Sec. 7. State qualified payment stablecoin issuers
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/bill/119/s/394/is/section-7·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A State payment stablecoin regulator shall have supervisory, examination, and enforcement authority over a State qualified payment stablecoin issuer of such State. A State payment stablecoin regulator may enter into a memorandum of understanding with the Board, by mutual agreement, under which the Board may carry out the supervision, examination, and enforcement authority with respect to the State qualified payment stablecoin issuers of such State. A State payment stablecoin regulator and the Board shall share information on an ongoing basis with respect to a State qualified payment stablecoin issuer of such State, including a copy of the initial application and any accompanying documents.
A State payment stablecoin regulator may issue orders and rules under section 4 applicable to State qualified payment stablecoin issuers to the same extent as the primary Federal payment stablecoin regulators issue orders and rules under section 4 applicable to permitted payment stablecoin issuers that are not a State qualified payment stablecoin issuers. Subject to subparagraph (C), in exigent circumstances, the Board may, after not less than 5 days prior written notice to the applicable State payment stablecoin regulator, take an enforcement action against a State qualified payment stablecoin issuer or an institution-affiliated party of such issuer for violations of this Act that are exigent in nature.
Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Board shall issue rules to set forth those exigent circumstances in which the Board may act under this paragraph. If the Board determines that there is reasonable cause to believe that the continuation by a State qualified payment stablecoin issuer of any activity constitutes a serious risk to the financial safety, soundness, or stability of the stablecoin issuer, the Board may impose such restrictions as the Board determines to be necessary to address such risk.
Such restrictions shall be issued in the form of a directive, with the effect of a cease and desist order that has become final, to the State qualified payment stablecoin issuer and any of its affiliates, limiting— the payment of dividends by the State qualified payment stablecoin issuer; transactions between the State qualified payment stablecoin issuer, a holding company, and the subsidiaries or affiliates of either the State qualified payment stablecoin issuer or the holding company; and any activities of the State qualified payment stablecoin issuer that might create a serious risk that the liabilities of a holding company and the affiliates of the holding company may be imposed on the State qualified payment stablecoin issuer.
After a directive described in subparagraph
(C)is issued, the State qualified payment stablecoin issuer, or any affiliate of the State qualified payment stablecoin issuer subject to the directive, may object and present to the Board, in writing, the reasons why the directive should be modified or rescinded. If, after 10 days after the receipt of a response described in subclause (I), the Board does not affirm, modify, or rescind the directive, the directive shall automatically lapse. If the Board affirms or modifies a directive pursuant to clause (i), 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. Upon a showing of extraordinary cause, an affected party may petition for relief under subclause
(I)without first pursuing or exhausting the administrative remedies under clause (i). Subject to subparagraph (C), in exigent circumstances, the Comptroller shall, after not less than 5 days prior written notice to the applicable State payment stablecoin regulator, take an enforcement action against a Comptroller-regulated entity or an institution-affiliated party of such entity for violations of this Act. Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Comptroller shall issue rules to set forth those exigent circumstances in which the Comptroller may act under this paragraph. If the Comptroller determines that there is reasonable cause to believe that the continuation by a Comptroller-regulated entity of any activity constitutes a serious risk to the financial safety, soundness, or stability of the stablecoin issuer, the Comptroller shall impose such restrictions as the Comptroller determines to be necessary to address such risk. Such restrictions shall be issued in the form of a directive, with the effect of a cease and desist order that has become final, to the State qualified payment stablecoin issuer and any of its affiliates, limiting— the payment of dividends by the Comptroller-regulated entity; transactions between the Comptroller-regulated entity, a holding company, and the subsidiaries or affiliates of either the Comptroller-regulated entity or the holding company; and any activities of the Comptroller-regulated entity that might create a serious risk that the liabilities of a holding company and the affiliates of the holding company may be imposed on the Comptroller-regulated entity. After a directive described in subparagraph
(C)is issued, the Comptroller-regulated entity, or any affiliate of the Comptroller-regulated entity subject to the directive, may object and present to the Comptroller, in writing, the reasons why the directive should be modified or rescinded. If, after 10 days after the receipt of a response described in subclause (I), the Comptroller does not affirm, modify, or rescind the directive, the directive shall automatically lapse. If the Comptroller affirms or modifies a directive pursuant to clause (i), 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. Upon a showing of extraordinary cause, an affected party may petition for relief under subclause
(I)without first pursuing or exhausting the administrative remedies under clause (i). For purposes of title V of the Gramm-Leach-Bliley Act ( 15 U.S.C. 6801 et seq. ) a State qualified payment stablecoin issuer is deemed a financial institution. The consumer protection laws that generally apply to the operation of a payment stablecoin issuer of the Host State apply to the activities conducted in the Host State by an out-of-State State qualified payment stablecoin issuer to the same extent as those requirements apply to the activities conducted in the Host State by an out-of-State Federal qualified nonbank payment stablecoin issuer. If any Host State law is determined not to apply under paragraph (1), the laws of the Home State of the payment stablecoin issuer shall govern the activities of the payment stablecoin issuer conducted in the Host State.
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Sec. 7
State qualified payment stablecoin issuers
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