Banking for All Act

II 116TH CONGRESS 2D SESSION S. 3571 To require member banks to maintain pass-through digital dollar wallets for certain persons, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 23, 2020 Mr. BROWN introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To require member banks to maintain pass-through digital dollar wallets for certain persons, 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 ‘‘Banking for All Act’’. 4 SEC. 2. DEFINITIONS. 5 In this Act: 6 (1) DIGITAL DOLLARS.—The term ‘‘digital dol- 7 lars’’ means dollar balances consisting of digital 8 ledger entries recorded as liabilities in the accounts 9 of any Federal reserve bank. 10 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3571 IS (2) DIGITAL DOLLAR WALLETS.—The term 1 ‘‘digital dollar wallet’’ means a digital wallet or ac- 2 count, maintained by a Federal reserve bank on be- 3 half of any person, for the purpose of holding digital 4 dollar balances. 5 (3) MEMBER BANK.—The term ‘‘member bank’’ 6 means any national bank, State bank, or bank or 7 trust company which has become a member of one 8 of the reserve banks created by the Federal Reserve 9 Act (12 U.S.C. 221 et seq.). 10 (4) PASS-THROUGH DIGITAL DOLLAR WAL- 11 LETS.—The term ‘‘pass-through digital dollar wal- 12 let’’ means a digital wallet or account, maintained 13 by a member bank on behalf of any person, entitling 14 that person to a pro rata share of a pooled reserve 15 balance that the member bank maintains at any 16 Federal reserve bank. 17 (5) POSTAL RETAIL FACILITY.—The term 18 ‘‘postal retail facility’’— 19 (A) means post office, post office branch, 20 post office classified station, or other facility 21 that is operated by the Postal Service, the pri- 22 mary function of which is to provide retail post- 23 al services; and 24 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3571 IS (B) does not include a contractor-operated 1 facility offering postal services. 2 (6) POSTAL SERVICE.—The term ‘‘Postal Serv- 3 ice’’ means the United States Postal Service. 4 SEC. 3. AUTHORITY AND MANDATE FOR MEMBER BANKS 5 TO MAINTAIN PASS-THROUGH DIGITAL DOL- 6 LAR WALLETS. 7 (a) OBLIGATIONS OF MEMBER BANKS.— 8 (1) IN GENERAL.—Member banks shall open 9 and maintain pass-through digital dollar wallets for 10 all persons, including persons eligible to receive pay- 11 ments from the United States pursuant to a Federal 12 law relating to the coronavirus disease 2019 13 (COVID–19), who elect to deposit funds into pass- 14 through digital dollar wallets. 15 (2) MAINTENANCE OF ASSETS.— 16 (A) IN GENERAL.—Each member bank 17 shall establish and maintain a separate legal en- 18 tity for the exclusive purpose of holding all as- 19 sets and maintaining all liabilities associated 20 with pass-through digital wallets. 21 (B) CONTENTS.—The assets of any entity 22 described in subparagraph (A) shall consist ex- 23 clusively of a balance maintained in a master 24 account at a Federal reserve bank, and the li- 25 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3571 IS abilities or obligations of the entity shall consist 1 exclusively of an equal quantity of balances 2 maintained by holders of pass-through digital 3 wallets. 4 (C) CAPITAL OR LIQUIDITY REGULA- 5 TION.—The assets and liabilities of any legal 6 entity described in subparagraph (A) shall not 7 be deemed assets or liabilities of the member 8 bank or its affiliates for purposes of any capital 9 or liquidity regulation promulgated by Federal 10 or State banking authorities. 11 (D) ONLINE APPLICATION REQUIREMENT 12 FOR LARGE BANKS.—Member banks with total 13 consolidated assets greater than 14 $10,000,000,000 shall promptly offer applica- 15 tion, through online or telephonic means, for 16 pass-through digital wallets. 17 (b) TERMS OF PASS-THROUGH DIGITAL DOLLAR 18 WALLETS.—Pass-through digital dollar wallets— 19 (1) shall not be subject to any account fees, 20 minimum balances, or maximum balances and shall 21 pay interest at a rate not below the greater of the 22 rate of interest on required reserves and the rate of 23 interest on excess reserves; 24 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3571 IS (2) shall provide functionality and service levels 1 no less favorable than those that the member bank 2 offers for its existing transaction accounts, including 3 with respect to debit cards, automated teller ma- 4 chines, online account access, automatic bill-pay, 5 mobile banking, customer service and such other 6 services as the Board of Governors of the Federal 7 Reserve System determines appropriate in the public 8 interest, provided that digital dollar wallets shall not 9 include overdraft coverage; 10 (3) shall be prominently branded in all account 11 statements, marketing materials, and other commu- 12 nications as ‘‘pass-through FedAccounts’’ main- 13 tained by the member bank on behalf of the Federal 14 Reserve; 15 (4) may not be closed or restricted by the bank 16 on the basis of profitability considerations; and 17 (5) shall provide account holders with reason- 18 able protection against losses caused by fraud or se- 19 curity breaches. 20 (c) REIMBURSEMENT FOR COSTS.— 21 (1) IN GENERAL.