H.R. 8278: Fostering the Use of Technology to Uphold Regulatory Effectiveness in Supervision Act

This bill, known as the "Fostering the Use of Technology to Uphold Regulatory Effectiveness in Supervision Act," aims to improve how regulatory agencies in the financial sector monitor and supervise financial institutions by assessing and updating their technological capabilities. Here are the key components of the bill:

Purpose and Findings

The bill presents several findings highlighting challenges faced by banking regulators, such as:

• Lack of access to real-time information when examining financial institutions.
• Need for supervisory regulators to better leverage technology to fulfill their responsibilities.
• Risks associated with outdated technology, which can lead to vulnerabilities in the financial system.
• Rapid advancements in artificial intelligence within financial firms that could both enhance and complicate regulatory oversight.

Assessment of Technological Capabilities

The bill mandates the covered agencies to conduct an assessment of their existing technology within 180 days after the bill's enactment. This assessment should focus on:

• Core technology infrastructure used for supervision.
• Specific technologies used in the supervision process.
• Technologies for monitoring market risks using both internal and external data.
• Technologies related to data collection, storage, processing, and security.

Procurement Practices Evaluation

In addition to assessing technological capabilities, the agencies are required to evaluate their procurement practices to identify potential improvements. This evaluation should also be completed within 180 days and aim to:

• Review current rules and protocols for acquiring or developing technological systems.
• Find opportunities to streamline these practices to enhance the effectiveness of technology testing.

Reporting Requirements

Following the assessments, covered agencies must submit a report to Congress no later than 18 months afterward, and every five years thereafter. The report should include:

• An overview of hardware and software used in supervisory activities.
• A description of procurement practices and opportunities to simplify them.
• Insights into workforce capabilities in technology development.
• Processes for obtaining information from supervised entities, along with identifying obstacles.
• Market and technology trends that may influence regulatory practices.
• Cost estimates for supervised entities to modify their systems for data sharing.
• Plans for future technological upgrades within the agencies, including costs and anticipated challenges.

Covered Agencies

The term "covered agency" encompasses several key financial regulatory entities, including:

• The Board of Governors of the Federal Reserve System
• The Bureau of Consumer Financial Protection
• The Federal Deposit Insurance Corporation
• The Department of the Treasury (including the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network)
• The Federal Housing Finance Agency
• The National Credit Union Administration

Relevant Companies

None found.