Bank Service Company Examination Coordination Act of 2019

Floor Speech

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Mr. WILLIAMS. Mr. Speaker, I am proud to support H.R. 241, the Bank Service Company Examination Coordination Act, commonsense legislation that enables State and Federal regulators to better coordinate their examination activities.

The bill allows for the sharing of supervisory information concerning technology service providers, better known as TSPs, between State and Federal regulators.

Banks use TSPs in their day-to-day operations for a variety of activities, such as processing payments, taking deposits, or assisting with cybersecurity efforts. As banks are adapting to a more interconnected world, partnerships between financial institutions and TSPs are not only common, but they are necessary.

State and Federal regulators each have the ability to examine technology vendors for safety and for soundness, but current law prevents them from sharing the results of their independent examinations, a problem that H.R. 241 corrects.

H.R. 241 helps to harmonize the oversight process without adding risk to their financial system. Sharing the results of regulatory examination results between agencies can reveal the weaknesses of an individual institution as well as the larger banking system as a whole.

The Financial Stability Oversight Council, which is charged with identifying risks in the U.S. financial system, recommended in their 2017 annual report to enhance coordination between State and Federal regulators. Specifically, the report called on Congress to pass legislation that encourages coordination among the Federal and State regulators in the oversight of third-party service providers. The result would be reducing potentially conflicting and duplicative regulatory oversight, while also promoting more consistent cybersecurity standards.

Sharing the results of these TSP supervisory exams allows for agencies to more efficiently use their limited resources, while ensuring that private companies are not subject to an avoidable, duplicative review.

I want to thank Chairwoman Waters. I want to thank Ranking Member McHenry, and especially my friend on the other side of the aisle, Congressman Meeks, and all the staff for their diligent work.

I am proud of the bipartisan effort in both the 115th and the 116th Congresses that allowed for the passage of H.R. 241 today. I urge all my colleagues to support this legislation.

Mr. SAN NICOLAS. Mr. Speaker, I am prepared to close. I reserve the balance of my time.

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