Financial Services Innovation Act of 2022
Bill: H.R.9556 | Sponsor: Rep. McHenry, Patrick T. (R-NC)
Policy area: Finance and Financial Sector

Summary:
Financial Services Innovation Act of 2022
This bill addresses the regulation of financial products and services. Specifically, the bill allows persons intending to offer a financial innovation to petition specified financial regulatory agencies regarding existing areas of regulation. A petitioner may request a modification or waiver of an agency regulation. The bill sets forth requirements regarding the petition process, a safe harbor for petitioners from enforcement, and enforceable compliance agreements. Agencies must biannually publish a list of financial regulatory areas the agency would consider modifying or waiving through the petition process.
The bill also establishes Financial Services Innovation Offices at these agencies to assist petitioners. These offices must also generally support the development of financial innovations and coordinate with other offices to share data.

To promote innovation in financial services, and for other purposes.

    Be it enacted by the Senate and House of Representatives 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 2022''.
    (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.
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 agency;
                    (B) guidance issued by an agency; or
                    (C) a published proposed or interim rule, policy 
                statement, directive, adjudication, or interpretation 
                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 Protection, the Commodity Futures Trading Commission, 
        the Department of the Treasury, the Federal 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 to a Financial Services Innovation 
        Office at one or more agencies.
            (4) Enforceable compliance agreement.--The term 
        ``enforceable compliance agreement'' means a contractual 
        agreement described under section 8.
            (5) Financial innovation.--The term ``financial 
        innovation'' means an innovative financial service 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 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 regulation--
            (1) that apply or may apply to a financial innovation; 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 OF FSIO AT AGENCIES.

    (a) In General.--Each agency shall establish a Financial Services 
Innovation Office (known as ``FSIO'') to promote financial innovations 
and to assist a covered person whose petition has been approved under 
section 7.
    (b) Director.--Each agency shall appoint an individual 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 agencies 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--
                    (A) work with the covered person to address issues 
                of how existing regulatory frameworks 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 unduly burdensome to the covered person, the 
agency shall, acting through the agency's FSIO, modify 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 establishment of a FSIO at an agency, the 
agency shall modify any offices or programs at the agency that promote 
financial innovations or assist covered persons in developing financial 
innovations to operate within the FSIO. Any legal 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 Financial Stability Oversight 
Council, and shall present testimony to Congress, on the activities of 
the FSIO, 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.
    (g) Sunset.--If an agency has not received a petition 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 enforceable 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 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 developments related 
        to financial innovations;
            (4) encourage the application of uniform principles 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 years and thereafter the chairmanship 
        shall rotate among the members of the committee.
            (2) Powers of the chair.--The Chair is authorized to carry 
        out the internal administration of the FSIO Liaison Committee, 
        including the appointment and supervision of employees and the 
        distribution of tasks among members, employees, and 
        administrative 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 member of the FSIO 
        Liaison Committee shall serve without 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 expenses of the FSIO 
        Liaison Committee, including the salaries of employees, shall 
        be split equally between, and paid by, each agency other than 
        an agency 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 require, to request to enter into an enforceable 
compliance agreement containing a modification or waiver of an agency 
regulation or Federal statutory requirement under which the agency has 
supervisory or rulemaking authority with respect to the covered person 
or a financial innovation 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 compliance 
        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 innovations 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 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 
        innovation that was the subject of the petition.
            (2) Injunctive relief.--If an agency determines that a 
        financial innovation described under paragraph (1) presents an 
        immediate danger to consumers or presents systemic risk to the 
        United States financial system, the agency may apply to a court 
        of competent jurisdiction for injunction to prohibit 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 petition 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 period.--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 available 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 
        nonpublicly 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 covered person meets the 
requirements for establishing an alternative compliance strategy, the 
agency shall--
            (1) approve the petition; and
            (2) enter into an enforceable compliance agreement with the 
        covered person in accordance with the requirements of section 
        8.
    (c) Disapproval.--
            (1) Explanation.--If the agency rejects a petition, the 
        agency head shall provide the covered person 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 regulations 
                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
                            (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 person may revise and resubmit 
        a petition to the agency under section 6.
    (d) Moratorium.--If an agency disapproves a petition submitted in 
good faith under this section, the agency shall provide the covered 
person notice and a reasonable amount of time before the agency takes 
an enforcement action against the covered person relating to the 
financial innovation 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 enforceable compliance agreement 
with the agency, which shall include the terms under which the covered 
person may develop or offer the approved financial innovation to 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 establish 
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 annually;
            (4) a termination date for the agreement that is at least 1 
        year after the date on which the agreement 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 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''); and
            (7) procedures for maintaining the confidentiality 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 compliance 
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 agreement--
                    (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 agreement; and
                    (B) a State may not commence an enforcement action 
                against the covered person with respect to the 
                financial innovation that is the subject of the 
                enforceable compliance agreement, if the covered person 
                provides the State with--
                            (i) the enforcement compliance agreement; 
                        and
                            (ii) a statement of policies and procedures 
                        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 covered 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 determines that the agency's action was 
        arbitrary and capricious and the financial innovation has 
        substantially harmed consumers within such State.
    (e) Arbitration.--A covered person may elect to arbitrate any 
action initiated by another person relating to 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 Stability Oversight Council 
shall submit to 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 agreements;
            (2) the most innovative and least burdensome tools that the 
        agency's FSIO has implemented for achieving regulatory ends;
            (3) strategies implemented to coordinate and facilitate 
        interagency cooperation among agency FSIOs;
            (4) the existing Federal and State laws, regulations, or 
        practices (including guidance materials, examinations, and 
        enforcement proceedings and settlements) that the Financial 
        Stability Oversight Council identifies as the most burdensome 
        to innovation in developing or providing financial products and 
        services, that adversely affect competition in the financial 
        services industry, or that restrict improvements for consumers 
        of financial products or services; and
            (5) an identification of the overlap or fragmentation of 
        regulation of financial products or services and 
        recommendations for reducing, consolidating, or eliminating 
        such overlap or fragmentation.

SEC. 10. FUNDING.

    The costs of carrying out the requirements of this Act (except as 
specified in section 5(g)) shall be split equally between, and paid by, 
each agency for fiscal years 2023 through 2027.
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