[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1491 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 1491

To establish a FinTech Council to designate a single primary regulator 
   of eligible FinTech startups, to create the Offices of Financial 
                  Innovation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 2019

Mr. David Scott of Georgia (for himself and Mr. Loudermilk) introduced 
 the following bill; which was referred to the Committee on Financial 
Services, and in addition to the Committees on Agriculture, and Energy 
    and Commerce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To establish a FinTech Council to designate a single primary regulator 
   of eligible FinTech startups, to create the Offices of Financial 
                  Innovation, 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.

    This Act may be cited as the ``Facilitating Innovation and New 
Technology so Entrepreneurs Create and Hire Act of 2019'' or the 
``FINTECH Act of 2019''.

SEC. 2. FINTECH COUNCIL.

    (a) Establishment.--There is established within the Department of 
the Treasury the FinTech Council, which shall determine which Federal 
financial regulator or regulators should be the Designated Financial 
Regulator of an eligible FinTech startup.
    (b) Petition to Agency.--
            (1) In general.--An eligible FinTech startup may submit a 
        petition to the FinTech Council, in such form and in such 
        manner as the Council may require, to request a determination 
        on which Federal financial regulators have enforcement 
        authority with respect to the eligible FinTech startup.
            (2) Contents.--In a petition submitted under this 
        subsection, the eligible FinTech startup shall demonstrate that 
        the eligible FinTech startup is offering or intending to offer 
        a financial innovation that--
                    (A) will serve the public interest;
                    (B) improves access to financial products or 
                services;
                    (C) does not present systemic risk to the United 
                States financial system;
                    (D) is a new technology or is an innovative use of 
                existing technology;
                    (E) does not pose a risk to consumer protection; 
                and
                    (F) will not permit unfair, deceptive, or abusive 
                acts and practices.
            (3) Multiparty petitions.--One or more eligible FinTech 
        startups that offer or intend to offer similar financial 
        innovations may jointly submit a petition under this 
        subsection.
    (c) Determination.--Upon the request of an eligible FinTech 
startup, the FinTech Council shall--
            (1) determine which one or more Federal financial 
        regulators should be the regulators primarily responsible for 
        oversight of the eligible FinTech startup;
            (2) designate such agencies as the Designated Financial 
        Regulator of the eligible FinTech startup; and
            (3) notify the eligible FinTech startup and each Federal 
        financial regulator of such determination.
    (d) Sole Enforcement Authority by Designated Financial Regulator.--
Except for the Designated Financial Regulator, the Federal financial 
regulators may not take any enforcement action against an eligible 
FinTech startup.
    (e) Authority To Review Designation.--
            (1) In general.--With respect to an entity that has had 
        primary regulators designated under subsection (c)(2), the 
        FinTech Council may review the designation on an annual basis, 
        or pursuant to a request made under paragraph (2), to determine 
        whether--
                    (A) there has been a material change in the 
                business model of the entity;
                    (B) the entity is no longer an eligible FinTech 
                startup;
                    (C) there are material unseen risks that weren't 
                present at the time of the application; or
                    (D) the entity can no longer demonstrate that it 
                meets the requirements described under subsection 
                (b)(2).
            (2) Recommendation of review.--If a Federal financial 
        regulator determines that it would have, but for the 
        prohibition under subsection (d), taken an enforcement action 
        against an entity that has had primary regulators designated 
        under subsection (c)(2), the Federal financial regulator may 
        recommend that the FinTech Council review such designation 
        under paragraph (1).
            (3) Authority to rescind designation.--If, in reviewing a 
        designation under paragraph (1), the FinTech Council makes a 
        determination under subparagraph (A), (B), (C), or (D) of 
        paragraph (1), the FinTech Council may rescind the designation.
            (4) Reapplication permitted.--An eligible FinTech startup 
        that loses its designation under this section may reapply for 
        designation.
            (5) Notice.--If the FinTech Council rescinds a designation 
        under this section, the Council shall--
                    (A) immediately notify the entity that was the 
                subject of the designation and the Congress; and
                    (B) upon making a final determination, publicly 
                provide a written explanation of the basis for the 
                Council's decision with sufficient detail to provide 
                the public with an understanding of the specific basis 
                of the Council's determination, including any 
                assumptions related thereof.
    (f) Two-Year Limitation.--After the end of the two-year period 
beginning on the date an entity first has a primary regulatory 
designated under subsection (c)(2)--
            (1) any such designation is terminated; and
            (2) the entity is not eligible for any future designation 
        under subsection (c)(2).

SEC. 3. OFFICE OF FINANCIAL INNOVATION.

