[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8395 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 8395
To provide for the regulation of registered covered providers, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 21, 2026
Mrs. Kim (for herself and Mr. Liccardo) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To provide for the regulation of registered covered providers, 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 ``Payments Access and Consumer
Efficiency Act of 2026'' or the ``PACE Act of 2026''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Board.--The term ``Board of Governors'' means the Board
of Governors of the Federal Reserve System.
(2) Comptroller.--The term ``Comptroller'' means the
Comptroller of the Currency.
(3) Covered provider.--The term ``covered provider'' means
a person that provides payment services and--
(A) holds at least 40 active money transmitter
licenses issued in accordance with the laws of each
applicable State in which the applicant seeks to offer
such payment services;
(B) holds a depository institution (as defined in
section 3(c) of the Federal Deposit Insurance Act (12
U.S.C. 1813(c))) charter from the State in which the
applicant seeks to offer such payment services; or
(C) holds a State credit union (as defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752)) charter from the State in which the applicant
seeks to offer such payment services.
(4) Covered state regulator.--The term ``covered State
regulator'' means a State agency that has issued a charter or
license to a registered covered provider.
(5) Deposit.--The term ``deposit'' has the meaning given in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(6) Insured depository institution.--The term ``insured
depository institution'' has the meaning given in section 2 of
the GENIUS Act (12 U.S.C. 5901).
(7) Monetary value.--The term ``monetary value'' means a
medium of exchange.
(8) Outstanding payment obligations.--The term
``outstanding payment obligations'' means the amount of payment
service obligations incurred by a registered covered provider
but not yet paid.
(9) Payment instrument.--The term ``payment instrument''
means a physical or electronic check, draft, money order,
traveler's check, or card or other means of access to an
account or other instrument for the transmission or payment of
monetary value. The term does not include stored value.
(10) Payment service.--The term ``payment service''--
(A) means--
(i) receiving monetary value for
transmission or transmitting monetary value;
(ii) receiving monetary value from a payor
on behalf of a payee for goods or services
provided by the payee;
(iii) selling or issuing stored value;
(iv) selling or issuing payment
instruments; and
(v) providing access or custody services
with respect to monetary value; and
(B) does not include the provision solely of online
or telecommunications services or network access.
(11) Payments reserve account.--The term ``payments reserve
account'' means an account held at a Federal reserve bank that
includes access to Fedwire Funds Service, FedNow Service, and
FedACH Services (including access to necessary relevant
contingent services, as determined by the Board of Governors of
the Federal Reserve System).
(12) Registered covered provider.--The term ``registered
covered provider'' means a covered provider that has registered
with the Comptroller in accordance with the requirements of
this Act.
(13) State.--The term ``State'' means each State of the
United States, the District of Columbia, and each territory or
possession of the United States.
(14) Stored value.--The term ``stored value'' has the
meaning given in section 1002(28) of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5481(28)).
SEC. 3. FEDERAL REGISTRATION OF ELIGIBLE STATE PAYMENT SERVICE
PROVIDERS.
(a) Registration of Payment Service Providers.--
(1) Registration.--A covered provider may submit an
application to register with the Comptroller to become a
registered covered provider.
(2) Evaluation.--The Comptroller shall evaluate an
application received under paragraph (1) using only the factors
specified under paragraph (3).
(3) Factors.--The factors specified in this paragraph are
the following:
(A) The applicant is limited to engaging in
activities that directly support or are incidental to
the provision of payment services.
(B) The applicant is able to meet the requirements
of sections 4 and 5.
(C) The applicant has adequate financial resources,
managerial or technical expertise, and a governance
system tailored to the business model and risk profile
of the covered provider.
(D) The applicant is able to comply with the
requirements of the Bank Secrecy Act (as defined in
section 2 of the GENIUS Act (12 U.S.C. 5901)).
(E) The applicant demonstrates benefit to the
public, including with respect to innovation,
competition, and enabling widespread access and use of
payment services.
(F) The applicant is not a designated financial
market utility (as defined in section 803(4) of the
Payment, Clearing, and Settlement Supervision Act of
2010 (12 U.S.C. 5462(4))).
(4) Holders of money transmitter licenses.--A covered
provider described in section 2(3)(A) that becomes a registered
covered provider under this Act may provide payment services in
any State.
(b) Timing for Decision; Grounds for Denial.--
(1) Initial applications.--With respect to an application
under subsection (a) received during the 180-day period
beginning on the date of the enactment of this Act, the
Comptroller shall notify each applicant, not later than 180
days after the receipt of such application--
(A) that the application is complete; or
(B) that the application is incomplete and the
specific information required for the application to be
considered complete.
