I 

118TH CONGRESS 

2D SESSION H. R. 7440 

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 

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 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. 


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Sec. 8. Enforceable compliance agreement. 

Sec. 9. Report to Congress. 

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 Department of Housing and Urban Devel16 opment, the Department of the Treasury, the Fed17 eral Deposit Insurance Corporation, the Federal 

18 Housing Finance Agency, the National Credit Union 

19 Administration Board, the Office of the Comptroller 

20 of the Currency, and the Securities and Exchange 

21 Commission. 

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

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

24 offer a financial innovation by submitting a petition 


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1 to a Financial Services Innovation Office at one or 

2 more agencies. 

3 (4) ENFORCEABLE COMPLIANCE AGREE4 MENT.—The term ‘‘enforceable compliance agree5 ment’’ means an agreement described under section 

6 8. 

7 (5) FINANCIAL INNOVATION.—The term ‘‘finan8 cial innovation’’ means a financial product or service 

9 (as defined in section 1002 of the Consumer Finan10 cial Protection Act of 2010 (12 U.S.C. 5481))— 

11 (A) the delivery of which is enabled by 

12 technology; and 

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

14 regulation or Federal statute. 

15 (6) FINANCIAL SERVICES INNOVATION OFFICE; 

16 FSIO.—The term ‘‘Financial Services Innovative Of17 fice’’ or ‘‘FSIO’’ means an office established in an 

18 agency pursuant to section 4. 

19 SEC. 3. AGENCY IDENTIFICATION OF REGULATORY AREAS. 

20 Not later than 60 days after the date of the enact21 ment of this Act, and biannually thereafter, each agency 

22 shall publish in the Federal Register a nonexclusive list 

23 that identifies 3 or more areas of existing agency regula24 tion— 


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1 (1) that apply or may apply to a financial inno2 vation; and 

3 (2) that the agency would consider modifying or 

4 waiving if the agency were to receive a petition 

5 under section 6 relating to that regulation. 

6 SEC. 4. ESTABLISHMENT OR DESIGNATION OF FSIO AT 

7 AGENCIES. 

8 (a) IN GENERAL.—Each agency shall establish or 

9 designate an office within the agency to be known as the 

10 ‘‘Financial Services Innovation Office’’ of the ‘‘FSIO’’. 

11 Each such Financial Services Innovation Office shall to 

12 promote financial innovations and to assist a covered per13 son with an approved petition under section 7. 

14 (b) ADMINISTRATION.—Each agency shall designate 

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

16 (c) DUTIES.— 

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

18 through the agency’s FSIO, shall— 

19 (A) support the development of financial 

20 innovations; 

21 (B) coordinate with FSIOs at other agen22 cies to share information and data about finan23 cial innovations; 

24 (C) upon request, coordinate with relevant 

25 State regulatory entities to provide information 


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1 to the public with respect to financial innova2 tions and agency regulations related to such fi3 nancial innovations; and 

4 (D) establish procedures to reduce the reg5 ulatory burden of offering a financial innovation 

6 to the public and enable greater access to finan7 cial innovations. 

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

9 covered person with an approved petition under sec10 tion 7, each FSIO shall— 

11 (A) work with the covered person to ad12 dress issues of how existing regulatory frame13 works apply to the financial innovation that is 

14 the subject of the petition; 

15 (B) assist the covered person in complying 

16 with the requirements of Federal regulators of 

17 the financial innovation; and 

18 (C) assist the covered person in responding 

19 to any challenges to a modification or a waiver 

20 granted under subsection (d). 

21 (d) WAIVER AUTHORITY.—An agency, acting 

22 through the agency’s FSIO, may modify or waive the ap23 plication of an agency regulation of the agency or the Fed24 eral statute under which the agency has rulemaking au25 thority if— 


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1 (1) a petition of the covered person has been 

2 approved under section 7; and 

3 (2) the agency determines that compliance with 

4 such agency regulation or Federal statute would im5 pede the ability of a covered person to offer the fi6 nancial innovation that is the subject of the petition. 

