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Code · BILL · 119th Congress · S. 394 (Introduced in Senate) — To provide for the regulation of payment stablecoins, and for other purposes. · Sec. 6

Sec. 6. Supervision and enforcement with respect to subsidiaries of insured depository institutions and Comptroller-regulated entities

1,245 words·~6 min read·/bill/119/s/394/is/section-6

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Each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be subject to supervision by the primary Federal payment stablecoin regulator in the same manner as such insured depository institution. For purposes of title V of the Gramm-Leach-Bliley Act ( 15 U.S.C. 6801 et seq. ) each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be deemed a financial institution. Each Comptroller-regulated entity shall, upon request, submit reports to the Comptroller as to— the financial condition of the Comptroller-regulated entity, systems for monitoring and controlling financial and operating risks; and compliance by the Comptroller-regulated entity (and any subsidiary thereof) with this Act.
The Comptroller may make examinations of a Comptroller-regulated entity and each subsidiary of such entity in order to inform the Comptroller of— the nature of the operations and financial condition of the Comptroller-regulated entity; the financial, operational, and other risks within the Comptroller-regulated entity that may pose a threat to— the safety and soundness of the Comptroller-regulated entity; or the stability of the financial system of the United States; and the systems of the Comptroller-regulated entity for monitoring and controlling the risks described in clause (ii).
In supervising and examining a Comptroller-regulated entity, the Comptroller shall, to the fullest extent possible, use existing reports and other supervisory information. The Comptroller shall, to the fullest extent possible, avoid duplication of examination activities, reporting requirements, and requests for information in carrying out this Act with respect to a Comptroller-regulated entity. The Comptroller shall, with respect to any examination or request for the submission of a report under this paragraph, only request examinations and reports at a cadence and in a format that is similar to those required for similarly situated Comptroller-regulated entities.
The primary Federal payment stablecoin regulator may prohibit a permitted payment stablecoin issuer from issuing payment stablecoins, if the primary Federal payment stablecoin regulator determines that such permitted payment stablecoin issuer, or an institution-affiliated party of the permitted payment stablecoin issuer, is— materially violating or has materially violated this Act or any regulation or order issued under this Act; or materially violating or has materially violated any condition imposed in writing by the primary Federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and the primary Federal payment stablecoin regulator.
If the primary Federal payment stablecoin regulator has reasonable cause to believe that a permitted payment stablecoin issuer or any institution-affiliated party of a permitted payment stablecoin issuer is violating, has violated, or is attempting to violate this Act, any regulation or order issued under this Act, or any written agreement entered into with the primary Federal payment stablecoin regulator or condition imposed in writing by the primary Federal payment stablecoin regulator in connection with any application or other request, the primary Federal payment stablecoin regulator may, by provisions that are mandatory or otherwise, order the permitted payment stablecoin issuer or institution-affiliated party of the permitted payment stablecoin issuer to— cease and desist from such violation or practice; or take affirmative action to correct the conditions resulting from any such violation or practice.
The primary Federal payment stablecoin regulator may remove an institution-affiliated party of a permitted payment stablecoin issuer from their position or office or prohibit further participation in the affairs of the permitted payment stablecoin issuer or all permitted payment stablecoin issuers by such institution-affiliated party, if the primary Federal payment stablecoin regulator determines that— the institution-affiliated party has, directly or indirectly, committed a violation or attempted violation of this Act or any regulation or order issued under this Act; or the institution-affiliated party has committed a violation of any provision of subchapter II of chapter 53 of title 31, United States Code.
If the primary Federal payment stablecoin regulator identifies a violation or attempted violation of this Act or makes a determination under paragraph (1), (2), or (3), the primary Federal payment stablecoin regulator shall comply with the procedures set forth in subsections
(b)and
(e)of sections 8 of the Federal Deposit Insurance Act ( 12 U.S.C. 1818 ). A person aggrieved by a final action under this subsection may obtain judicial review of such action exclusively as provided in section 8(h) of the Federal Deposit Insurance Act ( 12 U.S.C. 1818(h) ). The primary Federal payment stablecoin regulator may, in the discretion of the regulator, follow the procedures provided in section 8(i)(1) of the Federal Deposit Insurance Act ( 12 U.S.C. 1818(i)(1) ) for judicial enforcement of any effective and outstanding notice or order issued under this subsection. If the primary Federal payment stablecoin regulator determines that a violation or attempted violation of this Act or an action with respect to which a determination was made under paragraph (1), (2), or (3), or the continuation thereof, is likely to cause insolvency or significant dissipation of assets or earnings of a permitted payment stablecoin issuer, or is likely to weaken the condition of the permitted payment stablecoin issuer or otherwise prejudice the interests of the customers of the permitted payment stablecoin issuer prior to the completion the proceedings conducted under this paragraph, the primary Federal payment stablecoin regulator may follow the procedures provided in section 8(c) of the Federal Deposit Insurance Act ( 12 U.S.C. 1818(c) ) to issue a temporary cease-and-desist order. Any person who issues a United States dollar-denominated payment stablecoin and who is not a permitted payment stablecoin issuer, and any institution-affiliated party of such a person who knowingly participates is issuing such a payment stablecoin, shall be liable for a civil penalty of not more than $100,000 for each day during which such payment stablecoins are issued. Except as provided in subparagraph (A), a permitted payment stablecoin issuer or institution-affiliated party of such permitted payment stablecoin issuer that materially violates this Act or any regulation or order issued under this Act, or that materially violates any condition imposed in writing by the primary Federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and the primary Federal payment stablecoin regulator, shall be liable for a civil penalty of up to $100,000 for each day during which the violation continues. Except as provided in subparagraph (A), and in addition to the penalties described under subparagraph (B), a permitted payment stablecoin issuer or institution-affiliated party of such permitted payment stablecoin issuer who knowingly participates in a violation of any provision of this Act, or any regulation or order issued thereunder, is liable for a civil penalty of up to an additional $100,000 for each day during which the violation continues. Any penalty imposed under this paragraph may be assessed and collected by the primary Federal payment stablecoin regulator pursuant to the procedures set forth in section 8(i)(2) of the Federal Deposit Insurance Act ( 12 U.S.C. 1818(i)(2) ). The resignation, termination of employment or participation, or separation of an institution-affiliated party (including a separation caused by the closing of a permitted payment stablecoin issuer) shall not affect the jurisdiction and authority of the primary Federal payment stablecoin regulator to issue any notice or order and proceed under this subsection against any such party, if such notice or order is served before the end of the 6-year period beginning on the date such party ceased to be an institution-affiliated party with respect to such permitted payment stablecoin issuer. This subsection shall not apply to a State qualified payment stablecoin issuer.
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Sec. 6
Supervision and enforcement with respect to subsidiaries of insured depository institutions and Comptroller-regulated entities
U.S.C.§ 6801
U.S.C.§ 1818
Cites 2Cited by 0 across 0 sources
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