IB 

Union Calendar No. 654 

118TH CONGRESS 

2D SESSION H. R. 7440 

[Report No. 118–792] 

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

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 23, 2024 

Mr. MCHENRY introduced the following bill; which was referred to the 

Committee on Financial Services 

DECEMBER 4, 2024 

Additional sponsors: Mr. DONALDS and Mr. EMMER

DECEMBER 4, 2024 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on February 23, 2024] 


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A BILL 

To promote innovation in financial services, and for other 

purposes. 


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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 ‘‘Fi5 nancial Services Innovation Act of 2024’’. 

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 or designation of FSIO at agencies. 

Sec. 5. FSIO Liaison Committee and chair. 

Sec. 6. Petition to agency. 

Sec. 7. Agency determination of petition. 

Sec. 8. Enforceable compliance agreement. 

Sec. 9. Report to Congress. 

8 SEC. 2. DEFINITIONS. 

9 In this Act, the following definitions shall apply: 

10 (1) AGENCY.—The term ‘‘agency’’ means each of 

11 the Board of Governors of the Federal Reserve System, 

12 the Bureau of Consumer Financial Protection, the 

13 Department of Housing and Urban Development, the 

14 Department of the Treasury, the Federal Deposit In15 surance Corporation, the Federal Housing Finance 

16 Agency, the National Credit Union Administration, 

17 the Office of the Comptroller of the Currency, and the 

18 Securities and Exchange Commission. 

19 (2) AGENCY REGULATION.—The term ‘‘agency 

20 regulation’’ means— 


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1 (A) a rule (as defined in section 551 of title 

2 5, United States Code) issued by an agency; 

3 (B) guidance issued by an agency; or 

4 (C) a published, proposed, or interim rule, 

5 policy statement, directive, adjudication, or in6 terpretation of an agency. 

7 (3) BANK SECRECY ACT.—The term ‘‘Bank Se8 crecy Act’’ means— 

9 (A) section 21 of the Federal Deposit Insur10 ance Act (12 U.S.C. 1829b); 

11 (B) chapter 2 of title I of Public Law 91– 

12 508 (12 U.S.C. 1951 et seq.); and 

13 (C) subchapter II of chapter 53 of title 31, 

14 United States Code. 

15 (4) ENFORCEABLE COMPLIANCE AGREEMENT.— 

16 The term ‘‘enforceable compliance agreement’’ means 

17 an agreement described under section 8. 

18 (5) FINANCIAL INNOVATION.—The term ‘‘finan19 cial innovation’’ means a financial product or service 

20 (as defined in section 1002 of the Consumer Finan21 cial Protection Act of 2010 (12 U.S.C. 5481))— 

22 (A) the delivery of which is enabled by tech23 nology; and 

24 (B) that is or may be subject to an agency 

25 regulation or Federal statute. 


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1 (6) FSIO.—The term ‘‘FSIO’’ means a Finan2 cial Services Innovation Office established pursuant 

3 to section 4. 

4 (7) PERSON.—The term ‘‘person’’ means an in5 dividual, partnership, company, corporation, associa6 tion, trust, estate, cooperative organization, or other 

7 entity. 

8 SEC. 3. AGENCY IDENTIFICATION OF REGULATORY AREAS. 

9 Not later than 60 days after the date of the enactment 

10 of this Act, and biannually thereafter, each agency shall 

11 publish in the Federal Register a nonexclusive list that 

12 identifies 3 or more areas of existing agency regulation— 

13 (1) that apply or may apply to a financial inno14 vation; and 

15 (2) that the agency would consider modifying or 

16 waiving if the agency were to receive a petition under 

17 section 6 relating to that regulation. 

18 SEC. 4. ESTABLISHMENT OR DESIGNATION OF FSIO AT 

19 AGENCIES. 

20 (a) IN GENERAL.—Each agency shall establish or des21 ignate an office within the agency to be known as the ‘‘Fi22 nancial Services Innovation Office’’. Each such Financial 

23 Services Innovation Office shall promote financial innova24 tions and assist persons whose petitions are approved under 

25 section 7. 


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1 (b) ADMINISTRATION.—Each agency shall designate an 

2 individual to serve as the head of the agency’s FSIO. 

3 (c) DUTIES.— 

4 (1) GENERAL DUTIES.—The head of each agen5 cy’s FSIO shall— 

6 (A) support the development of financial in7 novations; 

8 (B) coordinate with FSIOs at other agencies 

9 to share information and data about financial 

10 innovations; 

11 (C) upon request, coordinate with relevant 

12 State regulatory entities to provide information 

13 to the public with respect to financial innova14 tions and agency regulations related to such fi15 nancial innovations; and 

16 (D) establish procedures to reduce the regu17 latory burden of offering a financial innovation 

18 to the public and enable greater access to finan19 cial innovations. 