7 (e) TERMINATION OF OTHER PROGRAMS; TRANSFER

8 OF AUTHORITY.— 

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

10 the establishment or designation of a FSIO at an 

11 agency, the agency shall modify any offices or pro12 grams at the agency that promote financial innova13 tions or assist covered persons in offering financial 

14 innovations, and merge or transfer the operations of 

15 such offices or programs into the FSIO. 

16 (2) LEGAL ACTIONS OR PROCEEDINGS.—On the 

17 date that is 90 days after the establishment or des18 ignation of a FSIO at an agency, any legal action 

19 or proceeding commenced by or against any other 

20 offices or programs at the agency that promote fi21 nancial innovations or assist covered persons in of22 fering financial innovations, including no-action let23 ters and staff advisory opinions, shall be transferred 

24 to the FSIO of that agency. 


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

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

3 agency shall present testimony to Congress and submit a 

4 report to Congress and to the Financial Stability Over5 sight Council on the activities of the FSIO of such agency, 

6 including a description of the petitions considered, the ra7 tionale for acceptance or rejection of petitions, and the ef8 forts of the FSIO to encourage financial innovations. 

9 (g) ELIMINATION OF FSIO.—If an agency has not 

10 received a petition described in section 6 within 5 years 

11 of the date of the establishment of the FSIO of such agen12 cy, the agency shall eliminate the FSIO. Such agency shall 

13 continue to comply with the requirements of any 

14 multiparty agreement entered into pursuant to section 

15 8(c) on or before the date of such elimination. 

16 SEC. 5. FSIO LIAISON COMMITTEE AND CHAIR. 

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

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

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

20 Committee’’. 

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

22 be composed of the head of each FSIO described under 

23 section 4 and a State banking supervisor selected by the 

24 Conference of State Bank Supervisors (or a successor or25 ganization). 


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

2 (1) consult on the administration, coordination, 

3 and oversight the FSIO of each agency; 

4 (2) facilitate the cooperation of each FSIO to 

5 ensure that agencies share information and data on 

6 petitions submitted under section 6; 

7 (3) monitor proposals for agency regulation and 

8 developments related to financial innovations; 

9 (4) encourage the application of uniform prin10 ciples and standards at each FSIO; and 

11 (5) facilitate collaboration with relevant State 

12 regulatory entities to provide information to the pub13 lic with respect to financial innovations and agency 

14 regulations related to such financial innovations. 

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

16 meet at least twice a year. 

17 (e) CHAIR.— 

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

19 FSIO Liaison Committee shall be elected by the 

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

21 years and thereafter the chairmanship shall rotate 

22 among the members of the committee. 

23 (2) POWERS OF THE CHAIR.—The Chair is au24 thorized to carry out the internal administration of 

25 the FSIO Liaison Committee, including the appointVerDate Sep 11 2014 22:47 Feb 23, 2024 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7440.IH H7440

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1 ment and supervision of employees and the distribu2 tion of tasks among members, employees, and ad3 ministrative units. 

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

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

6 Liaison Committee shall present testimony to Congress on 

7 the activities of the FSIO Liaison Committee. 

8 (g) FUNDING.— 

9 (1) COMPENSATION OF MEMBERS.—Each mem10 ber of the FSIO Liaison Committee shall serve with11 out additional compensation but shall be entitled to 

12 reasonable expenses incurred in carrying out official 

13 duties as such a member. 

14 (2) GENERAL EXPENSES.—The costs and ex15 penses of the FSIO Liaison Committee, including 

16 the salaries of employees, shall be split equally be17 tween, and paid by, each agency other than an agen18 cy that has eliminated the agency’s FSIO pursuant 

19 to section 4(g). 

20 SEC. 6. PETITION TO AGENCY. 

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

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

23 form and in such manner as the agency’s FSIO may re24 quire, to request to enter into an enforceable compliance 

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1 cy regulation of the agency or the Federal statute under 

2 which the agency has rulemaking authority with respect 

3 to— 

4 (1) the covered person; or 

5 (2) a financial innovation the covered person of6 fers or intends to offer. 

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

8 section, the covered person shall— 

9 (1) submit an alternative compliance strategy 

10 that proposes a method to comply with the agency 

11 regulation or Federal statutory requirement; and 

12 (2) demonstrate that under the alternative com13 pliance strategy, the financial innovation— 

14 (A) would serve the public interest; 

15 (B) improves consumer access to a finan16 cial product or service; 

17 (C) would not present systemic risk to the 

18 United States financial system; and 

19 (D) would promote consumer protection. 

