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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Financial Services Innovation Act of 2024’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
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. 
SEC. 2. DEFINITIONS. 
In this Act, the following definitions shall apply: 
(1) AGENCY REGULATION.—The term ‘‘agency 
regulation’’ means— 
(A) a rule (as defined in section 551 of 
title 5, United States Code) issued by an agen-
cy; 
(B) guidance issued by an agency; or 
(C) a published proposed or interim rule, 
policy statement, directive, adjudication, or in-
terpretation of an agency. 
(2) AGENCY.—The term ‘‘agency’’ means each 
of the Board of Governors of the Federal Reserve 
System, the Bureau of Consumer Financial Protec-
tion, the Department of Housing and Urban Devel-
opment, the Department of the Treasury, the Fed-
eral Deposit Insurance Corporation, the Federal 
Housing Finance Agency, the National Credit Union 
Administration Board, the Office of the Comptroller 
of the Currency, and the Securities and Exchange 
Commission. 
(3) COVERED
PERSON.—The term ‘‘covered 
person’’ means a person that offers or intends to 
offer a financial innovation by submitting a petition 
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to a Financial Services Innovation Office at one or 
more agencies. 
(4) 
ENFORCEABLE
COMPLIANCE
AGREE-
MENT.—The term ‘‘enforceable compliance agree-
ment’’ means an agreement described under section 
8. 
(5) FINANCIAL INNOVATION.—The term ‘‘finan-
cial innovation’’ means a financial product or service 
(as defined in section 1002 of the Consumer Finan-
cial Protection Act of 2010 (12 U.S.C. 5481))— 
(A) the delivery of which is enabled by 
technology; and 
(B) that is or may be subject to an agency 
regulation or Federal statute. 
(6) FINANCIAL SERVICES INNOVATION OFFICE; 
FSIO.—The term ‘‘Financial Services Innovative Of-
fice’’ or ‘‘FSIO’’ means an office established in an 
agency pursuant to section 4. 
SEC. 3. AGENCY IDENTIFICATION OF REGULATORY AREAS. 
Not later than 60 days after the date of the enact-
ment of this Act, and biannually thereafter, each agency 
shall publish in the Federal Register a nonexclusive list 
that identifies 3 or more areas of existing agency regula-
tion— 
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(1) that apply or may apply to a financial inno-
vation; and 
(2) that the agency would consider modifying or 
waiving if the agency were to receive a petition 
under section 6 relating to that regulation. 
SEC. 4. ESTABLISHMENT OR DESIGNATION OF FSIO AT 
AGENCIES. 
(a) IN GENERAL.—Each agency shall establish or 
designate an office within the agency to be known as the 
‘‘Financial Services Innovation Office’’ of the ‘‘FSIO’’. 
Each such Financial Services Innovation Office shall to 
promote financial innovations and to assist a covered per-
son with an approved petition under section 7. 
(b) ADMINISTRATION.—Each agency shall designate 
an individual to serve as the head of the agency’s FSIO. 
(c) DUTIES.— 
(1) GENERAL
DUTIES.—Each agency, acting 
through the agency’s FSIO, shall— 
(A) support the development of financial 
innovations; 
(B) coordinate with FSIOs at other agen-
cies to share information and data about finan-
cial innovations; 
(C) upon request, coordinate with relevant 
State regulatory entities to provide information 
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to the public with respect to financial innova-
tions and agency regulations related to such fi-
nancial innovations; and 
(D) establish procedures to reduce the reg-
ulatory burden of offering a financial innovation 
to the public and enable greater access to finan-
cial innovations. 
(2) DUTIES FOR PETITIONS.—With respect to a 
covered person with an approved petition under sec-
tion 7, each FSIO shall— 
(A) work with the covered person to ad-
dress issues of how existing regulatory frame-
works apply to the financial innovation that is 
the subject of the petition; 
(B) assist the covered person in complying 
with the requirements of Federal regulators of 
the financial innovation; and 
(C) assist the covered person in responding 
to any challenges to a modification or a waiver 
granted under subsection (d). 
(d) 
WAIVER
AUTHORITY.—An 
agency, 
acting 
through the agency’s FSIO, may modify or waive the ap-
plication of an agency regulation of the agency or the Fed-
eral statute under which the agency has rulemaking au-
thority if— 
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(1) a petition of the covered person has been 
approved under section 7; and 
(2) the agency determines that compliance with 
such agency regulation or Federal statute would im-
pede the ability of a covered person to offer the fi-
nancial innovation that is the subject of the petition. 