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

21 person with an approved petition under section 7, the 

22 head of each agency’s FSIO shall— 

23 (A) work with the person to address issues 

24 of how existing regulatory frameworks of the 


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1 agency apply to the financial innovation that is 

2 the subject of the petition; 

3 (B) assist the person in complying with any 

4 requirements of the agency with respect to the fi5 nancial innovation; and 

6 (C) assist the person in responding to any 

7 challenges to a modification or a waiver granted 

8 under subsection (d). 

9 (d) WAIVER AUTHORITY.—The head of each agency, 

10 acting through the agency’s FSIO, may modify or waive 

11 the application of an agency regulation of the agency or 

12 a Federal statute under which the agency has rulemaking 

13 authority if— 

14 (1) a petition has been approved under section 

15 7; and 

16 (2) the agency determines that compliance with 

17 such agency regulation or Federal statute would im18 pede the ability of a person to offer the financial in19 novation that is the subject of the petition. 

20 (e) TERMINATION OF OTHER PROGRAMS; TRANSFER

21 OF AUTHORITY.— 

22 (1) IN GENERAL.—Not later than 90 days after 

23 the establishment or designation of a FSIO at an 

24 agency, the agency shall modify any offices or pro25 grams at the agency that promote financial innovaVerDate Sep 11 2014 02:36 Dec 05, 2024 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H7440.RH H7440

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1 tions or assist persons in offering financial innova2 tions, and merge or transfer the operations of such of3 fices or programs into the FSIO. 

4 (2) TRANSFER OF AUTHORITY.—On the date that 

5 is 90 days after the establishment or designation of a 

6 FSIO at an agency, the administration of any rule, 

7 policy, or prior agency determinations relating to 

8 promoting financial innovations or assisting persons 

9 in offering financial innovations, including no-action 

10 letters and staff advisory opinions, shall be trans11 ferred to the FSIO of that agency. 

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

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

14 agency shall present testimony to the Congress and submit 

15 a report to the Congress and to the Financial Stability 

16 Oversight Council on the activities of the FSIO of such 

17 agency, including a description of the petitions considered, 

18 the rationale for acceptance or rejection of petitions, and 

19 the efforts of the FSIO to encourage financial innovations. 

20 SEC. 5. FSIO LIAISON COMMITTEE AND CHAIR. 

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

22 the date of the enactment of this Act, the agencies shall es23 tablish a committee to be known as the ‘‘FSIO Liaison 

24 Committee’’. 


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1 (b) MEMBERS.—The FSIO Liaison Committee shall be 

2 composed of the head of each FSIO described under section 

3 4 and a State banking supervisor selected by the Conference 

4 of State Bank Supervisors (or a successor organization). 

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

6 (1) consult on the administration, coordination, 

7 and oversight with the FSIO of each agency; 

8 (2) facilitate the cooperation of each FSIO to en9 sure that agencies share information and data on pe10 titions submitted under section 6; 

11 (3) monitor proposals for agency regulation and 

12 developments related to financial innovations; 

13 (4) encourage the application of uniform prin14 ciples and standards at each FSIO; and 

15 (5) facilitate collaboration with relevant State 

16 regulatory entities to provide information to the pub17 lic with respect to financial innovations and agency 

18 regulations related to such financial innovations. 

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 mem24 bers. The Chair shall serve for a term of 2 years and 


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1 thereafter the chairmanship shall rotate among the 

2 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 admin8 istrative units. 

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

10 date of the enactment of this Act, and annually thereafter, 

11 the Chair of the FSIO Liaison Committee shall present tes12 timony to the Congress on the activities of the FSIO Liaison 

13 Committee. 

14 (g) FUNDING.— 

15 (1) COMPENSATION OF MEMBERS.—Each mem16 ber of the FSIO Liaison Committee shall serve with17 out additional compensation but shall be entitled to 

18 reasonable expenses incurred in carrying out official 

19 duties as such a member. 

20 (2) GENERAL EXPENSES.—The costs and ex21 penses of the FSIO Liaison Committee, including the 

22 salaries of employees, shall be split equally between, 

23 and paid by, each agency. 


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1 SEC. 6. PETITION TO AGENCY. 

