What This Bill Does
This bill updates the Bank Service Company Act to improve how federal banking agencies work with state banking agencies. The bill adds state banking agencies to the examination and coordination process for bank service companies, which are companies that provide services to banks.
Who It Affects
State banking agencies (agencies that supervise banks at the state level)
Federal banking agencies (agencies that supervise banks at the federal level)
Bank service companies (companies that provide services to banks)
State banks that own or are part owners of bank service companies
Key Provisions
The bill defines "State banking agency" to mean the same thing as "State Bank Supervisor" as defined in the Federal Deposit Insurance Act (Sec. 2(1)(C))
Federal banking agencies must consult with state banking agencies when examining bank service companies and must provide reasonable notice before exams begin (Sec. 2(3)(D))
Federal and state agencies can share information obtained from examining bank service companies to the same extent they can share information about banks (Sec. 2(3)(D))
Federal banking agencies must work with state banking agencies to avoid duplicating (repeating) examination activities, reporting requirements and information requests (Sec. 2(3)(D))
State banking agencies cannot examine bank service companies unless state law gives them that authority (Sec. 2(3)(F))
What Changes
State banking agencies now have a formal role in the examination process for bank service companies instead of being excluded from it.
Federal banking agencies must notify state agencies before examining bank service companies and must coordinate with them to avoid asking for the same information twice.
Information from bank service company exams can now be shared between federal and state agencies more easily.
Important Definitions
State banking agency: means the same thing as "State Bank Supervisor" under federal deposit insurance law
Effective Date
Not specified in bill text
IB
Union Calendar No. 234
118TH CONGRESS
1ST SESSION H. R. 1109
[Report No. 118–290]
To amend the Bank Service Company Act to provide improvements with
respect to State banking agencies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 21, 2023
Mr. WILLIAMS of Texas (for himself, Mr. MEEKS, and Mr. HILL) introduced
the following bill; which was referred to the Committee on Financial Services
DECEMBER 1, 2023
Additional sponsors: Mr. CASE and Mr. LAWLER
DECEMBER 1, 2023
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 21, 2023]
VerDate Sep 11 2014
23:19 Dec 01, 2023
Jkt 049200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6652
E:\BILLS\H1109.RH
H1109
kjohnson on DSK7ZCZBW3PROD with $$_JOB
2
•HR 1109 RH
A BILL
To amend the Bank Service Company Act to provide im-
provements with respect to State banking agencies, and
for other purposes.
VerDate Sep 11 2014
23:19 Dec 01, 2023
Jkt 049200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6652
E:\BILLS\H1109.RH
H1109
kjohnson on DSK7ZCZBW3PROD with $$_JOB
3
•HR 1109 RH
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Bank Service Company
4
Examination Coordination Act of 2023’’.
5
SEC. 2. BANK SERVICE COMPANY ACT IMPROVEMENTS.
6
The Bank Service Company Act (12 U.S.C. 1861 et
7
seq.) is amended—
8
(1) in section 1(b)—
9
(A) in paragraph (8), by striking ‘‘and’’ at
10
the end;
11
(B) by redesignating paragraph (9) as
12
paragraph (10); and
13
(C) by inserting after paragraph (8) the fol-
14
lowing:
15
‘‘(9) the term ‘State banking agency’ shall have
16
the same meaning given the term ‘State Bank Super-
17
visor’ under section 3 of the Federal Deposit Insur-
18
ance Act; and’’;
19
(2) in section 5(a), by inserting ‘‘, in consulta-
20
tion with the State banking agency,’’ after ‘‘banking
21
agency’’; and
22
(3) in section 7—
23
(A) in subsection (a)—
24
VerDate Sep 11 2014
23:19 Dec 01, 2023
Jkt 049200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6203
E:\BILLS\H1109.RH
H1109
kjohnson on DSK7ZCZBW3PROD with $$_JOB
4
•HR 1109 RH
(i) in the first sentence, by inserting
1
‘‘or State banking agency’’ after ‘‘appro-
2
priate Federal banking agency’’; and
3
(ii) in the second sentence, by striking
4
‘‘Federal banking agency that supervises
5
any other shareholder or member’’ and in-
6
serting ‘‘Federal or State banking agency
7
that supervises any other shareholder or
8
member’’;
9
(B) in subsection (c)—
10
(i) by inserting ‘‘or a State banking
11
agency’’ after ‘‘appropriate Federal banking
12
agency’’; and
13
(ii) by striking ‘‘such agency’’ each
14
place such term appears and inserting
15
‘‘such Federal or State agency’’;
16
(C) by redesignating subsection (d) as sub-
17
section (f);
18
(D) by inserting after subsection (c) the fol-
19
lowing:
20
‘‘(d) AVAILABILITY
OF INFORMATION.—Information
21
obtained pursuant to the regulation and examination of
22
service providers under this section or applicable State law
23
may be furnished by and accessible to Federal and State
24
agencies to the same extent that supervisory information
25
VerDate Sep 11 2014
23:19 Dec 01, 2023
Jkt 049200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6203
E:\BILLS\H1109.RH
H1109
kjohnson on DSK7ZCZBW3PROD with $$_JOB
5
•HR 1109 RH
concerning depository institutions is authorized to be fur-
1
nished to and required to be accessible by Federal and State
2
agencies under section 7(a)(2) of the Federal Deposit Insur-
3
ance Act (12 U.S.C. 1817(a)(2)) or State law, as applicable.
4
‘‘(e) COORDINATION WITH STATE BANKING AGEN-
5
CIES.—Where a State bank is principal shareholder or
6
principal member of a bank service company or where a
7
State bank is any other shareholder or member of the bank
8
service company, the appropriate Federal banking agency,
9
in carrying out examinations authorized by this section,
10
shall—
11
‘‘(1) provide reasonable and timely notice to the
12
State banking agency; and
13
‘‘(2) to the fullest extent possible, coordinate and
14
avoid duplication of examination activities, reporting
15
requirements, and requests for information.’’;
16
(E) in subsection (f), as so redesignated, by
17
inserting ‘‘, in consultation with State banking
18
agencies,’’ after ‘‘appropriate Federal banking
19
agencies’’; and
20
(F) by adding at the end the following:
21
‘‘(g) RULE OF CONSTRUCTION.—Nothing in this sec-
22
tion shall be construed as granting authority for a State
23
banking agency to examine a bank service company where
24
no such authority exists in State law.’’.
25
VerDate Sep 11 2014
23:19 Dec 01, 2023
Jkt 049200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6203
E:\BILLS\H1109.RH
H1109
kjohnson on DSK7ZCZBW3PROD with $$_JOB
Union Calendar No. 234
118TH CONGRESS
1ST SESSION
H. R. 1109
[Report No. 118–290]
A BILL
To amend the Bank Service Company Act to pro-
vide improvements with respect to State banking
agencies, and for other purposes.
DECEMBER 1, 2023
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed
VerDate Sep 11 2014
23:19 Dec 01, 2023
Jkt 049200
PO 00000
Frm 00006
Fmt 6651
Sfmt 6651
E:\BILLS\H1109.RH
H1109
kjohnson on DSK7ZCZBW3PROD with $$_JOB