G:\CMTE\FS\16\MISC\TGS.XML [DISCUSSION DRAFT] 116TH CONGRESS 1ST SESSION H. R. ll To prohibit large platform utilities from being a financial institution or being affiliated with a person that is a financial institution, and for other purposes. IN THE HOUSE OF REPRESENTATIVES Ml. llllll introduced the following bill; which was referred to the Committee on llllllllllllll A BILL To prohibit large platform utilities from being a financial institution or being affiliated with a person that is a financial institution, and for other purposes. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 3 4 SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Keep Big Tech Out 5 Of Finance Act’’. g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 15:49 Jul 12, 2019 Jkt 000000 (739953 11) PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM G:\CMTE\FS\16\MISC\TGS.XML 2 1 SEC. 2. PROHIBITION RELATED TO LARGE PLATFORM UTIL- 2 3 ITIES. (a) IN GENERAL.—A large platform utility may not 4 be, and may not be affiliated with any person that is, a 5 financial institution. 6 (b) PROHIBITION RELATED TO 7 CRYPTOCURRENCIES.— 8 (1) IN GENERAL.—A large platform utility may 9 not establish, maintain, or operate a digital asset 10 that is intended to be widely used as medium of ex- 11 change, unit of account, store of value, or any other 12 similar function, as defined by the Board of Gov- 13 ernors of the Federal Reserve System. 14 (2) DEFINITIONS.—For purposes of paragraph 15 (1), the Board of Governors of the Federal Reserve 16 System shall define the terms ‘‘medium of ex- 17 change’’, ‘‘unit of account’’, and ‘‘store of value’’. 18 (c) WIND-DOWN PERIOD.—With respect to a large 19 platform utility— 20 (1) if the large platform utility is, or is affili- 21 ated with a person that is, a financial institution on 22 the date of enactment of this Act, subsection (a) 23 shall not apply to such large platform utility until 24 the end of the 1-year period beginning on the date 25 of enactment of this Act; and g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 15:49 Jul 12, 2019 Jkt 000000 (739953 11) PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM G:\CMTE\FS\16\MISC\TGS.XML 3 1 (2) if the large platform utility maintains or op- 2 erates a digital asset described under subsection 3 (b)(1) on the date of enactment of this Act, sub- 4 section (b) shall not apply to such large platform 5 utility until the end of the 1-year period beginning 6 on the date of enactment of this Act. 7 (d) PENALTY.—Any large platform utility or finan- 8 cial institution that violates subsection (a) or (b) shall be 9 subject to a fine of not more than $1,000,000 per each 10 day of such violation, in an action brought by the appro11 priate Federal financial regulator. 12 (e) RULEMAKING.—The appropriate Federal finan- 13 cial regulators may issue rules to carry out this section. 14 (f) DEFINITIONS.—In this section: 15 (1) AFFILIATE.—The term ‘‘affiliate’’ has the 16 meaning given that term under section 2 of the 17 Bank Holding Company Act of 1956. 18 (2) TRADING SYSTEM.—The 19 term ‘‘alternative trading system’’ has the meaning 20 given that term under section 242.300 of title 17, 21 Code of Federal Regulations. 22 (3) APPROPRIATE 23 LATOR.—The 24 regulator’’ means— g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 ALTERNATIVE 15:49 Jul 12, 2019 Jkt 000000 FEDERAL FINANCIAL REGU- term ‘‘appropriate Federal financial (739953 11) PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM G:\CMTE\FS\16\MISC\TGS.XML 4 1 (A) the appropriate Federal banking agen- 2 cy; 3 (B) the Commodity Futures Trading Com- 4 mission, in the case of a commodity pool oper- 5 ator, commodity trading advisor, and a futures 6 commission merchant; 7 (C) the National Credit Union Administra- 8 tion Board, in the case of a credit union; 9 (D) the Securities and Exchange Commis- 10 sion, in the case of an alternative trading sys- 11 tem, a broker, a dealer, an investment adviser, 12 an investment company, a national securities 13 exchange, and a private fund; and 14 (E) the Board of Governors of the Federal 15 Reserve System, in the case of a financial insti- 16 tution or a large platform utility that does not 17 otherwise have an appropriate Federal financial 18 regulator under subparagraph (A) through (D). 