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

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

4 in such manner as the agency’s FSIO may require, to re5 quest to enter into an enforceable compliance agreement 

6 containing a modification or waiver of an agency regula7 tion of the agency or the Federal statute under which the 

8 agency has rulemaking authority with respect to— 

9 (1) the person; or 

10 (2) a financial innovation the person offers or 

11 intends to offer. 

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

13 section, the person shall— 

14 (1) identify any requirement under which the 

15 agency has rulemaking authority or the agency regu16 lation of the agency for which the person is requesting 

17 a modification or waiver; 

18 (2) explain why such modification or waiver is 

19 essential to the operation of the person; 

20 (3) submit an alternative compliance strategy 

21 that proposes a method to comply with such require22 ment or agency regulation; 

23 (4) demonstrate that under the alternative com24 pliance strategy, the financial innovation— 

25 (A) would serve the public interest; 


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1 (B) improves consumer access to a financial 

2 product or service; 

3 (C) would not present a national security 

4 risk to the United States; 

5 (D) would meet the purposes of anti-money 

6 laundering and countering the financing of ter7 rorism obligations under the Bank Secrecy Act; 

8 (E) would not present systemic risk to the 

9 United States financial system; and 

10 (F) would promote consumer protection; 

11 (5) provide a detailed business plan; and 

12 (6) propose a date on which an enforceable com13 pliance agreement would terminate and explain why 

14 such termination date would be appropriate. 

15 (c) MULTIPARTY PETITIONS.—One or more persons 

16 that offer or intend to offer similar financial innovations 

17 may jointly submit a petition under this section. 

18 (d) NOTICE AND COMMENT.— 

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

20 receiving a petition, the agency that receives the peti21 tion shall publish the petition in the Federal Register 

22 and provide a 60-day period for public notice and 

23 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 per3 son submitting the petition is similarly situated to 

4 another person that has been granted approval of a 

5 petition pursuant to section 7. 

6 (3) CONFIDENTIALITY.—The agency shall main7 tain the confidentiality of any nonpublicly available 

8 data or information in any petition submitted under 

9 this section. The agency shall give reasonable consid10 eration to maintaining the confidentiality of data or 

11 information identified by the person in the petition 

12 submitted under this section. 

13 SEC. 7. AGENCY DETERMINATION OF PETITION. 

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

15 end of the comment period described under section 6 (or 

16 if the comment period was waived, not later than 90 days 

17 after receipt of a petition under section 6), the head of the 

18 agency receiving the petition shall complete a review of the 

19 petition and notify the person who submitted the petition, 

20 in writing, of the agency’s determination of the petition. 

21 (b) APPROVAL OF PETITION.— 

22 (1) IN GENERAL.—An agency shall approve a pe23 tition if the agency has determined that— 


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1 (A) the alternative compliance strategy pro2 posed by the person in the petition satisfies the 

3 requirements described in section 6(b)(4); and 

4 (B) the person who submitted the petition 

5 has, with respect to the financial innovation the 

6 person offers or intends to offer, sufficiently iden7 tified— 

8 (i) the regulations and Federal statutes 

9 of which the person is seeking waiver or 

10 modification; and 

11 (ii) other applicable regulations and 

12 Federal statutes with which the person in13 tends to comply. 

14 (2) NOTIFICATION TO STATE REGULATORY AGEN15 CIES.—If an agency approves a petition, the agency 

16 shall, with respect to each State regulatory agency 

17 with jurisdiction over the person who submitted the 

18 petition or the financial innovation about which the 

19 person submitted the petition— 

20 (A) notify such State regulatory agency that 

21 the agency has approved the petition; and 

22 (B) provide such State regulatory agency 

23 information about the terms of the enforceable 

24 compliance agreement entered into between the 

25 person and the agency. 


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1 (c) DISAPPROVAL OF PETITION.— 

2 (1) IN GENERAL.—An agency may disapprove a 

3 petition if the agency has determined that— 

4 (A) the alternative compliance strategy pro5 posed by the person in the petition does not sat6 isfy the requirements described in section 6(b)(4); 

7 or 

8 (B) the person who submitted the petition 

9 has not, with respect to the financial innovation 

10 the person offers or intends to offer, sufficiently 

11 identified— 

12 (i) the regulations and Federal statutes 

13 of which the person is seeking waiver or 

14 modification; and 

15 (ii) other applicable regulations and 

16 Federal statutes with which the person in17 tends to comply. 

18 (2) WRITTEN NOTICE REQUIRED.—If an agency 

19 disapproves a petition the agency shall provide the 

20 person who submitted the petition with a written no21 tice explaining the reason for such disapproval and 

22 such written notice shall include a description of— 

23 (A) any benefits of disapproving the peti24 tion, including an identification of persons likely 

25 to benefit from the disapproval of the petition; 


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1 (B) any costs, including potential costs, of 

2 disapproving the petition, including an identi3 fication of persons likely to bear the costs associ4 ated with the disapproval of the petition; and 

5 (C) the baseline used by the agency to deter6 mine the likely economic consequences of dis7 approving the petition. 