(2) Extension.--The Comptroller may extend the period
described in paragraph (1) by an additional 60 days.
(3) Subsequent applications.--With respect to an
application received after the end of the period described in
paragraph (1) (including any extension made under paragraph
(2)), the Comptroller shall provide the notification required
under such paragraph to each applicant not later than 30 days
after receiving such application.
(4) Decision.--Not later than 180 days after notifying the
applicant that an application is complete, the Comptroller
shall notify the applicant of whether the Comptroller approved
or denied such application. If the Comptroller fails to submit
a notification with such 180-day period, such application shall
be deemed to be approved.
(5) Denial.--
(A) Grounds for denial.--The Comptroller may deny a
complete application received under subsection (a) only
if the Comptroller determines the factors described in
subsection (a)(3) are not satisfied.
(B) Explanation required.--The Comptroller shall
provide each applicant of a complete application that
was denied a written notice explaining such denial,
including all findings made by the Comptroller with
respect to the factors described in subsection (a)(3).
(c) Revocation.--The Comptroller shall establish, by rule, a
process by which the Comptroller may review and revoke a registration
granted under this section to a covered provider if the Comptroller
determines the factors described in subsection (a)(3) are not
satisfied. Such process shall include a process for providing notice to
the covered provider and a process for review of the decision to revoke
a registration.
SEC. 4. CUSTOMER PROTECTION STANDARDS.
(a) Reserve Standards.--
(1) In general.--A registered covered provider shall
maintain identifiable reserves backing outstanding payment
obligations on at least a 1 to 1 basis, with reserves
comprising--
(A) United States coins and currency (including
Federal Reserve notes) or money standing to the credit
of an account with a Federal Reserve Bank;
(B) funds held as demand deposits (or other
deposits that may be withdrawn upon request at any
time) or insured shares at an insured depository
institution (including any foreign branches or agents,
including correspondent banks, of an insured depository
institution), subject to limitations established by the
Corporation and the National Credit Union
Administration, as applicable, to address safety and
soundness risks of such insured depository institution;
(C) funds in transit to the registered covered
provider that are owed by an insured depository
institution or another registered covered provider,
including funds from the automated clearinghouse system
or funds receivable from a payment instrument;
(D) Treasury bills, notes, or bonds--
(i) with a remaining maturity of 93 days or
less; or
(ii) issued with a maturity of 93 days or
less;
(E) money received under repurchase agreements,
with the registered covered provider acting as a seller
of securities and with an overnight maturity, that are
backed by Treasury bills with a maturity of 93 days or
less;
(F) reverse repurchase agreements, with the
registered covered provider acting as a purchaser of
securities and with an overnight maturity, that are
collateralized by Treasury notes, bills, or bonds on an
overnight basis, subject to overcollateralization in
line with standard market terms, that are--
(i) tri-party;
(ii) centrally cleared through a clearing
agency registered with the Securities and
Exchange Commission; or
(iii) bilateral with a counterparty that
the issuer has determined to be adequately
creditworthy even in the event of severe market
stress;
(G) securities issued by an investment company
registered under section 8(a) of the Investment Company
Act of 1940 (15 U.S.C. 80a-8(a)), or other registered
Government money market fund, and that are invested
solely in underlying assets described in subparagraphs
(A) through (F);
(H) any other similarly liquid Federal Government-
issued asset approved by the Comptroller; or
(I) any reserve described in subparagraphs (A)
through (D) or subparagraphs (G) through (H) in
tokenized form, provided that such reserves comply with
all applicable laws and regulations.
(2) Prohibition on rehypothecation.--Reserves described
under paragraph (1) may not be pledged, rehypothecated, or
reused, except for the purposes described in section 4(a)(2) of
the GENIUS Act (12 U.S.C. 5903(a)(2)).
(3) Segregation requirement for access or custody
services.--A registered covered provider providing access or
custody services for monetary value shall segregate and
separately account for such monetary value and may not
commingle such monetary value with the assets of such provider.
(b) Recordkeeping Standards.--
(1) In general.--A registered covered provider shall
maintain records of--
(A) outstanding payment obligations of the provider
with respect to each customer of the provider; and
(B) reserves held pursuant to subsection (a).
(2) Access or custody services.--A registered covered
provider that provides access or custody services for monetary
value shall maintain beneficial ownership records with respect
to each applicable account and customer.
SEC. 5. RISK MANAGEMENT STANDARDS AND FAIR ACCESS.
