Federal Reserve Accountability and Justification Act

I 116TH CONGRESS 1ST SESSION H. R. 3928 To require the Board of Governors of the Federal Reserve to satisfy certain requirements before providing any new payment service, or substantially changing or expanding any existing payment service, and for other pur- poses. IN THE HOUSE OF REPRESENTATIVES JULY 24, 2019 Mr. RIGGLEMAN 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 to satisfy certain requirements before providing any new payment service, or substantially changing or expanding any existing payment service, and for other purposes. 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 ‘‘Federal Reserve Ac- 4 countability and Justification Act’’. 5 SEC. 2. PAYMENT SERVICES. 6 Section 11A of the Federal Reserve Act (12 U.S.C. 7 248a) is amended by adding at the end the following: 8 VerDate Sep 11 2014 22:53 Aug 07, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3928.IH H3928 jspears on DSK3GMQ082PROD with BILLS 2 •HR 3928 IH ‘‘(f) PAYMENT SERVICE.— 1 ‘‘(1) IN GENERAL.—The Board may not provide 2 any new payment service, or substantially change or 3 expand any existing payment service unless the 4 Board determines that— 5 ‘‘(A) any costs associated with such service 6 will be recovered; 7 ‘‘(B) providing such service will yield a 8 clear public benefit, such as promoting the in- 9 tegrity of the payments system, improving the 10 effectiveness of financial markets, reducing the 11 risk associated with payments and securities- 12 transfer services, or improving the efficiency of 13 the payments system; 14 ‘‘(C) no other providers can be expected to 15 provide such service with reasonable effective- 16 ness, scope, and equity; and 17 ‘‘(D) other providers are able to compete 18 with the Federal Reserve Banks in offering 19 such service, based on a competitive impact 20 study. 21 ‘‘(2) REASONABLE EFFECTIVENESS, SCOPE, 22 AND EQUITY.— 23 ‘‘(A) IN GENERAL.—For the purposes of 24 paragraph 1(A), the Board shall determine that 25 VerDate Sep 11 2014 18:11 Aug 03, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3928.IH H3928 jspears on DSK3GMQ082PROD with BILLS 3 •HR 3928 IH other providers can be expected to provide such 1 service with reasonable effectiveness, scope, and 2 equity if the Board has found that other pro- 3 viders— 4 ‘‘(i) offer a service that substantially 5 performs the material functions of such 6 service that the Board would provide and 7 offer the service to member and non- 8 member depository institutions on non- 9 discriminatory terms, regardless of the size 10 of the institution; or 11 ‘‘(ii) are capable within a reasonable 12 time of offering a service that substantially 13 performs the material functions of such 14 service that the Board would provide and 15 of offering the service to member and non- 16 member depository institutions on non- 17 discriminatory terms, regardless of the size 18 of the institution. 19 ‘‘(B) CENTRAL BANK MONEY.—The ability 20 of the Board to settle interbank obligations 21 using balances at the central bank (also re- 22 ferred to as central bank money) shall not alone 23 be sufficient to support a determination by the 24 Board that other providers alone cannot be ex- 25 VerDate Sep 11 2014 18:11 Aug 03, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3928.IH H3928 jspears on DSK3GMQ082PROD with BILLS 4 •HR 3928 IH pected to provide such service with reasonable 1 effectiveness, scope, and equity. 2 ‘‘(3) EXCEPTION.—The service offered by the 3 Board known as the ‘Federal Funds Wire Service’ is 4 not subject to the requirements of this subsection. 5 ‘‘(4) FINAL RULE.—The Board shall publish in 6 the Federal Register, in accordance with section 553 7 of title 5 of the United States Code, a final rule that 8 states any determination made pursuant to para- 9 graph (1) and explains the basis for such determina- 10 tion. 11 ‘‘(5) JUDICIAL REVIEW.— 12 ‘‘(A) IN GENERAL.—Any person adversely 13 affected or aggrieved by a failure of the Board 14 to properly make a determination under this 15 subsection before providing a new payment 16 service or substantially changing or expanding 17 an existing payment service is entitled to judi- 18 cial review thereof. 19 ‘‘(B) DEFERENCE.—A court may not give 20 deference to the Board when conducting a re- 21 view under this paragraph.’’. 22 Æ VerDate Sep 11 2014 18:11 Aug 03, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H3928.IH H3928 jspears on DSK3GMQ082PROD with BILLS