Approval of Subsidiaries of Insured Depository Institutions and Federal Qualified Payment Stablecoin Issuers
Section 5 · Sec. 5 ·
What this chapter is about
This part says how a firm asks to make these coins. A federal watchdog takes the request. It weighs five things. It has 120 days to answer. A no must come with reasons. The firm may ask for a hearing.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“receive, review, and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity, Federal branch, or uninsured national bank that is chartered by the Comptroller pursuant to title LXII of the Revised Statutes, and that seeks to issue payment stablecoins as a Federal qualified payment stablecoin issuer”
Subsection (a)(1). Alongside the duty to take applications, subparagraph (B) requires each regulator to establish a process and framework for the licensing, regulation, examination and supervision of these entities that prioritizes their safety and soundness. Under paragraph (3), a regulator that receives a substantially complete application must evaluate it and make a determination on the criteria established under the Act.
What the document actually says
“receive, review, and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity, Federal branch, or uninsured national bank that is chartered by the Comptroller pursuant to title LXII of the Revised Statutes, and that seeks to issue payment stablecoins as a Federal qualified payment stablecoin issuer”
That sentence, in plain words
Each federal watchdog must take in requests. It must read them. It must weigh them for approval. Banks and other firms may all apply.
What this is about
A bank applies for an arm that will make coins. Firms that are not banks apply for themselves. Each watchdog must set up a way to handle this work.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“The primary Federal payment stablecoin regulators shall, before the date described in section 13-- (A) issue regulations consistent with that section to carry out this section; and (B) pursuant to the regulations described in subparagraph (A), accept and process applications described in paragraph (1).”
Subsection (a)(2). Both duties fall before the date in section 13, which is one year after the date of enactment. The applications are to be accepted and processed under the regulations the same paragraph requires.
What the document actually says
“The primary Federal payment stablecoin regulators shall, before the date described in section 13-- (A) issue regulations consistent with that section to carry out this section; and (B) pursuant to the regulations described in subparagraph (A), accept and process applications described in paragraph (1).”
That sentence, in plain words
The watchdogs must act before one set date. They must write the rules for this part. Then they must take in and work through requests.
What this is about
Part 13 sets that date at one year after the law passed. The law passed on July 18, 2025. So the date is in July 2026.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“(1) The ability of the applicant (or, in the case of an applicant that is an insured depository institution, the subsidiary of the applicant), based on financial condition and resources, to meet the requirements set forth under section 4. (2) Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant.”
Subsection (c). The five factors are the applicant's ability to meet the section 4 requirements based on financial condition and resources; whether a person convicted of one of the named felonies serves as an officer or director; the competence, experience and integrity of the officers, directors and principal shareholders of the applicant, its subsidiaries and parent company, including their compliance record and their ability to fulfill commitments and conditions; whether the redemption policy meets the standards under section 4(a)(1)(B); and any other factors the regulator establishes that are necessary to ensure safety and soundness.
What the document actually says
“(1) The ability of the applicant (or, in the case of an applicant that is an insured depository institution, the subsidiary of the applicant), based on financial condition and resources, to meet the requirements set forth under section 4. (2) Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant.”
That sentence, in plain words
First the watchdog asks if the firm can meet the rules in part four. It looks at the firm's money and means. Then it asks if a felon is an officer or on the board.
What this is about
Three more things are weighed. One is how able and honest the leaders are. One is the plan for paying holders back. The last is anything else that goes to safety.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“Not later than 120 days after receiving a substantially complete application under subsection (a), a primary Federal payment stablecoin regulator shall render a decision on the application.”
Subsection (d)(1). An application is substantially complete if it contains enough information for the regulator to decide whether the applicant satisfies the factors in subsection (c). Within 30 days of receiving an application the regulator must tell the applicant whether it considers the application substantially complete and, if not, what more is needed. An application that is substantially complete stays so unless a material change in circumstances requires it to be treated as a new application.
What the document actually says
“Not later than 120 days after receiving a substantially complete application under subsection (a), a primary Federal payment stablecoin regulator shall render a decision on the application.”
That sentence, in plain words
The watchdog has 120 days to answer. The clock starts when the request is full enough to judge.