(a) In General.--The Comptroller shall ensure that a registered
covered provider shall be subject to the capital, liquidity, and risk
management regulations issued pursuant to section 4(a)(4) of the GENIUS
Act (12 U.S.C. 5903(a)(4)) in a similar manner that such regulations
apply to a permitted payment stablecoin issuer (as defined in section 2
of such Act (12 U.S.C. 5901)), where such regulations are tailored to
the business model and risk profile of the registered covered provider.
(b) Fair Access Obligation.--A registered covered provider--
(1) shall be subject to the requirements of the Equal
Credit Opportunity Act (15 U.S.C. 1691 et seq.) in the same
manner as a creditor under such Act;
(2) may not deny access to payment services to an
individual because of the individual's constitutionally or
statutorily protected beliefs, affiliations, or political
views;
(3) may not cancel a payment services account of an
individual as a tool to inhibit such beliefs, affiliations, or
political views; and
(4) shall make all business decisions with respect to the
provision of payment services on the basis of individualized,
objective, and risk-based analyses.
SEC. 6. EXAMINATIONS, CONTRACTED SERVICES, AND ENFORCEMENT.
(a) In General.--The Comptroller may make examinations of a
registered covered provider with respect to the following:
(1) The nature of the operations and financial condition of
the registered covered provider.
(2) The financial, operational, and other risks that may
pose a threat to--
(A) the safety and soundness of the registered
covered provider; or
(B) the stability of the financial system of the
United States.
(3) The systems of the registered covered provider for
monitoring and controlling the risks described in paragraph
(2).
(4) The compliance of the registered covered provider with
the requirements of Federal consumer financial law (as defined
in section 1002 of Consumer Financial Protection Act of 2010
(12 U.S.C. 5481)), including by--
(A) obtaining information about the activities and
compliance systems or procedures of such provider; and
(B) detecting and assessing risks to consumers and
to markets for consumer financial products and services
(as defined in such section 1002).
(b) Contracted Services.--
(1) In general.--Whenever a registered covered provider
relies on or contracts for any services or activities that are
directly related to and are critical to the provision of
payment services by the registered covered provider--
(A) the person that performs such services or
activities shall be subject to regulation and
supervision by the Comptroller to the same extent as if
such services were being performed by the registered
covered provider; and
(B) the registered covered provider shall notify
the Comptroller of any relationship between the
provider and the person that performs such services or
activities not later than 30 days after the date which
is the earlier of the date on which--
(i) such provider and such person enter
into a contract for provision of such services
or activities; or
(ii) such person begins performance of such
service or activity.
(c) Enforcement.--The Comptroller may enforce the requirements of
sections 4 and 5 of this Act against a registered covered provider and
take such actions against such provider as permitted under section 8 of
the Federal Deposit Insurance Act (12 U.S.C. 1818), as if such provider
was an insured depository institution.
SEC. 7. REPORTS.
(a) Submission of Reports.--At the frequency established by the
Comptroller, a registered provider shall submit to the Comptroller a
report relating to--
(1) the financial condition of the registered covered
provider;
(2) compliance by the registered covered provider with the
requirements of this Act and other applicable laws relating to
the provision of payment services; and
(3) any other information the Comptroller may reasonably
require with respect to the registered covered provider and the
scope of the provision of payment services of such provider.
(b) Existing Reports.--To comply with the requirements of this
section, the Comptroller shall, to the maximum extent practicable, use
existing reports and other supervisory information and avoid
duplication of examination activities, reporting requirements, and
requests for information.
SEC. 8. PRIORITY FOR CUSTOMERS OF REGISTERED COVERED PROVIDERS.
(a) Nonbank Provider Defined.--In this section, the term ``nonbank
provider'' means a registered covered provider that is not an insured
depository institution (as defined in section 2 of the GENIUS Act (12
U.S.C. 5901)).
(b) Exclusion From Bankruptcy.--A nonbank provider shall not be
treated as a debtor for purposes of chapter 7 or chapter 11 of title
11, United States Code.
(c) Insolvency Standards.--
(1) In general.--A nonbank provider shall be eligible to be
subject to an insolvency proceeding administered by a covered
State regulator.
(2) Appointment.--Notwithstanding any other provision of
Federal law or the law of any State, the Comptroller may be
appointed by the covered State regulator to act as conservator
or receiver for such a nonbank provider, pursuant to such rules
issued by the Comptroller.
(3) Backup authority.--If, with respect to an insolvent
nonbank provider, a State does not promptly initiate an
insolvency proceeding beginning on the date the nonbank
provider becomes insolvent, the Comptroller shall initiate such
insolvency proceeding. For purposes of this paragraph, the
Comptroller shall issue such rules as necessary to define
``promptly''.
