I 
114TH CONGRESS 
2D SESSION 
H. R. 6118 
To promote innovation in financial services, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 22, 2016 
Mr. MCHENRY introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on Agri-
culture, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
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 2016’’. 
(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 of FSIO at agencies. 
Sec. 5. FSIO Liaison Committee and chair. 
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Sec. 6. Petition to agency. 
Sec. 7. Agency determination of petition. 
Sec. 8. Enforceable compliance agreement. 
Sec. 9. Report to Congress. 
Sec. 10. Funding. 
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 Commodity Futures Trading Commission, 
the Department of Housing and Urban Develop-
ment, the Department of the Treasury, the Farm 
Credit Administration, the Federal Deposit Insur-
ance Corporation, the Federal Housing Finance 
Agency, the Federal Trade Commission, the Na-
tional Credit Union Administration Board, the Of-
fice of the Comptroller of the Currency, and the Se-
curities and Exchange Commission. 
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(3) COVERED
PERSON.—The term ‘‘covered 
person’’ means a person that offers or intends to 
offer a financial innovation by submitting a petition 
to a Financial Services Innovation Office at one or 
more agencies. 
(4) 
ENFORCEABLE
COMPLIANCE
AGREE-
MENT.—The term ‘‘enforceable compliance agree-
ment’’ means a contractual agreement described 
under section 8. 
(5) FINANCIAL INNOVATION.—The term ‘‘finan-
cial innovation’’ means an innovative financial serv-
ice or product, the delivery of which is enabled by 
technology, that is or may be subject to an agency 
regulation or Federal statute. 
(6) FINANCIAL SERVICES INNOVATION OFFICE 
OR FSIO.—The term ‘‘Financial Services Innovative 
Office’’ or ‘‘FSIO’’ means an office established in an 
agency pursuant to section 5. 
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 regulation— 
(1) that apply or may apply to a financial inno-
vation; and 
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(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 OF FSIO AT AGENCIES. 
(a) IN GENERAL.—Each agency shall establish a Fi-
nancial Services Innovation Office (known as ‘‘FSIO’’) to 
promote financial innovations and to assist a covered per-
son whose petition has been approved under section 7. 
(b) DIRECTOR.—Each agency shall appoint an indi-
vidual to serve as the Director 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; and 
(C) establish procedures to reduce the time 
and cost of offering a financial innovation to 
the public and enable greater access to financial 
innovations. 
(2) DUTIES FOR PETITIONS.—With respect to a 
covered person whose petition has been approved 
under section 7, each FSIO shall— 
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(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.—With respect to a covered 
person whose petition has been approved under section 7, 
if an agency has a rational basis for doing so and if the 
agency determines that a provision of a Federal statute 
under which the agency has rulemaking authority or an 
agency regulation is burdensome to the covered person, 
the agency shall, acting through the agency’s FSIO, mod-
ify or waive the application of the Federal statute or the 
agency regulation. 
(e) TERMINATION OF OTHER PROGRAMS; TRANSFER 
OF AUTHORITY.—Not later than 90 days after the estab-
lishment of a FSIO at an agency, the agency shall modify 
any offices or programs at the agency that promote finan-
cial innovations or assist covered persons in developing fi-
nancial innovations to operate within the FSIO. Any legal 
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action or proceeding commenced by or against such office 
or program of the agency, including no-action letters and 
staff advisory opinions, shall be transferred to the FSIO 
of that agency. 
(f) REPORT.—Not later than 6 months after the date 
of the enactment of this Act, and annually thereafter, each 
agency shall submit a report to Congress and to the Fi-
nancial Stability Oversight Council, and shall present tes-
timony to Congress, on the activities of the FSIO, includ-
ing a description of the petitions considered, the rationale 
for acceptance or rejection of petitions, and the efforts of 
the FSIO to encourage financial innovations. 
(g) SUNSET.—If an agency has not received a peti-
tion described in section 6 within 5 years of the date of 
the establishment of the agency’s FSIO, the agency shall 
eliminate the FSIO, while continuing to honor any en-
forceable compliance agreement of another agency. 
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 Director of each FSIO office and a 
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State banking supervisor selected by the Conference of 
State Bank Supervisors (or a successor organization). 
(c) DUTIES.—The FSIO Liaison Committee shall— 
(1) consult on the administration, coordination, 
and oversight of each agency’s FSIO; 
(2) facilitate the cooperation of each FSIO to 
ensure that agencies share information and data on 
petitions submitted under section 6; 
(3) monitor regulatory proposals and develop-
ments related to financial innovations; 
(4) encourage the application of uniform prin-
ciples and standards at each FSIO; and 
(5) hold public field hearings 4 times a year to 
informally provide— 
(A) information and advice to the public 
and covered persons; and 
(B) a forum to gather information from 
the public and covered persons. 
(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 
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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-
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). 
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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-
cy regulation or Federal statutory requirement under 
which the agency has supervisory or rulemaking authority 
with respect to the covered person or a financial innova-
tion the covered person offers 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 access to financial products 
or services; and 
(C) does not present systemic risk to the 
United States financial system and promotes 
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. 
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(d) SAFE HARBOR.— 
(1) IN GENERAL.—During the period after a 
covered person submits a petition under this section 
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 injunction to pro-
hibit a covered person from offering such financial 
innovation during the period described in paragraph 
(1). 
(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-
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 
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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. 
(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— 
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(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 rejects a pe-
tition, the agency head shall provide the covered per-
son with a written notice explaining the reason for 
rejecting the petition, including— 
(A) evidence that the covered person did 
not satisfy the requirements for establishing an 
alternative compliance strategy; 
(B) an identification of the rules or regula-
tions of the agency applicable to the covered 
person with respect to the financial innovation; 
and 
(C) a description of— 
(i) any beneficial effects, including an 
identification of persons likely to benefit, 
from rejecting the petition; 
(ii) any potential costs, including an 
identification of persons likely to bear the 
costs, of rejecting the petition; and 
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(iii) the baseline used by the agency to 
measure the likely economic consequences 
of rejecting the petition. 
(2) RESUBMITTAL.—Not later than 90 days 
after receiving a notice of disapproval, a covered per-
son may revise and resubmit a 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 title 5, United 
States Code (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 may enter into an en-
forceable compliance agreement with the agency, which 
shall include the terms under which the covered person 
may develop or offer the approved financial innovation to 
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the public and 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; 
(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 title 5, United 
States Code (commonly known as the ‘‘Administra-
tive Procedure Act’’); and 
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(7) procedures for maintaining the confiden-
tiality of any information disclosed to the agency in 
making the 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 may not commence an 
enforcement action against the covered person 
with respect to the financial innovation that is 
the subject of the enforceable compliance agree-
ment; 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 
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