8 (d) RESUBMITTAL.—Receipt of a notice of disapproval 

9 of a petition under this subsection shall not preclude a per10 son from revising and resubmitting such petition to the 

11 agency under section 6. 

12 (e) JUDICIAL REVIEW.—A person may seek judicial re13 view of an agency’s determination on a petition in accord14 ance with subchapter II of chapter 5 of title 5, United 

15 States Code, and chapter 7 of such title (commonly known 

16 as the ‘‘Administrative Procedure Act’’). 

17 SEC. 8. ENFORCEABLE COMPLIANCE AGREEMENT. 

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

19 under section 7, the person who submitted such petition 

20 shall enter into an enforceable compliance agreement with 

21 such agency, which shall include— 

22 (1) the terms under which the approved financial 

23 innovation may be developed or offered to the public; 

24 and 


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1 (2) any requirements of the person and such 

2 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 on 

12 the agreement; and 

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

15 (4) a termination date for the agreement that is 

16 at least 1 year and not more than 3 years after the 

17 date on which the agreement is entered into; 

18 (5) procedures and standards for extending the 

19 termination date, including procedures and standards 

20 for evaluating the effectiveness of the agreement; and 

21 (6) procedures for maintaining the confiden22 tiality of any information disclosed to the agency 

23 during the process of drafting and entering into 

24 agreement. 


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1 (c) JOINING OF AGREEMENT BY ADDITIONAL AGEN2 CIES.—With respect to a financial innovation that is the 

3 subject of an enforceable compliance agreement entered into 

4 under this section, an agency that did not enter into such 

5 enforceable compliance agreement may join as a party to 

6 the enforceable compliance agreement entered into pursuant 

7 to this section. 

8 (d) ENFORCEMENT ACTIONS BY NON-PARTY AGEN9 CIES.—An agency that is not a party to an enforceable com10 pliance agreement entered into under this section— 

11 (1) may not attempt to enforce, against the per12 son who is party to the enforceable compliance agree13 ment, any regulation or Federal statute modified or 

14 waived by the enforceable compliance agreement; and 

15 (2) may continue to enforce, against the person 

16 who is party to the enforceable compliance agreement, 

17 any regulation or Federal law over which the agency 

18 has enforcement authority that has not been modified 

19 or waived by the enforceable compliance agreement. 

20 (e) ARBITRATION.—A person who is party to the en21 forceable compliance agreement may elect to arbitrate any 

22 action initiated by another person relating to a financial 

23 innovation that is the subject of the enforceable compliance 

24 agreement. 


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1 (f) RULE OF CONSTRUCTION.—Nothing in this Act 

2 shall be construed to limit the ability of an agency to en3 force the requirements of an enforceable compliance agree4 ment entered into under this Act. 

5 SEC. 9. REPORT TO CONGRESS. 

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

7 of this Act, and annually thereafter, the Financial Stability 

8 Oversight Council shall submit to the Congress a report on 

9 the aggregate impact of enforceable compliance agreements 

10 entered into under this Act, which shall include— 

11 (1) the number and characteristics of the agree12 ments; 

13 (2) the most innovative and least burdensome 

14 tools that the agencies’ FSIOs have implemented to 

15 allow a financial innovation that is the subject of an 

16 enforceable compliance agreement to be offered; 

17 (3) strategies implemented to coordinate and fa18 cilitate cooperation among FSIOs; 

19 (4) the existing Federal laws, regulations, or 

20 practices that the Financial Stability Oversight 

21 Council identifies as the most burdensome to innova22 tion that adversely affect competition in the financial 

23 services industry, or that restrict improvements for 

24 consumers of financial products or services; and 


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1 (5) an identification of the overlap or fragmenta2 tion of agency regulations of financial products or 

3 services and recommendations for reducing, consoli4 dating, or eliminating such overlap or fragmentation. 


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Union Calendar No. 654 

118TH CONGRESS 

2D SESSION H. R. 7440 

[Report No. 118–792] 

A BILL 

To promote innovation in financial services, and for 

other purposes. 

DECEMBER 4, 2024 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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