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

21 persons that offer or intend to offer similar financial inno22 vations may jointly submit a petition under this section. 

23 (d) SAFE HARBOR.— 

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

25 covered person submits a petition under this section 


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1 and before the agency receiving the petition makes 

2 a determination on the petition pursuant to section 

3 7, an agency may not take an enforcement action 

4 against a covered person relating to the financial in5 novation that was the subject of the petition. 

6 (2) INJUNCTIVE RELIEF.—If an agency deter7 mines that a financial innovation described under 

8 paragraph (1) presents an immediate danger to con9 sumers or presents systemic risk to the United 

10 States financial system, the agency may apply to a 

11 court of competent jurisdiction for an injunction to 

12 prohibit a covered person from offering such finan13 cial innovation during the period described in para14 graph (1). 

15 (3) PRESERVATION OF ANTI-FRAUD AUTHOR16 ITY.—This subsection shall not apply to the author17 ity of an agency to take an enforcement action 

18 against a covered person with respect to fraud relat19 ing to the financial innovation that was the subject 

20 of the petition. 

21 (e) NOTICE AND COMMENT.— 

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

23 receiving a petition, the agency that receives the pe24 tition shall publish the petition in the Federal RegVerDate Sep 11 2014 22:47 Feb 23, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7440.IH H7440

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1 ister and provide a 60-day period for public notice 

2 and comment. 

3 (2) EXCEPTION FOR NOTICE AND COMMENT PE4 RIOD.—The agency that receives the petition may 

5 waive the notice and comment period described in 

6 paragraph (1) if such agency determines that the 

7 covered person submitting the petition is similarly 

8 situated to another covered person that has been 

9 granted approval of a petition pursuant to section 7. 

10 (3) CONFIDENTIALITY.—The agency shall 

11 maintain the confidentiality of any nonpublicly avail12 able data or information in any petition submitted 

13 under this section. The agency shall give reasonable 

14 consideration to maintaining the confidentiality of 

15 data or information identified by the covered person 

16 in the petition submitting under this section as non17 publicly available data or information. 

18 SEC. 7. AGENCY DETERMINATION OF PETITION. 

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

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

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

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

23 the agency receiving the petition shall complete a review 

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

25 of the agency’s determination of the petition. 


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

2 petition shows that it is more likely than not that the cov3 ered person meets the requirements for establishing an al4 ternative compliance strategy, the agency shall— 

5 (1) approve the petition; and 

6 (2) enter into an enforceable compliance agree7 ment with the covered person in accordance with the 

8 requirements of section 8. 

9 (c) DISAPPROVAL.— 

10 (1) EXPLANATION.—If the agency disapproves 

11 a petition, the agency head shall provide the covered 

12 person with a written notice explaining the reason 

13 for such disapproval, including— 

14 (A) evidence that the covered person did 

15 not satisfy the requirements for establishing an 

16 alternative compliance strategy; 

17 (B) an identification of any agency regula18 tions or Federal statutes applicable to the cov19 ered person with respect to the financial innova20 tion that were omitted from the petition; and 

21 (C) a description of— 

22 (i) any beneficial effects, including an 

23 identification of persons likely to benefit, 

24 from rejecting the petition; 


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1 (ii) any potential costs, including an 

2 identification of persons likely to bear the 

3 costs, of rejecting the petition; and 

4 (iii) the baseline used by the agency to 

5 measure the likely economic consequences 

6 of rejecting the petition. 

7 (2) RESUBMITTAL.—Receipt of a notice of dis8 approval of a petition under this subsection shall not 

9 preclude a covered person from revising and resub10 mitting such petition to the agency under section 6. 

11 (d) MORATORIUM.—If an agency disapproves a peti12 tion submitted in good faith under this section, the agency 

13 shall provide the covered person a reasonable amount of 

14 time before the agency takes an enforcement action 

15 against the covered person relating to the financial innova16 tion that was the subject of the petition. 

