Sec. 5. Approval of subsidiaries of insured depository institutions and Federal qualified nonbank payment stablecoin issuers
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Each primary Federal payment stablecoin regulator shall receive, review, and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity that seeks to issue payment stablecoins as a Federal qualified nonbank payment stablecoin issuer. Each primary Federal payment stablecoin regulator shall establish a process and framework for the licensing, regulation, examination, and supervision of such entities that prioritizes the safety and soundness of such entities.
The primary Federal payment stablecoin regulators shall, before the date described in section 18— issue regulations consistent with that section to carry out this section; and pursuant to the regulations described in subparagraph (A), accept and process applications under this Act. The primary Federal payment stablecoin regulator shall, upon receipt of a substantially complete application, evaluate and make a determination on each application based on the criteria established under this Act.
A substantially complete application received under subsection
(a)shall be evaluated by the primary Federal payment stablecoin regulator using the factors described in subsection (c). The factors described in this subsection are the following: The ability of the applicant (or, in the case of an applicant that is an insured depository institution, the subsidiary of the applicant), based on financial condition and resources, to meet the requirements set forth under section 4. Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant. Any other factors established by the primary Federal payment stablecoin regulator that are necessary to ensure the safety and soundness of the permitted payment stablecoin issuer. Not later than 120 days after receiving a substantially complete application under subsection (a), a primary Federal payment stablecoin regulator shall render a decision on the application. For purposes of subparagraph (A), an application shall be considered substantially complete if the application contains sufficient information for the primary Federal payment stablecoin regulator to render a decision on whether the applicant satisfies the criteria under subsection (c). Not later than 30 days after receiving an application under subsection (a), a primary Federal payment stablecoin regulator shall notify the applicant whether the primary Federal payment stablecoin regulator considers the application to be substantially complete and, if the application is not substantially complete, the additional information the applicant must provide in order for the application to be considered substantially complete. An application considered substantially complete under this subparagraph remains substantially complete unless there is a material change in circumstances that requires the primary Federal payment stablecoin regulator to treat the application as a new application. The primary Federal payment stablecoin regulator shall only deny a complete application received under subsection
(a)if the regulator determines that the activities of the applicant would be unsafe or unsound based on the factors described in subsection (c). The issuance of a payment stablecoin on an open, public, or decentralized network shall not be a valid ground for denial of an application. If the primary Federal payment stablecoin regulator denies a complete application received under subsection (a), not later than 30 days after the date of such denial, the regulator shall provide the applicant with written notice explaining the denial with specificity, including all findings made by the regulator with respect to all identified material shortcomings in the application, including actionable recommendations on how the applicant could address the identified material shortcomings. Not later than 30 days after the date of receipt of any notice of the denial of an application under this section, the applicant may request, in writing, an opportunity for a written or oral hearing before the primary Federal payment stablecoin regulator to appeal the denial. Upon receipt of a timely request, the primary Federal payment stablecoin regulator shall notice a time (not later than 30 days after the date of receipt of the request) and place at which the applicant may appear, personally or through counsel, to submit written materials or provide oral testimony and oral argument. Not later than 60 days after the date of a hearing under this subparagraph, the primary Federal payment stablecoin regulator shall notify the applicant of a final determination, which shall contain a statement of the basis for that determination, with specific findings. If an applicant does not make a timely request for a hearing under this subparagraph, the primary Federal payment stablecoin regulator shall notify the applicant, not later than 10 days after the date by which the applicant may request a hearing under this subparagraph, in writing, that the denial of the application is a final determination of the primary Federal payment stablecoin regulator. If the primary Federal payment stablecoin regulator fails to render a decision on a complete application within the time period specified in paragraph (1), the application shall be deemed approved. The denial of an application under this section shall not prohibit the applicant from filing a subsequent application. The primary Federal payment stablecoin regulators shall annually report to Congress on the applications under subsection
(a)that have been pending for 180 days or more since the date the initial application was filed and for which the applicant has been informed that the application remains incomplete, including documentation on the status of such applications and why such applications have not yet been approved. Consistent with section 18, the primary Federal payment stablecoin regulators shall rules necessary for the regulation of the issuance of payment stablecoins, but may not impose requirements in addition to the requirements specified under section 4.