(e) TERMINATION OF OTHER PROGRAMS; TRANSFER 
OF AUTHORITY.— 
(1) IN GENERAL.—Not later than 90 days after 
the establishment or designation of a FSIO at an 
agency, the agency shall modify any offices or pro-
grams at the agency that promote financial innova-
tions or assist covered persons in offering financial 
innovations, and merge or transfer the operations of 
such offices or programs into the FSIO. 
(2) LEGAL ACTIONS OR PROCEEDINGS.—On the 
date that is 90 days after the establishment or des-
ignation of a FSIO at an agency, any legal action 
or proceeding commenced by or against any other 
offices or programs at the agency that promote fi-
nancial innovations or assist covered persons in of-
fering financial innovations, including no-action let-
ters and staff advisory opinions, shall be transferred 
to the FSIO of that agency. 
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(f) REPORT.—Not later than 6 months after the date 
of the enactment of this Act, and annually thereafter, each 
agency shall present testimony to Congress and submit a 
report to Congress and to the Financial Stability Over-
sight Council on the activities of the FSIO of such agency, 
including a description of the petitions considered, the ra-
tionale for acceptance or rejection of petitions, and the ef-
forts of the FSIO to encourage financial innovations. 
(g) ELIMINATION OF FSIO.—If an agency has not 
received a petition described in section 6 within 5 years 
of the date of the establishment of the FSIO of such agen-
cy, the agency shall eliminate the FSIO. Such agency shall 
continue to comply with the requirements of any 
multiparty agreement entered into pursuant to section 
8(c) on or before the date of such elimination. 
SEC. 5. FSIO LIAISON COMMITTEE AND CHAIR. 
(a) ESTABLISHMENT.—Not later than 60 days after 
the date of the enactment of this Act, the agencies shall 
establish a committee to be known as the ‘‘FSIO Liaison 
Committee’’. 
(b) MEMBERS.—The FSIO Liaison Committee shall 
be composed of the head of each FSIO described under 
section 4 and a State banking supervisor selected by the 
Conference of State Bank Supervisors (or a successor or-
ganization). 
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(c) DUTIES.—The FSIO Liaison Committee shall— 
(1) consult on the administration, coordination, 
and oversight the FSIO of each agency; 
(2) facilitate the cooperation of each FSIO to 
ensure that agencies share information and data on 
petitions submitted under section 6; 
(3) monitor proposals for agency regulation and 
developments related to financial innovations; 
(4) encourage the application of uniform prin-
ciples and standards at each FSIO; and 
(5) facilitate collaboration with relevant State 
regulatory entities to provide information to the pub-
lic with respect to financial innovations and agency 
regulations related to such financial innovations. 
(d) MEETINGS.—The FSIO Liaison Committee shall 
meet at least twice a year. 
(e) CHAIR.— 
(1) ESTABLISHMENT.—The first Chair of the 
FSIO Liaison Committee shall be elected by the 
members. The Chair shall serve for a term of 2 
years and thereafter the chairmanship shall rotate 
among the members of the committee. 
(2) POWERS OF THE CHAIR.—The Chair is au-
thorized to carry out the internal administration of 
the FSIO Liaison Committee, including the appoint-
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ment and supervision of employees and the distribu-
tion of tasks among members, employees, and ad-
ministrative units. 
(f) TESTIMONY.—Not later than 6 months after the 
date of the enactment of this Act, the Chair of the FSIO 
Liaison Committee shall present testimony to Congress on 
the activities of the FSIO Liaison Committee. 
(g) FUNDING.— 
(1) COMPENSATION OF MEMBERS.—Each mem-
ber of the FSIO Liaison Committee shall serve with-
out additional compensation but shall be entitled to 
reasonable expenses incurred in carrying out official 
duties as such a member. 
(2) GENERAL EXPENSES.—The costs and ex-
penses of the FSIO Liaison Committee, including 
the salaries of employees, shall be split equally be-
tween, and paid by, each agency other than an agen-
cy that has eliminated the agency’s FSIO pursuant 
to section 4(g). 
SEC. 6. PETITION TO AGENCY. 
(a) IN GENERAL.—A covered person may submit a 
petition to an agency, through the agency’s FSIO, in such 
form and in such manner as the agency’s FSIO may re-
quire, to request to enter into an enforceable compliance 
agreement containing a modification or waiver of an agen-
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cy regulation of the agency or the Federal statute under 
which the agency has rulemaking authority with respect 
to— 
(1) the covered person; or 
(2) a financial innovation the covered person of-
fers or intends to offer. 
