IB 
Union Calendar No. 654 
118TH CONGRESS 
2D SESSION 
H. R. 7440 
[Report No. 118–792] 
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 
DECEMBER 4, 2024 
Additional sponsors: Mr. DONALDS and Mr. EMMER 
DECEMBER 4, 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 promote innovation in financial services, and for other 
purposes. 
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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 ‘‘Fi-
nancial 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. 
Sec. 8. Enforceable compliance agreement. 
Sec. 9. Report to Congress. 
SEC. 2. DEFINITIONS. 
In this Act, the following definitions shall apply: 
(1) AGENCY.—The term ‘‘agency’’ means each of 
the Board of Governors of the Federal Reserve System, 
the Bureau of Consumer Financial Protection, the 
Department of Housing and Urban Development, the 
Department of the Treasury, the Federal Deposit In-
surance Corporation, the Federal Housing Finance 
Agency, the National Credit Union Administration, 
the Office of the Comptroller of the Currency, and the 
Securities and Exchange Commission. 
(2) AGENCY
REGULATION.—The term ‘‘agency 
regulation’’ means— 
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(A) a rule (as defined in section 551 of title 
5, United States Code) issued by an agency; 
(B) guidance issued by an agency; or 
(C) a published, proposed, or interim rule, 
policy statement, directive, adjudication, or in-
terpretation of an agency. 
(3) BANK SECRECY ACT.—The term ‘‘Bank Se-
crecy Act’’ means— 
(A) section 21 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1829b); 
(B) chapter 2 of title I of Public Law 91– 
508 (12 U.S.C. 1951 et seq.); and 
(C) subchapter II of chapter 53 of title 31, 
United States Code. 
(4) ENFORCEABLE COMPLIANCE AGREEMENT.— 
The term ‘‘enforceable compliance agreement’’ 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 tech-
nology; and 
(B) that is or may be subject to an agency 
regulation or Federal statute. 
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(6) FSIO.—The term ‘‘FSIO’’ means a Finan-
cial Services Innovation Office established pursuant 
to section 4. 
(7) PERSON.—The term ‘‘person’’ means an in-
dividual, partnership, company, corporation, associa-
tion, trust, estate, cooperative organization, or other 
entity. 
SEC. 3. AGENCY IDENTIFICATION OF REGULATORY AREAS. 
Not later than 60 days after the date of the enactment 
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 regulation— 
(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 des-
ignate an office within the agency to be known as the ‘‘Fi-
nancial Services Innovation Office’’. Each such Financial 
Services Innovation Office shall promote financial innova-
tions and assist persons whose petitions are approved under 
section 7. 
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(b) ADMINISTRATION.—Each agency shall designate an 
individual to serve as the head of the agency’s FSIO. 
(c) DUTIES.— 
(1) GENERAL DUTIES.—The head of each agen-
cy’s FSIO shall— 
(A) support the development of financial in-
novations; 
(B) coordinate with FSIOs at other agencies 
to share information and data about financial 
innovations; 
(C) upon request, coordinate with relevant 
State regulatory entities to provide information 
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 regu-
latory 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 
person with an approved petition under section 7, the 
head of each agency’s FSIO shall— 
(A) work with the person to address issues 
of how existing regulatory frameworks of the 
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agency apply to the financial innovation that is 
the subject of the petition; 
(B) assist the person in complying with any 
requirements of the agency with respect to the fi-
nancial innovation; and 
(C) assist the person in responding to any 
challenges to a modification or a waiver granted 
under subsection (d). 
(d) WAIVER AUTHORITY.—The head of each agency, 
acting through the agency’s FSIO, may modify or waive 
the application of an agency regulation of the agency or 
a Federal statute under which the agency has rulemaking 
authority if— 
(1) a petition 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 person to offer the financial in-
novation 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-
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tions or assist persons in offering financial innova-
tions, and merge or transfer the operations of such of-
fices or programs into the FSIO. 
