Sponsors (3)
The bill seeks to expand and stabilize nationwide nonbank payment services by imposing reserve, risk‑management, reporting, and supervisory rules and by creating a federal registration pathway — improving customer recoverability and systemic oversight while raising compliance costs, reducing some securities protections for certain balances, and concentrating federal authority in ways that may disadvantage smaller providers and state regulators.
Consumers and customers: account balances held at registered covered providers will be kept in segregated, identifiable, 1:1 liquid reserves and custodial assets will be protected, improving recoverability if a provider fails.
The payments system and taxpayers: registered providers will face capital, liquidity, and risk-management requirements plus federal supervision of providers and critical vendors, reducing the chance of operational failures and systemic disruptions.
Payment firms and multistate operators: the bill creates a clear federal registration pathway, aligned statutory definitions, and predictable review timelines (including backstop approvals), reducing regulatory uncertainty for firms that operate across states.
Customers whose balances are reclassified as 'excluded' under securities laws: may lose securities-law protections (disclosure, SIPC coverage, fiduciary duties), increasing the risk of unrecoverable losses.
Small and nonbank payment providers (and their customers): the new capital, liquidity, segregation, reporting, and supervisory requirements create substantial compliance and operational costs that may be passed to customers or push smaller entrants out of the market.
State regulators and local providers: enabling nationwide registration and access to Fed-linked facilities risks weakening state licensing authority and gives large registered providers a competitive edge that could concentrate market power.
Based on analysis of 10 sections of legislative text.
Creates a federal registration and prudential framework for large payment providers, requires 1:1 liquid reserves for customer liabilities, and excludes those balances from several securities-law definitions.
Official title: To provide for the regulation of registered covered providers, and for other purposes.
Introduced April 21, 2026 by Young Kim · Last progress April 21, 2026
Creates a federal registration regime for certain large nonbank payment providers that lets qualifying firms offer payment services nationwide, requires them to hold liquid, segregated reserves backing customer payment obligations, and authorizes supervision, examination, and enforcement by the Office of the Comptroller of the Currency (OCC). It also carves balances held with these registered providers out of multiple federal securities statutes so those balances are not treated as securities, investment company assets, or customers under several securities laws. The law sets definitions and eligibility tests for "covered providers," establishes application, approval, revocation, reporting, and examination processes, imposes capital, liquidity, and risk-management rules, creates a special insolvency regime with customer-priority liquidation rules for nonbank providers, and permits access to a Federal Reserve payments reserve account on par with insured depository institutions subject to Fed approval and emergency authority.