19 (4) BANKING terms ‘‘ap- 20 propriate Federal banking agency’’, ‘‘depository in- 21 stitution’’, and ‘‘depository institution holding com- 22 pany’’ have the meaning given those terms, respec- 23 tively, under section 3 of the Federal Deposit Insur- 24 ance Act. g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 DEFINITIONS.—The 15:49 Jul 12, 2019 Jkt 000000 (739953 11) PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM G:\CMTE\FS\16\MISC\TGS.XML 5 1 (5) COMMODITIES terms 2 ‘‘commodity pool operator’’, ‘‘commodity trading ad- 3 visor’’, and ‘‘futures commission merchant’’ have the 4 meaning given those terms, respectively, under sec- 5 tion 1a of the Commodity Exchange Act. 6 (6) CREDIT UNION.—The term ‘‘credit union’’ 7 means a Federal credit union or a State credit 8 union, as such terms are defined, respectively, under 9 section 101 of the Federal Credit Union Act. 10 (7) DIGITAL ASSET.—The term ‘‘digital asset’’ 11 means an asset that is issued and transferred using 12 distributed ledger or blockchain technology, includ- 13 ing, so-called ‘‘virtual currencies’’, ‘‘coins’’, and ‘‘to- 14 kens’’. 15 16 (8) FINANCIAL INSTITUTION.—The term ‘‘fi- nancial institution’’ means— 17 (A) an alternative trading system; 18 (B) a branch or agency of a foreign bank, 19 as defined in section 1(b) of the International 20 Banking Act of 1978; 21 (C) a broker; 22 (D) a commodity pool operator; 23 (E) a commodity trading advisor; 24 (F) a credit union; 25 (G) a dealer; g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 DEFINITIONS.—The 15:49 Jul 12, 2019 Jkt 000000 (739953 11) PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM G:\CMTE\FS\16\MISC\TGS.XML 6 1 (H) a depository institution; 2 (I) a depository institution holding com- 3 pany; 4 (J) a futures commission merchant; 5 (K) an investment adviser; 6 (L) an investment company; 7 (M) a national securities exchange; 8 (N) an organization operating under sec- 9 tion 25 or 25A of the Federal Reserve Act; 10 (O) a private fund; 11 (P) a State-licensed money services busi- 12 ness; and 13 (Q) any company engaged in activities that 14 are financial in nature or incidental to a finan- 15 cial activity, as described in section 4 of the 16 Bank Holding Company Act of 1956. 17 (9) LARGE UTILITY.—The term 18 ‘‘large platform utility’’ means a technology com- 19 pany— 20 (A) with an annual global revenue of 21 $25,000,000,000 or more; and 22 (B) that is predominately engaged in the 23 business of offering to the public an online mar- 24 ketplace, an exchange, or a platform for con- 25 necting third parties. g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 PLATFORM 15:49 Jul 12, 2019 Jkt 000000 (739953 11) PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM G:\CMTE\FS\16\MISC\TGS.XML 7 1 (10) MONEY term 2 ‘‘money services business’’ has the meaning given 3 that term under section 1010.100 of title 31, Code 4 of Federal Regulations. 5 (11) PRIVATE FUND.—The term ‘‘private fund’’ 6 has the meaning given that term under section 7 202(a) of the Investment Advisers Act of 1940. 8 (12) SECURITIES DEFINITIONS.—The terms 9 ‘‘broker’’, ‘‘dealer’’, ‘‘investment adviser’’, ‘‘invest- 10 ment company’’, and ‘‘national securities exchange’’ 11 have the meaning given those terms, respectively, 12 under section 3 of the Securities Exchange Act of 13 1934. g:\VHLC\071219\071219.257.xml July 12, 2019 (3:49 p.m.) VerDate Mar 15 2010 SERVICES BUSINESS.—The 15:49 Jul 12, 2019 Jkt 000000 (739953 11) PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 C:\USERS\MWBARKSDALE\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\TGS.XM