(2) TRANSFER OF AUTHORITY.—On the date that 
is 90 days after the establishment or designation of a 
FSIO at an agency, the administration of any rule, 
policy, or prior agency determinations relating to 
promoting financial innovations or assisting persons 
in offering financial innovations, including no-action 
letters and staff advisory opinions, shall be trans-
ferred 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 present testimony to the Congress and submit 
a report to the Congress and to the Financial Stability 
Oversight Council on the activities of the FSIO of such 
agency, including a description of the petitions considered, 
the rationale for acceptance or rejection of petitions, and 
the efforts of the FSIO to encourage financial innovations. 
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 es-
tablish a committee to be known as the ‘‘FSIO Liaison 
Committee’’. 
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(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 organization). 
(c) DUTIES.—The FSIO Liaison Committee shall— 
(1) consult on the administration, coordination, 
and oversight with the FSIO of each agency; 
(2) facilitate the cooperation of each FSIO to en-
sure that agencies share information and data on pe-
titions 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 mem-
bers. The Chair shall serve for a term of 2 years and 
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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 admin-
istrative units. 
(f) TESTIMONY.—Not later than 6 months after the 
date of the enactment of this Act, and annually thereafter, 
the Chair of the FSIO Liaison Committee shall present tes-
timony to the 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 between, 
and paid by, each agency. 
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SEC. 6. PETITION TO AGENCY. 
(a) IN GENERAL.—A 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 require, to re-
quest to enter into an enforceable compliance agreement 
containing a modification or waiver of an agency regula-
tion of the agency or the Federal statute under which the 
agency has rulemaking authority with respect to— 
(1) the person; or 
(2) a financial innovation the person offers or 
intends to offer. 
(b) CONTENTS.—In a petition submitted under this 
section, the person shall— 
(1) identify any requirement under which the 
agency has rulemaking authority or the agency regu-
lation of the agency for which the person is requesting 
a modification or waiver; 
(2) explain why such modification or waiver is 
essential to the operation of the person; 
(3) submit an alternative compliance strategy 
that proposes a method to comply with such require-
ment or agency regulation; 
(4) demonstrate that under the alternative com-
pliance strategy, the financial innovation— 
(A) would serve the public interest; 
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(B) improves consumer access to a financial 
product or service; 
(C) would not present a national security 
risk to the United States; 
(D) would meet the purposes of anti-money 
laundering and countering the financing of ter-
rorism obligations under the Bank Secrecy Act; 
(E) would not present systemic risk to the 
United States financial system; and 
(F) would promote consumer protection; 
(5) provide a detailed business plan; and 
(6) propose a date on which an enforceable com-
pliance agreement would terminate and explain why 
such termination date would be appropriate. 
(c) MULTIPARTY PETITIONS.—One or more persons 
that offer or intend to offer similar financial innovations 
may jointly submit a petition under this section. 
(d) NOTICE AND COMMENT.— 
(1) IN GENERAL.—Not later than 30 days after 
receiving a petition, the agency that receives the peti-
tion shall publish the petition in the Federal Register 
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 per-
son submitting the petition is similarly situated to 
another person that has been granted approval of a 
petition pursuant to section 7. 
(3) CONFIDENTIALITY.—The agency shall main-
tain the confidentiality of any nonpublicly available 
data or information in any petition submitted under 
this section. The agency shall give reasonable consid-
eration to maintaining the confidentiality of data or 
information identified by the person in the petition 
submitted under this section. 
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 90 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 person who submitted the petition, 
in writing, of the agency’s determination of the petition. 
(b) APPROVAL OF PETITION.— 
(1) IN GENERAL.—An agency shall approve a pe-
tition if the agency has determined that— 
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(A) the alternative compliance strategy pro-
posed by the person in the petition satisfies the 
requirements described in section 6(b)(4); and 
(B) the person who submitted the petition 
has, with respect to the financial innovation the 
person offers or intends to offer, sufficiently iden-
tified— 
(i) the regulations and Federal statutes 
of which the person is seeking waiver or 
modification; and 
(ii) other applicable regulations and 
Federal statutes with which the person in-
tends to comply. 