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

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

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

20 United States Code, and chapter 7 of such title (commonly 

21 known as the ‘‘Administrative Procedure Act’’). 

22 SEC. 8. ENFORCEABLE COMPLIANCE AGREEMENT. 

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

24 under section 7, the covered person shall enter into an 


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1 enforceable compliance agreement with the agency, which 

2 shall include— 

3 (1) the terms under which the approved finan4 cial innovation may be developed or offered to the 

5 public; and 

6 (2) any requirements of the covered person and 

7 any agency with respect to the financial innovation. 

8 (b) REQUIREMENTS.—Each agency, by rule, shall es9 tablish requirements relating to enforceable compliance 

10 agreements that include— 

11 (1) procedures for modifying the terms of the 

12 agreement; 

13 (2) consequences for failure to comply with the 

14 terms of the agreement; 

15 (3) a compliance examination process that— 

16 (A) solicits feedback from other agencies 

17 on the agreement; and 

18 (B) occurs not less frequently than annu19 ally; 

20 (4) a termination date for the agreement that 

21 is at least 1 year after the date on which the agree22 ment is entered into; 

23 (5) procedures for extending the termination 

24 date; 


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1 (6) procedures for judicial review of another 

2 agency’s or State’s challenge to the agreement in ac3 cordance with subchapter II of chapter 5 of title 5, 

4 United States Code, and chapter 7 of such title 

5 (commonly known as the ‘‘Administrative Procedure 

6 Act’’); and 

7 (7) procedures for maintaining the confiden8 tiality of any information disclosed to the agency 

9 during the process of drafting and entering into 

10 agreement. 

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

12 financial innovation that is the subject of an enforceable 

13 compliance agreement entered into under this section, an 

14 agency that did not enter into such enforceable compliance 

15 agreement may join as a party to the enforceable compli16 ance agreement entered into pursuant to this section. 

17 (d) LIMITATION ON ENFORCEMENT ACTIONS.— 

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

19 agency enter into an enforceable compliance agree20 ment— 

21 (A) another agency that is not party to the 

22 multiparty agreement described in subsection 

23 (c) may not commence an enforcement action 

24 against the covered person with respect to the 


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1 financial innovation that is the subject of the 

2 enforceable compliance agreement; and 

3 (B) a State may not commence an enforce4 ment action against the covered person with re5 spect to the financial innovation that is the sub6 ject of the enforceable compliance agreement, if 

7 the covered person provides the State with— 

8 (i) the enforcement compliance agree9 ment; and 

10 (ii) a statement of policies and proce11 dures the covered person has in place to 

12 comply with State laws that are applicable 

13 to the financial innovation. 

14 (2) STATE EXCEPTION FOR CONSUMER

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

16 may commence an enforcement action against a cov17 ered person with respect to a financial innovation 

18 that is the subject of an enforceable compliance 

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

20 a court of competent jurisdiction, the court deter21 mines that the agency’s action was arbitrary and ca22 pricious and the financial innovation has substan23 tially harmed consumers within such State. 

24 (e) ARBITRATION.—A covered person may elect to ar25 bitrate any action initiated by another person relating to 


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1 a financial innovation that is the subject of the enforceable 

2 compliance agreement. 

3 SEC. 9. REPORT TO CONGRESS. 

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

5 of this Act, and annually thereafter, the Financial Sta6 bility Oversight Council shall submit to Congress a report 

7 on the aggregate impact of enforceable compliance agree8 ments entered into under this Act, which shall include— 

9 (1) the number and characteristics of the agree10 ments; 

11 (2) the most innovative and least burdensome 

12 tools that the agency’s FSIO has implemented to 

13 allow a financial innovation that is the subject of an 

14 enforceable compliance agreement to be offered; 

15 (3) strategies implemented to coordinate and 

16 facilitate cooperation among FSIOs; 

17 (4) the existing Federal and State laws, regula18 tions, or practices (including guidance materials, ex19 aminations, and enforcement proceedings and settle20 ments) that the Financial Stability Oversight Coun21 cil identifies as the most burdensome to innovation 

22 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 frag2 mentation of agency regulations of financial prod3 ucts or services and recommendations for reducing, 

4 consolidating, or eliminating such overlap or frag5 mentation. 

Æ 


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