency that receives the pe21 tition shall publish the petition in the Federal Reg22 ister and provide a 60-day period for public notice 

23 and comment. 

24 (2) EXCEPTION FOR NOTICE AND COMMENT PE25 RIOD.—The agency that receives the petition may 


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1 waive the notice and comment period described in 

2 paragraph (1) if such agency determines that the 

3 covered person submitting the petition is similarly 

4 situated to another covered person that has been 

5 granted approval of a petition pursuant to section 7. 

6 (3) CONFIDENTIALITY.—The agency shall 

7 maintain the confidentiality of any nonpublicly avail8 able data or information in any petition submitted 

9 under this section. The agency shall give reasonable 

10 consideration to maintaining the confidentiality of 

11 data or information identified by the covered person 

12 in the petition submitting under this section as non13 publicly available data or information. 

14 SEC. 7. AGENCY DETERMINATION OF PETITION. 

15 (a) IN GENERAL.—Not later than 30 days after the 

16 end of the comment period described under section 6, or 

17 if the comment period was waived, not later than 60 days 

18 after receipt of a petition under section 6, the head of the 

19 agency receiving the petition shall complete a review of 

20 the petition and notify the covered person, in writing, of 

21 the agency’s determination of the petition. 

22 (b) APPROVAL.—If the covered person submitting the 

23 petition shows that it is more likely than not that the cov24 ered person meets the requirements for establishing an al25 ternative compliance strategy, the agency shall— 


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1 (1) approve the petition; and 

2 (2) enter into an enforceable compliance agree3 ment with the covered person in accordance with the 

4 requirements of section 8. 

5 (c) DISAPPROVAL.— 

6 (1) EXPLANATION.—If the agency rejects a pe7 tition, the agency head shall provide the covered per8 son with a written notice explaining the reason for 

9 rejecting the petition, including— 

10 (A) evidence that the covered person did 

11 not satisfy the requirements for establishing an 

12 alternative compliance strategy; 

13 (B) an identification of the rules or regula14 tions of the agency applicable to the covered 

15 person with respect to the financial innovation; 

16 and 

17 (C) a description of— 

18 (i) any beneficial effects, including an 

19 identification of persons likely to benefit, 

20 from rejecting the petition; 

21 (ii) any potential costs, including an 

22 identification of persons likely to bear the 

23 costs, of rejecting the petition; and 


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1 (iii) the baseline used by the agency to 

2 measure the likely economic consequences 

3 of rejecting the petition. 

4 (2) RESUBMITTAL.—Not later than 90 days 

5 after receiving a notice of disapproval, a covered per6 son may revise and resubmit a petition to the agency 

7 under section 6. 

8 (d) MORATORIUM.—If an agency disapproves a peti9 tion submitted in good faith under this section, the agency 

10 shall provide the covered person notice and a reasonable 

11 amount of time before the agency takes an enforcement 

12 action against the covered person relating to the financial 

13 innovation that was the subject of the petition. 

14 (e) JUDICIAL REVIEW.—A covered person may seek 

15 judicial review of an agency’s determination on a petition 

16 in accordance with subchapter II of chapter 5 of title 5, 

17 United States Code, and chapter 7 of title 5, United 

18 States Code (commonly known as the ‘‘Administrative 

19 Procedure Act’’). 

20 SEC. 8. ENFORCEABLE COMPLIANCE AGREEMENT. 

21 (a) IN GENERAL.—If an agency approves a petition 

22 under section 7, the covered person may enter into an en23 forceable compliance agreement with the agency, which 

24 shall include the terms under which the covered person 

25 may develop or offer the approved financial innovation to 


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1 the public and any requirements of the covered person and 

2 any agency with respect to the financial innovation. 

