What does Preamble of PACE Act of 2026 do?

This bill is formally titled 'To provide for the regulation of registered covered providers, and for other purposes.'

What does SHORT TITLE. of PACE Act of 2026 do?

This bill is formally titled the Payments Access and Consumer Efficiency Act of 2026.

What does DEFINITIONS. of PACE Act of 2026 do?

This section defines terms used in the Act Definitions include 'Board of Governors', 'Comptroller', and 'Covered provider' A 'Covered provider' must hold specific licenses or charters The section also defines 'Payment service', 'Payment instrument', and 'Monetary value' Other defined terms include 'Insured depository institution', 'Deposit', and 'Stored value'

What does FEDERAL REGISTRATION OF ELIGIBLE STATE PAYMENT SERVICE of PACE Act of 2026 do?

This section establishes a process for the registration of eligible state payment service providers with the Comptroller. To register, a covered provider must submit an application evaluated based on factors including supporting payment services, meeting requirements of sections 4 and 5, possessing adequate resources and expertise, complying with the Bank Secrecy Act, demonstrating public benefit, and not being a designated financial market utility. Covered providers described in section 2(3)(A) that become registered may provide payment services in any state. The Comptroller must notify applicants within specific timeframes (180 days initially, potentially extended by 60 days) regarding application completeness or required information. The Comptroller has 180 days after notifying an applicant that their application is complete to approve or deny it; failure to do so results in deemed approval. Applications can be denied only if the Comptroller determines the factors outlined in subsection (a)(3) are not satisfied, and a written explanation must be provided. The Comptroller can revoke a registration if the factors in subsection (a)(3) are no longer satisfied, following a process that includes notice and review.

What does CUSTOMER PROTECTION STANDARDS. of PACE Act of 2026 do?

This section establishes customer protection standards for registered covered providers. Registered covered providers must maintain reserves backing outstanding payment obligations on at least a 1 to 1 basis. Acceptable reserves include U.S. coins and currency, funds in insured depository institutions, Treasury bills, repurchase agreements, reverse repurchase agreements, and certain government money market fund securities. Reserves may not be pledged, rehypothecated, or reused except as permitted by the GENIUS Act. Providers offering access or custody services must segregate and separately account for monetary value. Providers must maintain records of outstanding payment obligations and reserves held. Providers providing access or custody services must also maintain beneficial ownership records.

What does RISK MANAGEMENT STANDARDS AND FAIR ACCESS. of PACE Act of 2026 do?

The Comptroller ensures registered covered providers follow capital, liquidity, and risk management regulations. Registered covered providers are subject to the Equal Credit Opportunity Act. Providers may not deny access to payment services based on protected beliefs, affiliations, or political views.

What does EXAMINATIONS, CONTRACTED SERVICES, AND ENFORCEMENT. of PACE Act of 2026 do?

This section outlines the Comptroller's authority to examine registered covered providers regarding their operations, financial condition, and associated risks. Examinations include assessing risks to the safety and soundness of the provider and the stability of the U.S. financial system. The Comptroller can examine systems for monitoring and controlling these risks, and compliance with federal consumer financial law. When a registered covered provider contracts for critical services, the performing entity is subject to Comptroller regulation and supervision. Providers must notify the Comptroller of such relationships within 30 days of contract initiation or service commencement. The Comptroller can enforce requirements outlined in sections 4 and 5 of this Act against registered covered providers, utilizing authorities from the Federal Deposit Insurance Act.

What does REPORTS. of PACE Act of 2026 do?

Registered providers are required to submit reports to the Comptroller. These reports must detail the financial condition of the provider. Reports must also address compliance with this Act and other applicable laws regarding payment services. The Comptroller may request additional information related to the provider and their payment services. The Comptroller should utilize existing reports and supervisory information to avoid duplication.

What does PRIORITY FOR CUSTOMERS OF REGISTERED COVERED PROVIDERS. of PACE Act of 2026 do?

This section defines a 'nonbank provider' as a registered covered provider that is not an insured depository institution. Nonbank providers are excluded from being treated as debtors under Chapter 7 or Chapter 11 of Title 11 of the United States Code. Nonbank providers can be subject to insolvency proceedings administered by a covered State regulator. The Comptroller may be appointed as conservator or receiver for a nonbank provider by a covered State regulator. If a State does not promptly initiate an insolvency proceeding, the Comptroller is required to do so. When a nonbank provider is liquidated or resolved, customer balances are prioritized for payment after administrative expenses. Custodial assets, properly segregated from the nonbank provider's assets, are not considered general assets. The Comptroller or State conservator/receiver has additional powers and duties similar to those of a conservator or receiver of an insured depository institution.

What does ACCESS TO PAYMENTS RESERVE ACCOUNTS. of PACE Act of 2026 do?

This section outlines the process for registered covered providers to access payments reserve accounts, mirroring the access granted to insured depository institutions. The Board of Governors must approve or deny requests for access within 120 days, with a possible 60-day extension; failure to act within this timeframe results in automatic approval. The Board of Governors has enforcement authority to issue directives (effectively cease and desist orders) against registered covered providers who use payments reserve accounts to violate sections 4 and 5 of the Act. Before issuing a directive, the Board must provide written notice to the covered State regulator and the Comptroller at least 48 hours in advance. The Board of Governors must define 'unusual and exigent circumstances' within 180 days of the Act's enactment, consulting with the Conference of State Bank Supervisors. Registered covered providers can object to a directive and present reasons for modification or rescission to the Board of Governors. If the Board doesn't respond within 10 days of receiving an objection, the directive automatically lapses. Affected parties can petition a United States district court to review and potentially modify or terminate a directive affirmed or modified by the Board. Relief through judicial review can be pursued without exhausting administrative review if an affected party demonstrates 'extraordinary cause'.

Back to bills

PACE Act of 2026

Last updated: 4/21/2026 · Introduced: 4/21/2026

Author: Young Kim (R-CA)

TL;DR (AI)

This bill establishes a federal registration process for state-based payment service providers, requiring them to meet specific financial and operational standards to offer services nationwide.
Registered covered providers must maintain reserves equal to outstanding payment obligations, ensuring funds are available to meet customer needs and preventing misuse of those reserves.
The bill prohibits registered providers from denying payment services based on protected characteristics like beliefs or political views, promoting equitable access.
The Comptroller of the Currency and state regulators will oversee registered providers, with the Comptroller having authority to examine their operations and enforce compliance with the Act.
In the event of insolvency, customer balances held by nonbank registered providers will be prioritized for payment, similar to protections afforded to insured depository institutions.

119th Congressin committeeOfficial page

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