What changed between these versions
A substantive modification to the bill's findings and a minor addition to reporting requirements. v2 rephrases a finding on technology procurement risks and introduces two new findings emphasizing the need for agencies to leverage new technologies for effective prudential supervision, consumer protection, and Bank Secrecy Act compliance. Additionally, v2 expands the scope of the required report to include risk management practices for contractors and third-party technologies.
Overview
A handful of changes across two sections, primarily in the 'Findings' section and one specific reporting requirement. · v2 expands the stated rationale and scope of the bill's purpose, particularly in the 'Findings' section, and slightly clarifies and expands reporting requirements.
The most significant changes occur in Section 2, 'Findings,' where v2 adds two new findings that broaden the stated purpose of enhancing supervisory technologies to include consumer protection and Bank Secrecy Act compliance, beyond just prudential supervision. It also rephrases an existing finding on technology procurement risks and removes a general statement about leveraging technology. A minor modification in Section 3(b)(3)(B) expands the reporting requirements for agencies to include risk management practices for contractors and third-party technologies.
Major additions
This new finding emphasizes that agencies must leverage new technologies to ensure effective and sustainable prudential supervision in the digital age, which is necessary to preserve a safe and sound banking system.
It explicitly states the core purpose of technology enhancement as maintaining a safe and sound banking system through effective prudential supervision, providing a clearer legislative intent for the bill's requirements.
This new finding asserts that new technological tools are also essential for agencies to fulfill mandates beyond prudential supervision, specifically mentioning consumer protection and monitoring Bank Secrecy Act (BSA) compliance.
This significantly broadens the scope of the bill's underlying rationale, indicating that technology upgrades are not only for traditional banking oversight but also for critical areas like consumer welfare and anti-money laundering efforts.
Deletions
This finding stated that 'Supervisory regulators should leverage technologies to more effectively carry out their duties.'
While the sentiment of leveraging technology remains implicit and is expanded upon in new findings, the explicit statement that regulators *should* leverage technology is removed. This deletion is offset by the addition of more specific and actionable findings regarding the *necessity* of leveraging technology for specific mandates.
Modifications
This subtly shifts the tone from a direct requirement for risk management during updates to an acknowledgment of potential challenges. While agencies are still expected to manage risks, the explicit legislative directive in the findings is softened.
Before
Stated that 'When updating supervisory technology, risks surrounding technology procurement must be effectively managed.'
After
States that 'Risk surrounding technology procurement may present challenges for updating supervisory technology.'
Covered agencies are now required to provide additional detail in their reports to Congress, specifically outlining their risk management practices concerning contractors and any third-party technologies they utilize. This increases transparency and accountability regarding technology procurement and deployment.
Before
Required a description of 'the degree to which the covered agency relies on contractors to design, develop, or deploy technology and perform technology-related tasks.'
After
Requires the same description, 'and a description of related risk management practices for contractors and third-party technologies.'
Scope
Meaningful expansion or narrowing — Changes are concentrated in the 'Findings' section and a specific reporting requirement within the 'Technological Capabilities and Procurement Practices Assessment' section. — v2 represents a meaningful expansion of the stated policy direction by explicitly including consumer protection and Bank Secrecy Act (BSA) compliance as mandates requiring enhanced supervisory technologies, which were not explicitly mentioned in the findings of v1. — The changes to the findings primarily expand the stated rationale and justification for the bill's requirements, potentially influencing future interpretations or priorities without altering the core assessment and reporting mechanisms themselves. The modification to Section 3(b)(3)(B) directly expands the scope of information to be included in the required report.
Impact analysis
Covered Agencies (Board of Governors of the Federal Reserve System, Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, Department of the Treasury, Federal Housing Finance Agency, and National Credit Union Administration)
Procedural change (more detail in report) and expanded scope of responsibility/justification for technology investments.
Their reporting requirements are slightly expanded to include risk management practices for contractors and third-party technologies. The stated legislative rationale for their technology assessments now explicitly includes consumer protection and BSA compliance, broadening the scope of their mandated focus.