(d) Priority.--To the extent that a customer may hold balances with
a nonbank provider, amounts realized from the liquidation or other
resolution of the nonbank provider by the covered State regulator or
the Comptroller (whichever is acting as a conservator or receiver under
this section) shall be distributed to pay claims (other than secured
claims to the extent of any such security) in the following order of
priority:
(1) Administrative expenses of the conservator or receiver.
(2) Outstanding payment obligations to customers.
(3) Any other general or senior liability of the nonbank
provider.
(4) Any obligation subordinated to liabilities described in
paragraphs (2) and (3) not described in paragraph (5).
(5) Any obligation to shareholders or members of the
nonbank provider arising as a result of their status as
shareholders or members.
(e) Custodial Assets.--Monetary value maintained in connection with
access or custody services, properly segregated from the nonbank
provider's proprietary assets, are not general assets of the nonbank
provider subject to the priority set forth in subsection (d). Any
shortfall in custodial assets shall have the same priority as
outstanding payment obligations to customers under subsection (d)(2).
(f) Additional Powers.--In addition to and not in derogation of the
powers conferred and the duties imposed by this Act on the Comptroller
or a State as conservator or receiver of a nonbank provider, the
Comptroller or State, as applicable, shall have such additional powers
and duties with respect to the nonbank provider as imposed on a
conservator or receiver of an insured depository institution under any
other provision of law.
SEC. 9. ACCESS TO PAYMENTS RESERVE ACCOUNTS.
(a) Access.--To obtain access to a payments reserve account in the
same manner and to the same extent as such access would be granted to
an insured depository institution, a registered covered provider may
submit a request to the Board of Governors for such access.
(b) Approval.--The Board of Governors shall approve or deny such a
request not later than 120 days after receipt of such request, which
period may be extended by an additional 60 days. If the Board of
Governors fails to act on such a request within such period, the
request shall be deemed to be approved.
(c) Enforcement Authority in Unusual and Exigent Circumstances.--
(1) In general.--In unusual and exigent circumstances, the
Board of Governors may issue a directive that has the effect of
a cease and desist order against a registered covered provider
that uses a payments reserve account for purposes of
noncompliance with requirements of sections 4 and 5 of this
Act, if the Board of Governors submits a written notice to the
covered State regulator and the Comptroller not less than 48
hours before issuing such directive.
(2) Unusual and exigent circumstances defined.--Not later
than 180 days after the date of the enactment of this Act and
in consultation with the Conference of State Bank Supervisors,
the Board of Governors shall issue rules to define the term
``unusual and exigent circumstances'' for purposes of paragraph
(1).
(3) Review.--
(A) Administrative review.--
(i) In general.--After a directive
described in paragraph (1) has been issued with
respect to a registered covered provider, such
registered covered provider may object and
present to the Board of Governors, in writing,
the reasons why the directive should be
modified or rescinded.
(ii) Automatic lapse of directive.--If, not
later than 10 days after the receipt of a
response described in clause (i), the Board of
Governors does not affirm, modify, or rescind
the directive, the directive shall
automatically lapse.
(B) Judicial review.--
(i) In general.--If the Board of Governors
affirms or modifies a directive pursuant to
subparagraph (A), any affected party may
immediately thereafter petition the United
States district court for the district in which
the main office of the affected party is
located, or in the United States District Court
for the District of Columbia, to stay, modify,
terminate, or set aside the directive.
(ii) Relief for extraordinary cause.--Upon
a showing of extraordinary cause, an affected
party may petition for relief under clause (i)
without first pursuing or exhausting the
administrative review under subparagraph (A).
SEC. 10. EFFECT ON SECURITIES LAWS.
(a) Investment Advisors Act of 1940.--Section 202(a)(18) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by
adding at the end the following: ``The term `security' does not include
a balance with a registered covered provider, as such term is defined
in section 2 of the PACE Act of 2026.''.
(b) Investment Company Act of 1940.--Section 2(a)(36) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(36)) is amended by
adding at the end the following: ``The term `security' does not include
a balance with a registered covered provider, as such term is defined
in section 2 of the PACE Act of 2026.''.
(c) Securities Act of 1933.--Section 2(a)(1) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at the end the
following: ``The term `security' does not include a balance with a
registered covered provider, as such term is defined in section 2 of
the PACE Act of 2026.''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `security' does not include
a balance with a registered covered provider, as such term is defined
in section 2 of the PACE Act of 2026.''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `security' does
not include a balance with a registered covered provider, as such term
is defined in section 2 of the PACE Act of 2026.''.
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