PACE Act of 2026

Key Points

• The bill creates a federal registration system for large payment service providers. Companies holding at least 40 state money transmitter licenses, a depository institution charter, or a credit union charter can register with the Comptroller of the Currency to operate nationwide under one set of rules.
• To protect customers, registered providers must hold reserves equal to 100% of what they owe users, backed by safe assets like cash, Federal Reserve balances, and short-term Treasury bills. Customer money cannot be mixed with company funds or used for the company's own investments.
• Registered payment companies can apply for direct access to Federal Reserve payment systems like Fedwire, FedNow, and FedACH. If the Fed does not act on a request within 180 days, access is automatically approved, giving these companies the same payment infrastructure banks use.
• The bill bans registered providers from denying service or closing accounts based on a person's political views, beliefs, or affiliations. All business decisions about payment services must be based on objective, individualized risk assessments.
• If a nonbank registered provider becomes insolvent, it cannot use regular bankruptcy court. Instead, state regulators or the Comptroller handle the process, and customers get paid back before other creditors, right after administrative expenses.
• Balances held with registered providers are explicitly excluded from the definition of 'security' under major federal securities laws, meaning these companies would not face SEC regulation as securities issuers for holding customer money.