(b) CONTENTS.—In a petition submitted under this 
section, the covered person shall— 
(1) submit an alternative compliance strategy 
that proposes a method to comply with the agency 
regulation or Federal statutory requirement; and 
(2) demonstrate that under the alternative com-
pliance strategy, the financial innovation— 
(A) would serve the public interest; 
(B) improves consumer access to a finan-
cial product or service; 
(C) would not present systemic risk to the 
United States financial system; and 
(D) would promote consumer protection. 
(c) MULTIPARTY PETITIONS.—One or more covered 
persons that offer or intend to offer similar financial inno-
vations may jointly submit a petition under this section. 
(d) SAFE HARBOR.— 
(1) IN GENERAL.—During the period after a 
covered person submits a petition under this section 
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and before the agency receiving the petition makes 
a determination on the petition pursuant to section 
7, an agency may not take an enforcement action 
against a covered person relating to the financial in-
novation that was the subject of the petition. 
(2) INJUNCTIVE RELIEF.—If an agency deter-
mines that a financial innovation described under 
paragraph (1) presents an immediate danger to con-
sumers or presents systemic risk to the United 
States financial system, the agency may apply to a 
court of competent jurisdiction for an injunction to 
prohibit a covered person from offering such finan-
cial innovation during the period described in para-
graph (1). 
(3) PRESERVATION
OF
ANTI-FRAUD
AUTHOR-
ITY.—This subsection shall not apply to the author-
ity of an agency to take an enforcement action 
against a covered person with respect to fraud relat-
ing to the financial innovation that was the subject 
of the petition. 
(e) NOTICE AND COMMENT.— 
(1) IN GENERAL.—Not later than 30 days after 
receiving a petition, the agency that receives the pe-
tition shall publish the petition in the Federal Reg-
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ister and provide a 60-day period for public notice 
and comment. 
(2) EXCEPTION FOR NOTICE AND COMMENT PE-
RIOD.—The agency that receives the petition may 
waive the notice and comment period described in 
paragraph (1) if such agency determines that the 
covered person submitting the petition is similarly 
situated to another covered person that has been 
granted approval of a petition pursuant to section 7. 
(3) 
CONFIDENTIALITY.—The 
agency 
shall 
maintain the confidentiality of any nonpublicly avail-
able data or information in any petition submitted 
under this section. The agency shall give reasonable 
consideration to maintaining the confidentiality of 
data or information identified by the covered person 
in the petition submitting under this section as non-
publicly available data or information. 
SEC. 7. AGENCY DETERMINATION OF PETITION. 
(a) IN GENERAL.—Not later than 30 days after the 
end of the comment period described under section 6 (or 
if the comment period was waived, not later than 60 days 
after receipt of a petition under section 6), the head of 
the agency receiving the petition shall complete a review 
of the petition and notify the covered person, in writing, 
of the agency’s determination of the petition. 
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(b) APPROVAL.—If the covered person submitting the 
petition shows that it is more likely than not that the cov-
ered person meets the requirements for establishing an al-
ternative compliance strategy, the agency shall— 
(1) approve the petition; and 
(2) enter into an enforceable compliance agree-
ment with the covered person in accordance with the 
requirements of section 8. 
(c) DISAPPROVAL.— 
(1) EXPLANATION.—If the agency disapproves 
a petition, the agency head shall provide the covered 
person with a written notice explaining the reason 
for such disapproval, including— 
(A) evidence that the covered person did 
not satisfy the requirements for establishing an 
alternative compliance strategy; 
(B) an identification of any agency regula-
tions or Federal statutes applicable to the cov-
ered person with respect to the financial innova-
tion that were omitted from the petition; and 
(C) a description of— 
(i) any beneficial effects, including an 
identification of persons likely to benefit, 
from rejecting the petition; 
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(ii) any potential costs, including an 
identification of persons likely to bear the 
costs, of rejecting the petition; and 
(iii) the baseline used by the agency to 
measure the likely economic consequences 
of rejecting the petition. 
(2) RESUBMITTAL.—Receipt of a notice of dis-
approval of a petition under this subsection shall not 
preclude a covered person from revising and resub-
mitting such petition to the agency under section 6. 
(d) MORATORIUM.—If an agency disapproves a peti-
tion submitted in good faith under this section, the agency 
shall provide the covered person a reasonable amount of 
time before the agency takes an enforcement action 
against the covered person relating to the financial innova-
tion that was the subject of the petition. 
