House lawmakers passed legislation aimed at giving financial regulators in the United States better digital tools, FedScoop reported Wednesday (Sept. 16).
The FUTURES Act cleared the House earlier this week by a vote of 417 to 7, the report said. FUTURES stands for Fostering the Use of Technology to Uphold Regulatory Effectiveness in Supervision.
The bill would instruct financial regulators, such as the Federal Reserve, Consumer Financial Protection Bureau and Federal Deposit Insurance Corp., to provide Congress with an assessment of their technical capabilities. From there, lawmakers would work to break down procurement barriers and close any obvious technological gaps, according to the report.
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“Put simply, we can’t help our regulators modernize their technology for the digital age if we don’t know the challenges that they face, whether it’s talent gaps, procurement barriers or technological blind spots,” said Rep. Marlin Stutzman of Indiana, one of the bill’s co-sponsors, per the report. “Congress needs to understand the red tape that is keeping government in the past while the financial system races into the future.”
Getting these agencies to provide self-assessments should be simple considering that banks and credit unions already “undergo quarterly technology reviews, internal testing, and rigorous due diligence on every vendor that they use,” Stutzman said, according to the report.
“It’s only fair that we hold their regulators to the same standard,” he said, per the report.
The legislation also requires regulators to come up with plans to address technology gaps they find, and then conduct additional reviews every five years, the report said.
Rep. Bill Foster of Illinois, the bill’s other co-sponsor, said the banking failures of 2023 demonstrate the way 24-hour banking tools and social media panic can “intensify” bank runs and exacerbate risk, per the report. Technology like agentic commerce brings new cybersecurity risks and the potential to “destabilize our financial system.”
Meanwhile, the Clarity Act was defeated in the Senate following more than a year of lobbying and negotiations, PYMNTS reported Tuesday (Sept. 15). The legislation’s path is narrower now as the midterm elections approach.
The PYMNTS Intelligence report “Chain Reaction: Regulatory Clarity as the Catalyst for Blockchain Adoption” found in January that regulation will determine blockchain’s next evolution.
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