What this is about
Within 30 days the watchdog must say if the request is full enough. If it is not, it must say what is missing. A big change can restart the clock.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“A primary Federal payment stablecoin regulator shall only deny a substantially complete application received under subsection (a) if the regulator determines that the activities of the applicant would be unsafe or unsound based on the factors described in subsection (c).”
Subsection (d)(2)(A). Clause (ii) adds that the issuance of a payment stablecoin on an open, public or decentralized network is not a valid ground for denial.
What the document actually says
“A primary Federal payment stablecoin regulator shall only deny a substantially complete application received under subsection (a) if the regulator determines that the activities of the applicant would be unsafe or unsound based on the factors described in subsection (c).”
That sentence, in plain words
There is one reason to turn a firm down. The watchdog must find the firm's work would be unsafe. It must base that on the five things named earlier.
What this is about
The law names one more thing that is not a reason. A maker may put its coins on an open network. That alone cannot be held against it.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“not later than 30 days after the date of such denial, the regulator shall provide the applicant with written notice explaining the denial with specificity, including all findings made by the regulator with respect to all identified material shortcomings in the application, including actionable recommendations on how the applicant could address the identified material shortcomings.”
Subsection (d)(2)(B). Three things go in the notice: the explanation with specificity, all findings on identified material shortcomings, and actionable recommendations on how those shortcomings could be addressed.
What the document actually says
“not later than 30 days after the date of such denial, the regulator shall provide the applicant with written notice explaining the denial with specificity, including all findings made by the regulator with respect to all identified material shortcomings in the application, including actionable recommendations on how the applicant could address the identified material shortcomings.”
That sentence, in plain words
A no must come in writing within 30 days. It must say just what was wrong. It must also say how the firm could fix it.
What this is about
The watchdog must list what it found. Vague reasons are not enough. The advice has to be something the firm can act on.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “can”Who acts: denied applicantsHow: statuteSec. 5 in the PDF
What the document says
“Not later than 30 days after the date of receipt of any notice of the denial of an application under this section, the applicant may request, in writing, an opportunity for a written or oral hearing before the primary Federal payment stablecoin regulator to appeal the denial.”
Subsection (d)(2)(C). On a timely request the regulator must set a time no later than 30 days out and a place at which the applicant may appear, in person or through counsel, to submit written materials or give oral testimony and argument. A final determination with a statement of its basis and specific findings is due within 60 days of the hearing. If no timely request is made, the regulator must notify the applicant within 10 days that the denial is final.
What the document actually says
“Not later than 30 days after the date of receipt of any notice of the denial of an application under this section, the applicant may request, in writing, an opportunity for a written or oral hearing before the primary Federal payment stablecoin regulator to appeal the denial.”
That sentence, in plain words
A firm told no has 30 days to ask for a hearing. It must ask in writing. The hearing can be on paper or in person.
What this is about
The hearing must be set within 30 days of that ask. The firm may bring a lawyer. The answer is due 60 days after the hearing.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: CongressHow: statuteSec. 5 in the PDF
What the document says
“If a primary Federal payment stablecoin regulator fails to render a decision on a complete application within the time period specified in paragraph (1), the application shall be deemed approved.”
Subsection (d)(3). The time period in paragraph (1) is 120 days from receipt of a substantially complete application. Under paragraph (4), a denial does not stop an applicant from filing a later application.
What the document actually says
“If a primary Federal payment stablecoin regulator fails to render a decision on a complete application within the time period specified in paragraph (1), the application shall be deemed approved.”
That sentence, in plain words
The watchdog may run out of time. If it does, the request counts as approved.
What this is about
The limit is 120 days. Silence works in the firm's favor here. A firm turned down may also just apply again.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“(1) notify Congress upon beginning to process applications under this Act; and (2) annually report to Congress on the applications that have been pending for 180 days or more since the date the initial application was filed and for which the applicant has been informed that the application remains incomplete”
Subsection (e). The annual report is to include documentation on the status of those applications and why they have not yet been approved. It covers applications pending for 180 days or more where the applicant has been told the application remains incomplete.
