I 

118TH CONGRESS 

2D SESSION H. R. 7437 

To require certain supervisory agencies to assess their technological 

vulnerabilities, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 23, 2024 

Mrs. HOUCHIN (for herself, Mr. FOSTER, and Mr. HILL) introduced the 

following bill; which was referred to the Committee on Financial Services 

A BILL 

To require certain supervisory agencies to assess their 

technological vulnerabilities, 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. 

4 This Act may be cited as the ‘‘Fostering the Use of 

5 Technology to Uphold Regulatory Effectiveness in Super6 vision Act’’. 

7 SEC. 2. FINDINGS. 

8 Congress finds the following: 


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1 (1) Banking regulators continue to examine and 

2 monitor depository institutions without access to 

3 real-time information. 

4 (2) Bureaucracy and risk surrounding tech5 nology procurement presents a difficult challenge for 

6 updating supervisory technology. 

7 (3) To ensure that prudential supervision is ef8 fective and sustainable in the digital age, agencies 

9 must leverage new technologies to allow for the fi10 nancial monitoring necessary to preserve a safe and 

11 sound banking system. 

12 (4) New technology tools are also necessary in 

13 order for agencies to effectively fulfill mandates 

14 other than prudential supervision, including their 

15 mandates to assure consumer protection and mon16 itor Bank Secrecy Act compliance. 

17 (5) Agencies’ reliance on outdated technology 

18 creates vulnerabilities for the financial system, caus19 ing— 

20 (A) difficulties in collecting, compiling, and 

21 analyzing relevant information about risks and 

22 noncompliance at supervised firms; 

23 (B) reliance on information that is inac24 curate, incomplete, or not timely; reliance on 

25 limited and outdated tools for data analysis; 


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1 (C) difficulties in using data to identify 

2 risk trends; 

3 (D) difficulty in producing accurate and 

4 timely reports; 

5 (E) inadequacy of cybersecurity safe6 guards; and 

7 (F) failure to detect illegal activities. 

8 (6) The rapid expansion of financial firms’ use 

9 of artificial intelligence is generating opportunities 

10 to improve the financial system, making it essential 

11 that agencies be equipped with the technology and 

12 skills needed to analyze these opportunities and po13 tential risks. 

14 (7) While agencies assess their supervisory ca15 pabilities on an ongoing basis, it is imperative that 

16 there be a unified goal to enhancing supervisory 

17 technologies that ensures effective and sustainable 

18 oversight in the digital age. 

19 SEC. 3. TECHNOLOGICAL VULNERABILITIES AND PRO20 CUREMENT PRACTICES ASSESSMENT. 

21 (a) IN GENERAL.— 

22 (1) TECHNOLOGICAL VULNERABILITIES ASSESS23 MENT.—Each covered agency shall, not later than 

24 180 days after the date of the enactment of this sec25 tion, assess how its existing technological systems 


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1 prevent an agency from conducting real-time super2 visory assessments over entities which the covered 

3 agency has supervisory authority, including the ef4 fects stemming from the agency’s— 

5 (A) core information technology infrastruc6 ture; 

7 (B) technology used to supervise entities, 

8 including supervisory technology tools; and 

9 (C) technology for monitoring general mar10 ket risks using reported data and external data. 

11 (2) PROCUREMENT PRACTICES ASSESSMENT.— 

12 Each covered agency shall, not later than 180 days 

13 after the date of the enactment of this section, as14 sess the procurement rules and protocols adhered to 

15 by such covered agency when such covered agency 

16 acquires or develops new technological systems and 

17 identify any challenges created by such procurement 

18 rules and protocols, including the impact such rules 

19 or protocols have on the ability of the covered agen20 cy to test new technological systems. 

21 (b) REPORT.—Not later than 180 days after the com22 pletion of the assessments set forth in this section, and 

23 every 5 years thereafter, the covered agencies shall coordi24 nate and submit to the Committee on Financial Services 

25 of the House of Representatives and the Committee on 


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1 Banking, Housing, and Urban Affairs of the Senate a re2 port that includes the following with respect to each cov3 ered agency— 

4 (1) a general overview of hardware and soft5 ware used for informational gathering during super6 vision activities, including products purchased from 

7 technology vendors and products developed by the 

8 covered agency or contractors; 

9 (2) a description of the procurement practices 

10 and protocols of the covered agency, including a de11 scription of— 

12 (A) whether such processes are voluntarily 

13 adhered to or mandated; and 

14 (B) any challenges resulting from such 

15 practices and protocols that have hindered the 

16 ability of the covered agency to obtain new 

17 technology; 

18 (3) a general overview of the agency’s workforce 

19 engaged primarily in technology development within 

20 the covered agency, including— 

21 (A) an overview of the ability of the cov22 ered agency to recruit and retain appropriate 

23 technology experts; and 

24 (B) a description of the degree to which 

25 the covered agency relies on outside contractors 


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1 to design technology and perform technology-re2 lated tasks; 

3 (4) a description of the processes used by the 

4 covered agency to obtain information from entities 

5 supervised by the covered agency and general infor6 mation about market trends and risks; 

7 (5) a description of the ways in which the cov8 ered agency shares information with other covered 

9 agencies; 

10 (6) an evaluation of the level of ease or dif11 ficulty experienced by the covered agency when— 

12 (A) sharing data with other government 

13 agencies; and 

14 (B) collecting data from entities supervised 

15 by the covered agency; and 

16 (7) a description of any plans the covered agen17 cy has with respect to how the covered agency will 

18 implement future upgrades to the technology used 

19 by the covered agency to supervise entities super20 vised by the covered agency, including— 

21 (A) a general description of any planned 

22 upgrades; 

23 (B) the anticipated timeline of any planned 

24 upgrades; 

25 (C) the costs of any planned upgrades; 


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1 (D) any concerns about access to needed 

2 resources; 

3 (E) intended efforts for hiring and training 

4 individuals as part of any technological up5 grades; 

6 (F) any aspects of any plan that should be 

7 addressed on an interagency basis; and 

8 (G) any anticipated challenges and solu9 tions associated with entities supervised by the 

10 agency adapting to new reporting requirements, 

11 including the needs and plans for supervised en12 tities adaptation to new reporting requirements, 

13 including estimates of transition costs and po14 tential cost reductions over time. 

15 (c) COVERED AGENCY DEFINED.—The term ‘‘cov16 ered agency’’ means the Federal Reserve System, Federal 

17 Deposit Insurance Corporation, Office of the Comptroller 

18 of the Currency, Consumer Financial Protection Bureau 

19 and the National Credit Union Administration. 

Æ 


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