To require the Board of Governors of the Federal Reserve System to carry out a quantitative impact study of any proposed real-time payment system under the Faster Payments Initiative before implementing such system.

I 116TH CONGRESS 1ST SESSION H. R. 3939 To require the Board of Governors of the Federal Reserve System to carry out a quantitative impact study of any proposed real-time payment sys- tem under the Faster Payments Initiative before implementing such system. IN THE HOUSE OF REPRESENTATIVES JULY 24, 2019 Mr. BUDD introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the Board of Governors of the Federal Reserve System to carry out a quantitative impact study of any proposed real-time payment system under the Faster Payments Initiative before implementing such system. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. QUANTITATIVE IMPACT STUDY REQUIREMENT. 3 (a) IN GENERAL.—The Board of Governors of the 4 Federal Reserve System may not take any steps to de- 5 velop, build, or otherwise implement any proposed real- 6 time payment system or any component thereof (including 7 a settlement service, liquidity management service, or aux- 8 VerDate Sep 11 2014 16:43 Aug 04, 2019 Jkt 034408 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3939.IH H3939 Pbinns on DSK79D2C42PROD with BILLS 2 •HR 3939 IH iliary services) under the Faster Payments Initiative until 1 after the end of the 1-year period beginning on the date 2 that the Board of Governors issues a detailed report to 3 the Congress on a comprehensive study of the proposed 4 real-time payment system that includes a quantitative im- 5 pact component. 6 (b) CONTENTS OF STUDY.—The study described 7 under subsection (a) shall include the following: 8 (1) Any cybersecurity, privacy concerns, or 9 other risks associated with the Federal government 10 receiving and managing new transaction-level infor- 11 mation regarding millions of American citizens, in- 12 cluding a threat assessment. 13 (2) Whether the Board of Governors would be 14 subject to privacy and security laws and regulations 15 such as the Fair Credit Reporting Act and the 16 Gramm-Leach-Bliley Act, like other payment proc- 17 essors. 18 (3) Where customer information would be 19 stored. 20 (4) Who would oversee such information. 21 (5) Whether the Board of Governors would cre- 22 ate a database to view customer transactions. 23 (6) An analysis of whether the private sector 24 can provide the system or achieve the objectives of 25 VerDate Sep 11 2014 16:43 Aug 04, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3939.IH H3939 Pbinns on DSK79D2C42PROD with BILLS 3 •HR 3939 IH the system with reasonable effectiveness, scope, and 1 equity. 2 (7) Whether the Board of Governors has con- 3 cluded that the private sector cannot achieve the ob- 4 jectives that the Board of Governors seeks to achieve 5 with the system. 6 (8) The potential adverse consequences to the 7 private sector in the short term and the long if the 8 Board of Governors offers the system. 9 (9) Whether the Board of Governors could 10 achieve the Board’s objectives without offering the 11 system, but rather by making changes to its current 12 infrastructure, for example by expanding the oper- 13 ating hours of the National Settlement Service or 14 enhancing the Automated Clearing House’s same- 15 day payment capabilities or modernizing the Auto- 16 mated Clearing House to serve as a backup to the 17 existing operating network. 18 (10) How the Board of Governors would col- 19 laborate with the private sector to ensure interoper- 20 ability. 21 (11) As a regulator of depository institutions 22 and their holding companies, how the Board of Gov- 23 ernors would ensure that the Board does not exert 24 VerDate Sep 11 2014 16:43 Aug 04, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3939.IH H3939 Pbinns on DSK79D2C42PROD with BILLS 4 •HR 3939 IH undue influence over such institutions and holding 1 companies to use the system. 2 (12) How the Board of Governors would ensure 3 that the system would be available to all depository 4 institutions, including community banks, and credit 5 unions, in a manner that is not cost prohibitive. 6 (13) The estimate of the Board of Governors 7 for— 8 (A) how long it would take to build the in- 9 frastructure and begin operation of the system; 10 (B) how much the system would cost; 11 (C) the annual operating cost of the sys- 12 tem; and 13 (D) how long it would take for the Board 14 to recover the costs of building the system. 15 (14) A study of the quantitative impact of each 16 of the factors in paragraphs (1) through (13), as ap- 17 plicable. 18 Æ VerDate Sep 11 2014 16:43 Aug 04, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H3939.IH H3939 Pbinns on DSK79D2C42PROD with BILLS