    (a) Establishment.--
            (1) In general.--Each Federal financial regulator shall 
        establish an Office of Financial Innovation (``Office'').
            (2) Director.--The head of each Office shall be a Director, 
        who shall be appointed to a 5-year term by, and report to, the 
        head of the Federal financial regulator.
            (3) Staffing.--The head of each Federal financial regulator 
        shall ensure that the regulator's Office is adequately staffed 
        at all times.
    (b) Duties.--The duties of the Office are to--
            (1) draft a mission statement, which shall include the 
        phrase ``responsible innovation'';
            (2) coordinate and make publicly available efforts made by 
        Designated Financial Regulators related to covered actions so 
        as to reduce the regulatory burden for eligible FinTech 
        startups;
            (3) establish and maintain an easily-accessible website, 
        which shall include the Office's mission statement and a portal 
        where eligible FinTech startups can submit questions or request 
        meetings with the Office;
            (4) respond to questions and meeting requests described 
        under paragraph (3) in a timely manner;
            (5) implement recommendations from the Advisory Council of 
        FinTech Directors;
            (6) conduct outreach to eligible FinTech startups when a 
        covered action is made public or finalized; and
            (7) provide support for the Director of the Office with 
        respect to the Director's duties on the Advisory Council of 
        FinTech Directors.
    (c) Inclusion in Rulemaking.--Each Federal financial regulator 
shall, throughout the development of a new rule, including prior to the 
publication of a notice of proposed rulemaking in the Federal Register, 
work with the Office in assessing the potential effects of the rule on 
eligible FinTech startups. Each Office shall also advise the applicable 
Federal financial regulator on possible alternatives that may lessen 
the burden on eligible FinTech startups without meaningfully affecting 
the rule's ability to achieve its purpose.

SEC. 4. REGULATORY HARMONIZATION FOR FINTECH.

    (a) Harmonization.--Each Designated Financial Regulator shall, in 
taking any covered action, harmonize and coordinate with the other 
Designated Financial Regulators in order to eliminate duplication and 
conflicting regulations that will impact eligible FinTech startups.
    (b) Advisory Council of FinTech Directors.--
            (1) Establishment.--
                    (A) In general.--There is established the Advisory 
                Council of FinTech Directors, which shall consist of--
                            (i) the Director of each Office of 
                        Financial Innovation; and
                            (ii) an independent member appointed by the 
                        Secretary of the Treasury, having State-banking 
                        regulatory expertise.
                    (B) Compensation.--All members of the Advisory 
                Council who are officers or employees of the United 
                States shall serve without compensation in addition to 
                that received for their services as officers or 
                employees of the United States.
            (2) Purpose.--The purpose of the Advisory Council is to 
        provide each Federal financial regulator with advice on its 
        rules, regulations, and policies with regard to how financial 
        innovation is reshaping the regulatory landscape of the 
        financial services marketplace and whether there is any 
        duplication in supervision or material failure in supervision 
        of eligible FinTech startups that is limiting responsible 
        innovation for eligible FinTech startups.
            (3) Duties.--The Advisory Council shall function solely as 
        an advisory body. Its duties shall extend only to providing 
        advice, including advice in the form of recommendations, to 
        each Federal financial regulator. Each Federal financial 
        regulator shall retain full authority to determine actions to 
        be taken and policies to be expressed with respect to matters 
        within its jurisdiction upon which the Council may provide 
        advice.
            (4) Reports.--
                    (A) Annual report.--The Advisory Council shall 
                annually report to Congress on the activities of the 
                Council and any significant financial market and 
                regulatory developments that might impact eligible 
                FinTech startups.
                    (B) Advice.--The Advisory Council shall provide its 
                advice to the Federal financial regulators through the 
                Secretary of the Treasury. The Advisory Council need 
                not reach consensus on every issue, and may choose to 
                provide the Federal financial regulators with differing 
                views or a range of view.
            (5) Meetings.--The Advisory Council of FinTech Directors 
        shall meet at the call of the Secretary of the Treasury or a 
        majority of the members then serving, but not less frequently 
        than annually.
            (6) Recordkeeping.--The official records generated by or 
        for the Advisory Council shall be handled in accordance with 
        General Records Schedule 6.2, or another approved agency 
        records disposition schedule. These records shall be available 
        for public inspection and copying, subject to section 552 of 
        title 5, United States Code (commonly known as the ``Freedom of 
        Information Act'').

SEC. 5. DEFINITIONS.

    For purposes of this Act:
            (1) Covered action.--The term ``covered action'' means any 
        regulations, guidance, interpretive rules, interim final rules, 
        bulletins, statement of policy, letters, examination manuals, 
        frequently asked questions, notices, directives, or any other 
        authoritative action that would impact an eligible FinTech 
        startup.
            (2) Designated financial regulator.--The term ``Designated 
        Financial Regulator'' means--
                    (A) any Federal financial regulator or regulators 
                that have been designated under section 2(c)(2) with 
                respect to any eligible FinTech startup; and
                    (B) with respect to an eligible FinTech startup, 
                the specific Federal financial regulator or regulators 
                designated under section 2(c)(2) for such eligible 
                FinTech startup.
            (3) Eligible fintech startup.--The term ``eligible FinTech 
        startup'' means an entity that--
                    (A) provides an application or product and has no 
                more than 10,000 total users of such application or 
                product;
                    (B) has no more than 15 employees;
                    (C) has received less than 5 rounds of venture 
                capital; and
                    (D) has not yet partnered with an insured 
                depository institution (as defined under section 3 of 
                the Federal Deposit Insurance Act).
            (4) Federal financial regulator.--The term ``Federal 
        financial regulator'' 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 Housing and Urban Development, the Department of 
        the Treasury, the Farm Credit Administration, the Federal 
        Communications Commission, the Federal Deposit Insurance 
        Corporation, the Federal Housing Finance Agency, the Federal 
        Trade Commission, the National Credit Union Administration 
        Board, the Office of the Comptroller of the Currency, and the 
        Securities and Exchange Commission.
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