What the document actually says
“(1) notify Congress upon beginning to process applications under this Act; and (2) annually report to Congress on the applications that have been pending for 180 days or more since the date the initial application was filed and for which the applicant has been informed that the application remains incomplete”
That sentence, in plain words
Each watchdog must tell Congress when it starts taking requests. Each year it must report on the slow ones. Those are the ones waiting 180 days or more.
What this is about
The report covers requests the watchdog called short of full. It must show where each one stands. It must say why none of them is cleared yet.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “can”Who acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says
“The primary Federal payment stablecoin regulators may waive the application of the requirements of this Act for a period not to exceed 12 months beginning on the effective date of this Act”
Subsection (f). The waiver reaches two cases: a subsidiary of an insured depository institution where the institution has an application pending for that subsidiary on the effective date, and a Federal qualified payment stablecoin issuer with a pending application on that date. Section 20 sets the effective date.
What the document actually says
“The primary Federal payment stablecoin regulators may waive the application of the requirements of this Act for a period not to exceed 12 months beginning on the effective date of this Act”
That sentence, in plain words
A watchdog may hold this law back for up to a year. The year starts on the day the law takes effect.
What this is about
This is for firms whose request is already in. Their case has not been settled yet. Part 20 sets the day the law starts to bite.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: CongressHow: statuteSec. 5 in the PDF
What the document says
“The provisions of this section supersede and preempt any State requirement for a charter, license, or other authorization to do business with respect to a Federal qualified payment stablecoin issuer or subsidiary of an insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer.”
Subsection (h). The preemption is limited: nothing in the subsection preempts or supersedes a State's authority to charter, license, supervise or regulate a depository institution or credit union chartered in that State, or to supervise a subsidiary of such an institution that is approved under this section.
What the document actually says
“The provisions of this section supersede and preempt any State requirement for a charter, license, or other authorization to do business with respect to a Federal qualified payment stablecoin issuer or subsidiary of an insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer.”
That sentence, in plain words
A state may not demand its own license from these firms. That holds for a federal maker. It also holds for a bank arm cleared under this part.
What this is about
States keep their power over banks they charter. They may still watch a bank arm that makes coins. What they lose is the extra license step.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: permitted payment stablecoin issuersHow: statuteSec. 5 in the PDF
What the document says
“Not later than 180 days after the approval of an application, and on an annual basis thereafter, each permitted payment stablecoin issuer shall submit to its primary Federal payment stablecoin regulator, or in the case of a State qualified payment stablecoin issuer its State payment”
Subsection (i)(1). The sentence continues that the issuer submits to its regulator a certification that it has implemented anti-money laundering and economic sanctions compliance programs reasonably designed to prevent it from facilitating money laundering, in particular for cartels and organizations designated as foreign terrorist organizations under section 219 of the Immigration and Nationality Act (8 U.S.C. 1189), and the financing of terrorist activities. Regulators must make the certifications available to the Secretary of the Treasury on request. A regulator may revoke an issuer's approval if the certification is not submitted, and a person who knowingly submits a false one is subject to the criminal penalties in section 1001 of title 18, United States Code.
What the document actually says
“Not later than 180 days after the approval of an application, and on an annual basis thereafter, each permitted payment stablecoin issuer shall submit to its primary Federal payment stablecoin regulator, or in the case of a State qualified payment stablecoin issuer its State payment”
That sentence, in plain words
A cleared maker has 180 days to send in a paper. After that it sends one every year. It goes to the watchdog that cleared it.
What this is about
The paper says the maker has set up checks for dirty money. Miss it and the clearance can be pulled. Lie on it and it is a crime.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section requires: the duty to receive and consider applications and to build a licensing framework, the rules and the deadline for accepting applications, the five factors, the 120 day decision, the one ground for denial and the network carve out, the written explanation, the hearing and the final determination, the deemed approval when a regulator does not decide, the reports to Congress, the safe harbor for pending applications, the preemption of State licensing, and the annual anti-money laundering certification with its penalties.
The right to reapply after a denial and the notice owed when no hearing is requested are recorded in the summaries rather than as separate proposals, because they follow from the paragraphs already recorded.
The section names section 13 for the rulemaking deadline and title LXII of the Revised Statutes for the charter of an uninsured national bank. Neither the Revised Statutes nor the Federal Deposit Insurance Act is indexed on this site, so what they require is not recorded here.
