H.R. 8395 — PACE Act of 2026

This section defines terms used in the Act, including "covered provider" (i.e., a person providing payment services that holds at least 40 active state money transmitter licenses, a state depository institution charter, or a state credit union charter); "payment service" (i.e., receiving monetary value for transmission, receiving funds on behalf of a payee, selling stored value or payment instruments, or providing access or custody services for monetary value); "payments reserve account" (i.e., an account at a Federal Reserve Bank with access to Fedwire Funds Service, FedNow Service, and FedACH Services); and "registered covered provider" (i.e., a covered provider registered with the Comptroller).

This section establishes a federal registration process administered by the Comptroller of the Currency for covered providers (i.e., eligible state-licensed payment service providers, such as money transmitter licensees) to become registered covered providers authorized to provide payment services in any state. The Comptroller must evaluate applications solely based on six factors: (1) the applicant engages only in payment services or incidental activities; (2) the applicant meets requirements of sections 4 and 5; (3) the applicant has adequate financial resources, expertise, and governance; (4) the applicant complies with the Bank Secrecy Act; (5) the applicant demonstrates public benefits such as innovation, competition, and access to payment services; and (6) the applicant is not a designated financial market utility. For applications received within 180 days of enactment, the Comptroller notifies applicants of completeness within 180 days (extendable by 60 days); subsequent applications receive notification within 30 days. The Comptroller must decide within 180 days of completeness notification (with automatic approval if missed) and may deny only for failure to meet the factors, providing a written explanation with findings. The section further requires the Comptroller to establish by rule a revocation process—including notice and review—if the factors are no longer met.

This section establishes customer protection standards for registered covered providers. Specifically, subsection (a) requires such providers to maintain identifiable reserves backing outstanding payment obligations on a 1-to-1 basis using highly liquid assets—including U.S. coins and currency, Federal Reserve accounts, demand deposits at insured depository institutions (subject to safety/soundness limits), funds in transit, Treasury bills/notes/bonds with remaining maturities of 93 days or less, certain overnight repurchase and reverse repurchase agreements collateralized by short-term Treasuries, government money market funds invested in such assets, other liquid federal assets approved by the Comptroller, and tokenized versions of specified reserves—while prohibiting rehypothecation except as permitted under section 4(a)(2) of the GENIUS Act (12 U.S.C. 5903(a)(2)) and requiring segregation of customer monetary value for access or custody services. Subsection (b) requires recordkeeping of outstanding payment obligations and reserves per customer, as well as beneficial ownership records for access or custody services.

This section subjects registered covered providers to capital, liquidity, and risk management regulations issued under the GENIUS Act (i.e., as applicable to permitted payment stablecoin issuers), tailored to the providers' business model and risk profile. The section further imposes fair access obligations on such providers, requiring them (1) to comply with the Equal Credit Opportunity Act as creditors; (2) not to deny payment services based on an individual's constitutionally or statutorily protected beliefs, affiliations, or political views; (3) not to cancel payment services accounts to inhibit such beliefs, affiliations, or views; and (4) to base all payment services decisions on individualized, objective, and risk-based analyses.

This section authorizes the Comptroller to examine registered covered providers with respect to (1) operations and financial condition; (2) financial, operational, and other risks to the provider's safety and soundness or U.S. financial system stability; (3) risk monitoring and control systems; and (4) compliance with federal consumer financial law, including by assessing consumer and market risks. The section further subjects persons performing services or activities critical to a registered covered provider's payment services to Comptroller regulation and supervision as if performed by the provider and requires the provider to notify the Comptroller of such relationships within 30 days of contract execution or commencement. Finally, the section authorizes the Comptroller to enforce requirements of sections 4 and 5 against registered covered providers using powers applicable to insured depository institutions under section 8 of the Federal Deposit Insurance Act.

This section requires a registered covered provider to submit reports to the Comptroller, at a frequency established by the Comptroller, covering (1) the provider's financial condition, (2) compliance with this Act and other applicable payment services laws, and (3) other information reasonably required by the Comptroller regarding the provider and its payment services. The Comptroller must, to the maximum extent practicable, use existing reports and supervisory information to fulfill these requirements and avoid duplicating examinations, reporting, or information requests.

This section establishes an insolvency and resolution regime for nonbank providers (i.e., registered covered providers that are not insured depository institutions), excluding them from treatment as debtors under chapters 7 or 11 of the Bankruptcy Code (11 U.S.C.). It authorizes covered State regulators to administer such proceedings, permits the Comptroller to be appointed as conservator or receiver, and requires the Comptroller to intervene if a state does not act promptly (as defined by Comptroller rules). In liquidation or resolution, it sets the following order of priority for claims (other than secured claims to the extent of the security): (1) administrative expenses of the conservator or receiver; (2) outstanding payment obligations to customers; (3) other general or senior liabilities; (4) subordinated obligations other than shareholder claims; and (5) shareholder or member obligations. Segregated custodial assets are excluded from general assets subject to this priority, with any shortfalls in such assets receiving the same priority as customer payment obligations. It confers on the conservator or receiver (Comptroller or state regulator) the same additional powers and duties applicable to conservators or receivers of insured depository institutions under other federal laws.

This section authorizes a registered covered provider to request access to a payments reserve account from the Board of Governors in the same manner as an insured depository institution, with the Board required to approve or deny the request within 120 days (extendable by 60 days) and the request deemed approved if no action is taken. The section further grants the Board enforcement authority in unusual and exigent circumstances to issue a cease-and-desist-like directive against a registered covered provider using such an account in noncompliance with sections 4 and 5 of the Act, provided 48 hours' prior notice to the relevant state regulator and Comptroller. It directs the Board, within 180 days of enactment and in consultation with the Conference of State Bank Supervisors, to define "unusual and exigent circumstances" by rule and establishes administrative review (with automatic lapse after 10 days if not affirmed, modified, or rescinded) and judicial review processes for such directives.

This section excludes a balance with a registered covered provider (as defined in section 2 of the PACE Act of 2026) from the definition of security in the Investment Advisers Act of 1940, Investment Company Act of 1940, Securities Act of 1933, Securities Exchange Act of 1934, and Securities Investor Protection Act of 1970. (Thus, such balances are not subject to registration, disclosure, antifraud, or investor protection requirements under those statutes.)