H.R. 8395

[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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