Bill Summary
This bill, known as the "Federal Reserve Accountability and Justification Act," requires the Board of Governors of the Federal Reserve to meet certain requirements before providing any new payment service or making significant changes to existing payment services. These requirements include ensuring that the costs associated with the service will be recovered, that it will provide a clear public benefit, and that it will not unfairly compete with other providers. The Board must also publish a final rule explaining the basis for their determination and granting the public the right to judicial review if they feel the Board did not properly follow these requirements. This bill aims to increase transparency and accountability in the Federal Reserve's decision-making process for payment services.
Possible Impacts
1. If the Board of Governors of the Federal Reserve determines that new payment services or changes to existing services must meet certain requirements, it could potentially limit the availability or accessibility of these services to certain individuals or businesses. This could affect people who rely on these services for their daily transactions or financial activities.
2. Additionally, the requirement for the Board to determine that the costs associated with these payment services will be recovered could result in higher fees or charges for those using these services. This could disproportionately affect low-income individuals or those with limited financial resources.
3. The provision for judicial review could also affect people, as it allows for individuals or organizations to challenge the decisions of the Board. This could lead to delays or changes in the implementation of new payment services, potentially impacting those who were expecting or relying on these services.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3928 Introduced in House (IH)]
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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 purposes.
_______________________________________________________________________
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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Reserve Accountability and
Justification Act''.
SEC. 2. PAYMENT SERVICES.
Section 11A of the Federal Reserve Act (12 U.S.C. 248a) is amended
by adding at the end the following:
``(f) Payment Service.--
``(1) In general.--The Board may not provide any new
payment service, or substantially change or expand any existing
payment service unless the Board determines that--
``(A) any costs associated with such service will
be recovered;
``(B) providing such service will yield a clear
public benefit, such as promoting the integrity of the
payments system, improving the effectiveness of
financial markets, reducing the risk associated with
payments and securities-transfer services, or improving
the efficiency of the payments system;
``(C) no other providers can be expected to provide
such service with reasonable effectiveness, scope, and
equity; and
``(D) other providers are able to compete with the
Federal Reserve Banks in offering such service, based
on a competitive impact study.
``(2) Reasonable effectiveness, scope, and equity.--
``(A) In general.--For the purposes of paragraph
1(A), the Board shall determine that other providers
can be expected to provide such service with reasonable
effectiveness, scope, and equity if the Board has found
that other providers--
``(i) offer a service that substantially
performs the material functions of such service
that the Board would provide and offer the
service to member and nonmember depository
institutions on nondiscriminatory terms,
regardless of the size of the institution; or
``(ii) are capable within a reasonable time
of offering a service that substantially
performs the material functions of such service
that the Board would provide and of offering
the service to member and nonmember depository
institutions on nondiscriminatory terms,
regardless of the size of the institution.
``(B) Central bank money.--The ability of the Board
to settle interbank obligations using balances at the
central bank (also referred to as central bank money)
shall not alone be sufficient to support a
determination by the Board that other providers alone
cannot be expected to provide such service with
reasonable effectiveness, scope, and equity.
``(3) Exception.--The service offered by the Board known as
the `Federal Funds Wire Service' is not subject to the
requirements of this subsection.
``(4) Final rule.--The Board shall publish in the Federal
Register, in accordance with section 553 of title 5 of the
United States Code, a final rule that states any determination
made pursuant to paragraph (1) and explains the basis for such
determination.
``(5) Judicial review.--
``(A) In general.--Any person adversely affected or
aggrieved by a failure of the Board to properly make a
determination under this subsection before providing a
new payment service or substantially changing or
expanding an existing payment service is entitled to
judicial review thereof.
``(B) Deference.--A court may not give deference to
the Board when conducting a review under this
paragraph.''.
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