3 (b) REQUIREMENTS.—Each agency, by rule, shall es4 tablish requirements relating to enforceable compliance 

5 agreements that include— 

6 (1) procedures for modifying the terms of the 

7 agreement; 

8 (2) consequences for failure to comply with the 

9 terms of the agreement; 

10 (3) a compliance examination process that— 

11 (A) solicits feedback from other agencies 

12 on the agreement; and 

13 (B) occurs not less frequently than annu14 ally; 

15 (4) a termination date for the agreement that 

16 is at least 1 year after the date on which the agree17 ment is entered into; 

18 (5) procedures for extending the termination 

19 date; 

20 (6) procedures for judicial review of another 

21 agency’s or State’s challenge to the agreement in ac22 cordance with subchapter II of chapter 5 of title 5, 

23 United States Code, and chapter 7 of title 5, United 

24 States Code (commonly known as the ‘‘Administra25 tive Procedure Act’’); and 


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1 (7) procedures for maintaining the confiden2 tiality of any information disclosed to the agency in 

3 making the agreement. 

4 (c) MULTIPARTY AGREEMENTS.—With respect to a 

5 financial innovation that is the subject of an enforceable 

6 compliance agreement entered into under this section, an 

7 agency that did not enter into such enforceable compliance 

8 agreement may join as a party to the enforceable compli9 ance agreement entered into pursuant to this section. 

10 (d) LIMITATION ON ENFORCEMENT ACTIONS.— 

11 (1) IN GENERAL.—If a covered person and an 

12 agency enter into an enforceable compliance agree13 ment— 

14 (A) another agency may not commence an 

15 enforcement action against the covered person 

16 with respect to the financial innovation that is 

17 the subject of the enforceable compliance agree18 ment; and 

19 (B) a State may not commence an enforce20 ment action against the covered person with re21 spect to the financial innovation that is the sub22 ject of the enforceable compliance agreement, if 

23 the covered person provides the State with— 

24 (i) the enforcement compliance agree25 ment; and 


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1 (ii) a statement of policies and proce2 dures the covered person has in place to 

3 comply with State laws that are applicable 

4 to the financial innovation. 

5 (2) STATE EXCEPTION FOR CONSUMER

6 HARM.—Notwithstanding paragraph (1)(B), a State 

7 may commence an enforcement action against a cov8 ered person with respect to a financial innovation 

9 that is the subject of an enforceable compliance 

10 agreement if, in an action brought by the State in 

11 a court of competent jurisdiction, the court deter12 mines that the agency’s action was arbitrary and ca13 pricious and the financial innovation has substan14 tially harmed consumers within such State. 

15 (e) ARBITRATION.—A covered person may elect to ar16 bitrate any action initiated by another person relating to 

17 a financial innovation that is the subject of the enforceable 

18 compliance agreement. 

19 SEC. 9. REPORT TO CONGRESS. 

20 Not later than 1 year after the date of the enactment 

21 of this Act, and annually thereafter, the Financial Sta22 bility Oversight Council shall submit to Congress a report 

23 on the aggregate impact of enforceable compliance agree24 ments entered into under this Act, which shall include— 


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1 (1) the number and characteristics of the agree2 ments; 

3 (2) the most innovative and least burdensome 

4 tools that the agency’s FSIO has implemented for 

5 achieving regulatory ends; 

6 (3) strategies implemented to coordinate and 

7 facilitate interagency cooperation among agency 

8 FSIOs; 

9 (4) the existing Federal and State laws, regula10 tions, or practices (including guidance materials, ex11 aminations, and enforcement proceedings and settle12 ments) that the Financial Stability Oversight Coun13 cil identifies as the most burdensome to innovation 

14 in developing or providing financial products and 

15 services, that adversely affect competition in the fi16 nancial services industry, or that restrict improve17 ments for consumers of financial products or serv18 ices; and 

19 (5) an identification of the overlap or frag20 mentation of regulation of financial products or serv21 ices and recommendations for reducing, consoli22 dating, or eliminating such overlap or fragmentation. 

23 SEC. 10. FUNDING. 

24 The costs of carrying out the requirements of this 

25 Act (except as specified in section 5(g)) shall be split 


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1 equally between, and paid by, each agency for fiscal years 

2 2017 through 2021. 

Æ 


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