(2) NOTIFICATION TO STATE REGULATORY AGEN-
CIES.—If an agency approves a petition, the agency 
shall, with respect to each State regulatory agency 
with jurisdiction over the person who submitted the 
petition or the financial innovation about which the 
person submitted the petition— 
(A) notify such State regulatory agency that 
the agency has approved the petition; and 
(B) provide such State regulatory agency 
information about the terms of the enforceable 
compliance agreement entered into between the 
person and the agency. 
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(c) DISAPPROVAL OF PETITION.— 
(1) IN GENERAL.—An agency may disapprove a 
petition if the agency has determined that— 
(A) the alternative compliance strategy pro-
posed by the person in the petition does not sat-
isfy the requirements described in section 6(b)(4); 
or 
(B) the person who submitted the petition 
has not, with respect to the financial innovation 
the person offers or intends to offer, sufficiently 
identified— 
(i) the regulations and Federal statutes 
of which the person is seeking waiver or 
modification; and 
(ii) other applicable regulations and 
Federal statutes with which the person in-
tends to comply. 
(2) WRITTEN NOTICE REQUIRED.—If an agency 
disapproves a petition the agency shall provide the 
person who submitted the petition with a written no-
tice explaining the reason for such disapproval and 
such written notice shall include a description of— 
(A) any benefits of disapproving the peti-
tion, including an identification of persons likely 
to benefit from the disapproval of the petition; 
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(B) any costs, including potential costs, of 
disapproving the petition, including an identi-
fication of persons likely to bear the costs associ-
ated with the disapproval of the petition; and 
(C) the baseline used by the agency to deter-
mine the likely economic consequences of dis-
approving the petition. 
(d) RESUBMITTAL.—Receipt of a notice of disapproval 
of a petition under this subsection shall not preclude a per-
son from revising and resubmitting such petition to the 
agency under section 6. 
(e) JUDICIAL REVIEW.—A person may seek judicial re-
view of an agency’s determination on a petition in accord-
ance 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 person who submitted such petition 
shall enter into an enforceable compliance agreement with 
such agency, which shall include— 
(1) the terms under which the approved financial 
innovation may be developed or offered to the public; 
and 
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(2) any requirements of the person and such 
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 and not more than 3 years after the 
date on which the agreement is entered into; 
(5) procedures and standards for extending the 
termination date, including procedures and standards 
for evaluating the effectiveness of the agreement; and 
(6) procedures for maintaining the confiden-
tiality of any information disclosed to the agency 
during the process of drafting and entering into 
agreement. 
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(f) RULE OF CONSTRUCTION.—Nothing in this Act 
shall be construed to limit the ability of an agency to en-
force the requirements of an enforceable compliance agree-
ment entered into under this Act. 
SEC. 9. REPORT TO CONGRESS. 
Not later than 1 year after the date of the enactment 
of this Act, and annually thereafter, the Financial Stability 
Oversight Council shall submit to the Congress a report on 
the aggregate impact of enforceable compliance agreements 
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 agencies’ FSIOs have implemented to 
allow a financial innovation that is the subject of an 
enforceable compliance agreement to be offered; 
(3) strategies implemented to coordinate and fa-
cilitate cooperation among FSIOs; 
(4) the existing Federal laws, regulations, or 
practices that the Financial Stability Oversight 
Council identifies as the most burdensome to innova-
tion 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 fragmenta-
tion of agency regulations of financial products or 
services and recommendations for reducing, consoli-
dating, or eliminating such overlap or fragmentation. 
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Union Calendar No. 654 
118TH CONGRESS 
2D SESSION 
H. R. 7440 
[Report No. 118–792] 
A BILL 
To promote innovation in financial services, and for 
other purposes. 
DECEMBER 4, 2024 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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