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Union Calendar No. 615 

118TH CONGRESS 

2D SESSION H. R. 7437 

[Report No. 118–728] 

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 

NOVEMBER 1, 2024 

Additional sponsor: Ms. PETTERSEN

NOVEMBER 1, 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 require certain supervisory agencies to assess their 

technological vulnerabilities, 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. 

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: 

9 (1) Banking regulators continue to examine and 

10 monitor depository institutions without access to real11 time information. 

12 (2) Risk surrounding technology procurement 

13 may present challenges for updating supervisory tech14 nology. 

15 (3) To ensure that prudential supervision is ef16 fective and sustainable in the digital age, agencies 

17 must leverage new technologies to allow for the finan18 cial monitoring necessary to preserve a safe and 

19 sound banking system. 

20 (4) New technological tools are also necessary in 

21 order for agencies to effectively fulfill mandates other 

22 than prudential supervision, including their man23 dates to assure consumer protection and monitor 

24 Bank Secrecy Act compliance. 


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1 (5) Agencies’ reliance on outdated technology cre2 ates vulnerabilities for the financial system, caus3 ing— 

4 (A) difficulties in collecting, compiling, and 

5 analyzing relevant information about risks and 

6 noncompliance at supervised firms; 

7 (B) reliance on information that is inac8 curate, incomplete, or not timely; 

9 (C) reliance on limited and outdated tools 

10 for data analysis; 

11 (D) difficulties in using data to identify 

12 risk trends; 

13 (E) difficulties in producing accurate and 

14 timely reports; 

15 (F) inadequacy of cybersecurity safeguards; 

16 and 

17 (G) failure to detect illegal activities. 

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

19 of artificial intelligence may generate opportunities to 

20 improve the financial system while also introducing 

21 a range of risks, making it essential that agencies be 

22 equipped with the technology and skills needed to 

23 analyze these opportunities and potential risks. 

24 (7) While agencies assess their supervisory capa25 bilities on an ongoing basis, it is imperative that 


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1 there be a unified goal to enhancing supervisory tech2 nologies that ensures effective and sustainable over3 sight in the digital age. 

4 SEC. 3. TECHNOLOGICAL VULNERABILITIES AND PROCURE5 MENT PRACTICES ASSESSMENT. 

6 (a) IN GENERAL.— 

7 (1) TECHNOLOGICAL VULNERABILITIES ASSESS8 MENT.—Each covered agency shall, not later than 180 

9 days after the date of the enactment of this section, 

10 assess how existing technological systems used by the 

11 covered agency prevent the covered agency from con12 ducting real-time supervisory assessments of entities 

13 over which the covered agency has supervisory author14 ity, including effects stemming from— 

15 (A) core information technology infrastruc16 ture; 

17 (B) technology used to supervise entities, in18 cluding supervisory technological tools; and 

19 (C) technology for monitoring general mar20 ket risks using reported data and external data. 

21 (2) PROCUREMENT PRACTICES ASSESSMENT.— 

22 Each covered agency shall, not later than 180 days 

23 after the date of the enactment of this section— 

24 (A) assess the procurement rules and proto25 cols adhered to by such covered agency when such 


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1 covered agency acquires or develops new techno2 logical systems; and 

3 (B) identify any challenges created by such 

4 procurement rules and protocols, including the 

5 impact such rules or protocols have on the abil6 ity of the covered agency to test new techno7 logical systems. 

8 (b) REPORT.—Not later than 1 year after the comple9 tion of the assessments required under subsection (a), and 

10 every 5 years thereafter, the covered agencies shall coordi11 nate and jointly submit to the Committee on Financial 

12 Services of the House of Representatives and the Committee 

13 on Banking, Housing, and Urban Affairs of the Senate a 

14 report that includes the following with respect to each cov15 ered agency— 

16 (1) a general overview of hardware and software 

17 used for information gathering and advanced ana18 lytics during supervision activities, including prod19 ucts purchased from technology vendors and products 

20 developed by the covered agency or contractors of the 

21 covered agency; 

22 (2) a description of the procurement practices 

23 and protocols of the covered agency, including a de24 scription of— 


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1 (A) whether such processes are voluntarily 

2 adhered to or mandated; and 

3 (B) any challenges resulting from such 

4 practices and protocols and relevant factors, if 

5 any, that have impacted the covered agency’s 

6 ability to obtain new technology; 

7 (3) a general overview of the portion of workforce 

8 of the covered agency that is engaged primarily in 

9 technology development within the covered agency, in10 cluding— 

11 (A) an overview of the ability of the covered 

12 agency to recruit and retain appropriate tech13 nology experts; 

14 (B) employee self-reported workforce data; 

15 and 

16 (C) a description of the degree to which the 

17 covered agency relies on contractors to design, 

18 develop, or deploy technology and perform tech19 nology-related tasks; 

20 (4) a description of the processes used by the cov21 ered agency to obtain information from entities su22 pervised by the covered agency and general informa23 tion about market trends and risks; 


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1 (5) a description of the ways in which the cov2 ered agency shares information or system access with 

3 other covered agencies; 

4 (6) an evaluation of the level of ease or difficulty 

5 experienced by the covered agency, including any 

6 legal or regulatory challenges, when— 

7 (A) sharing data with other government 

8 agencies; or 

9 (B) collecting data from entities supervised 

10 by the covered agency; 

11 (7) an evaluation of cost for supervised entities 

12 to modify systems to share data with covered agencies; 

13 and 

14 (8) a description of any plans the covered agency 

15 has that relate to how the covered agency will imple16 ment future upgrades to the technology used by the 

17 covered agency to supervise entities supervised by the 

18 covered agency, including— 

19 (A) a general description of any planned 

20 upgrades; 

21 (B) the anticipated timeline for any 

22 planned upgrades; 

23 (C) the costs of any planned upgrades; 

24 (D) any concerns about access to needed re25 sources; 


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1 (E) intended efforts for hiring and training 

2 individuals as part of any technological up3 grades; 

4 (F) any aspects of any planned upgrades 

5 that should be addressed on an interagency basis; 

6 and 

7 (G) any anticipated challenges and solu8 tions associated with entities supervised by the 

9 covered agency adapting to new reporting re10 quirements, including— 

11 (i) estimates of transition costs; and 

12 (ii) estimates of any potential cost re13 ductions. 

14 (c) COVERED AGENCY DEFINED.—In this section, the 

15 ‘‘covered agency’’ means the Board of Governors of the Fed16 eral Reserve System, the Federal Deposit Insurance Cor17 poration, Office of the Comptroller of the Currency, the Bu18 reau of Consumer Financial Protection, and the National 

19 Credit Union Administration. 


ssavage on LAPJG3WLY3PROD with BILLS
Union Calendar No. 615 

118TH CONGRESS 

2D SESSION H. R. 7437 

[Report No. 118–728] 

A BILL 

To require certain supervisory agencies to assess 

purposes. their technological vulnerabilities, and for other 

NOVEMBER 1, 2024 

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


ssavage on LAPJG3WLY3PROD with BILLS