(e) JUDICIAL REVIEW.—A covered person may seek 
judicial review of an agency’s determination on a petition 
in accordance with subchapter II of chapter 5 of title 5, 
United States Code, and chapter 7 of such title (commonly 
known as the ‘‘Administrative Procedure Act’’). 
SEC. 8. ENFORCEABLE COMPLIANCE AGREEMENT. 
(a) IN GENERAL.—If an agency approves a petition 
under section 7, the covered person shall enter into an 
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enforceable compliance agreement with the agency, which 
shall include— 
(1) the terms under which the approved finan-
cial innovation may be developed or offered to the 
public; and 
(2) any requirements of the covered person and 
any agency with respect to the financial innovation. 
(b) REQUIREMENTS.—Each agency, by rule, shall es-
tablish requirements relating to enforceable compliance 
agreements that include— 
(1) procedures for modifying the terms of the 
agreement; 
(2) consequences for failure to comply with the 
terms of the agreement; 
(3) a compliance examination process that— 
(A) solicits feedback from other agencies 
on the agreement; and 
(B) occurs not less frequently than annu-
ally; 
(4) a termination date for the agreement that 
is at least 1 year after the date on which the agree-
ment is entered into; 
(5) procedures for extending the termination 
date; 
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(6) procedures for judicial review of another 
agency’s or State’s challenge to the agreement in ac-
cordance with subchapter II of chapter 5 of title 5, 
United States Code, and chapter 7 of such title 
(commonly known as the ‘‘Administrative Procedure 
Act’’); and 
(7) procedures for maintaining the confiden-
tiality of any information disclosed to the agency 
during the process of drafting and entering into 
agreement. 
(c) MULTIPARTY AGREEMENTS.—With respect to a 
financial innovation that is the subject of an enforceable 
compliance agreement entered into under this section, an 
agency that did not enter into such enforceable compliance 
agreement may join as a party to the enforceable compli-
ance agreement entered into pursuant to this section. 
(d) LIMITATION ON ENFORCEMENT ACTIONS.— 
(1) IN GENERAL.—If a covered person and an 
agency enter into an enforceable compliance agree-
ment— 
(A) another agency that is not party to the 
multiparty agreement described in subsection 
(c) may not commence an enforcement action 
against the covered person with respect to the 
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financial innovation that is the subject of the 
enforceable compliance agreement; and 
(B) a State may not commence an enforce-
ment action against the covered person with re-
spect to the financial innovation that is the sub-
ject of the enforceable compliance agreement, if 
the covered person provides the State with— 
(i) the enforcement compliance agree-
ment; and 
(ii) a statement of policies and proce-
dures the covered person has in place to 
comply with State laws that are applicable 
to the financial innovation. 
(2) 
STATE
EXCEPTION
FOR
CONSUMER 
HARM.—Notwithstanding paragraph (1)(B), a State 
may commence an enforcement action against a cov-
ered person with respect to a financial innovation 
that is the subject of an enforceable compliance 
agreement if, in an action brought by the State in 
a court of competent jurisdiction, the court deter-
mines that the agency’s action was arbitrary and ca-
pricious and the financial innovation has substan-
tially harmed consumers within such State. 
(e) ARBITRATION.—A covered person may elect to ar-
bitrate any action initiated by another person relating to 
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a financial innovation that is the subject of the enforceable 
compliance agreement. 
SEC. 9. REPORT TO CONGRESS. 
Not later than 1 year after the date of the enactment 
of this Act, and annually thereafter, the Financial Sta-
bility Oversight Council shall submit to Congress a report 
on the aggregate impact of enforceable compliance agree-
ments entered into under this Act, which shall include— 
(1) the number and characteristics of the agree-
ments; 
(2) the most innovative and least burdensome 
tools that the agency’s FSIO has implemented to 
allow a financial innovation that is the subject of an 
enforceable compliance agreement to be offered; 
(3) strategies implemented to coordinate and 
facilitate cooperation among FSIOs; 
(4) the existing Federal and State laws, regula-
tions, or practices (including guidance materials, ex-
aminations, and enforcement proceedings and settle-
ments) that the Financial Stability Oversight Coun-
cil identifies as the most burdensome to innovation 
that adversely affect competition in the financial 
services industry, or that restrict improvements for 
consumers of financial products or services; and 
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(5) an identification of the overlap or frag-
mentation of agency regulations of financial prod-
ucts or services and recommendations for reducing, 
consolidating, or eliminating such overlap or frag-
mentation. 
Æ 
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