—Each postal retail facility 22 and each member bank with total consolidated assets 23 of not greater than $10,000,000,000 shall be reim- 24 bursed each calendar quarter by the relevant Fed- 25 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 3571 IS eral reserve bank for the actual and reasonable oper- 1 ational costs incurred by the postal retail facility or 2 member bank in offering pass-through digital dollar 3 wallets. 4 (2) REGULATIONS.—The Board of Governors of 5 the Federal Reserve System shall promulgate such 6 regulations as necessary to carry out this subsection. 7 (d) AUTHORITY OF THE BOARD.—Member banks 8 shall be subject to such regulations and obligations as may 9 be imposed by the Board of Governors of the Federal Re- 10 serve System in connection with maintaining pass-through 11 digital dollar wallets. 12 SEC. 4. AUTHORITY FOR STATE NONMEMBER BANKS AND 13 CREDIT UNIONS TO OFFER PASS-THROUGH 14 DIGITAL DOLLAR WALLETS. 15 The Federal reserve banks shall permit State non- 16 member banks and credit unions to open master accounts 17 for the exclusive purpose of offering pass-through digital 18 dollar wallets in compliance with the separate entity struc- 19 ture described in section 3(a), if— 20 (1) the pass-through digital wallets comply with 21 the terms set forth in section 3(b); and 22 (2) each State nonmember bank or credit union 23 electing to offer pass-through digital wallets shall be 24 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 3571 IS entitled to cost reimbursement in accordance with 1 section 3(c). 2 SEC. 5. AUTHORITY AND MANDATE FOR FEDERAL RESERVE 3 BANKS TO MAINTAIN DIGITAL DOLLAR WAL- 4 LETS FOR THE GENERAL PUBLIC. 5 (a) AUTHORIZATION.—Subject to such restrictions, 6 limitations, and regulations as may be imposed by the 7 Board of Governors of the Federal Reserve System, each 8 Federal reserve bank may maintain digital dollar wallets. 9 (b) MANDATE.— 10 (1) IN GENERAL.—All Federal reserve banks 11 shall, not later than January 1, 2021, make digital 12 wallets available to all residents and citizens of the 13 United States and to businesses domiciled in the 14 United States. 15 (2) LIMITED BRANCHES.—In areas where ac- 16 cess to physical member bank branches is limited, 17 including in low- or moderate-income geographies, 18 designated disaster areas, distressed or underserved 19 non-metropolitan middle-income geographies, as des- 20 ignated by the Federal Financial Institutions Exam- 21 ination Council, Federal reserve banks shall partner 22 with postal retail facilities to ensure access and 23 availability to application and account services for all 24 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 3571 IS residents and citizens of the United States and to 1 businesses domiciled in the United States. 2 (c) TERMS OF DIGITAL DOLLAR WALLETS.—Digital 3 dollar wallets— 4 (1) shall not be subject to any account fees, 5 minimum balances, or maximum balances, and shall 6 pay interest at a rate not below the greater of the 7 rate of interest on required reserves and the rate of 8 interest on excess reserves; 9 (2) shall provide debit cards, online account ac- 10 cess, automatic bill-pay, mobile banking, customer 11 service and other such services as the Board of Gov- 12 ernors of the Federal Reserve System determines ap- 13 propriate in the public interest, provided that digital 14 dollar wallets shall not include overdraft coverage; 15 (3) shall provide, in conjunction with the Postal 16 Service, access to automatic teller machines to be 17 maintained on behalf of the Board of Governors of 18 the Postal Service at postal retail facilities; 19 (4) shall be branded in all account statements, 20 marketing materials, and other communications as 21 ‘‘FedAccounts’’ maintained by the Federal reserve 22 bank on behalf of the United States of America; 23 (5) may not be closed or restricted on the basis 24 of profitability considerations; and 25 VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 3571 IS (6) shall provide account holders with reason- 1 able protection against losses caused by fraud or se- 2 curity breaches. 3 (d) BANK SECRECY ACT.—In establishing and main- 4 taining digital dollar wallets, each Federal reserve bank 5 shall comply with— 6 (1) section 21 of the Federal Deposit Insurance 7 Act (12 U.S.C. 1829b); 8 (2) chapter 2 of title I of Public Law 91–508 9 (12 U.S.C. 1951 et seq.); and 10 (3) subchapter II of chapter 53 of title 31, 11 United States Code. 12 (e) PRIVACY.—Section 552a of title 5, United States 13 Code (commonly known as the ‘‘Privacy Act of 1974’’), 14 shall apply to digital dollar wallets, and the privacy obliga- 15 tions applicable to each Federal reserve bank and its em- 16 ployees, including with respect to criminal and civil pen- 17 alties, shall mirror those applicable to Federal tax returns 18 under sections 6103, 7213(a)(1), 7213A, and 7431 of the 19 Internal Revenue Code of 1986. 20 SEC. 6. REGULATIONS. 21 The Board of Governors of the Federal Reserve Sys- 22 tem shall promulgate regulations carrying out this Act. 23 Æ VerDate Sep 11 2014 00:29 Apr 08, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\S3571.IS S3571 pamtmann on DSKBC07HB2PROD with BILLS