Consumer Financial Protection Accountability and Reform Act of 2026

(f) Supervisory election for covered institutions

(1) Election to remain under prudential supervision

(A) In general. Notwithstanding subsection (a), an insured depository institution or insured credit union described in such subsection may elect to be subject to the requirements under section 1026 instead of this section by notifying the Bureau and the appropriate prudential regulator of such election.

(B) Automatic election for certain institutions. A covered person who becomes an insured depository institution or insured credit union described under subsection (a) after the date of enactment of this subsection shall be deemed to have made the election described in subparagraph (A).

(2) Petition for Bureau supervision

(A) In general. With respect to an insured depository institution or insured credit union that has made the election under paragraph (1), the Bureau may petition the appropriate prudential regulator for the insured depository institution or insured credit union to terminate such election if the Bureau determines, and notifies the appropriate prudential regulator in writing, that—

(i) the insured depository institution or insured credit union presents heightened risks of substantial injury to consumers; and

(ii) the appropriate prudential regulator has failed to adequately assess or address compliance with Federal consumer financial law.

(B) Response to petition. Not later than 60 days after receiving a petition under subparagraph (A), the appropriate prudential regulator shall—

(i) approve the petition; or

(ii) deny the petition in writing and include with such denial a detailed explanation of the reasons for such denial.

(C) Appeal of denial. If the appropriate prudential regulator denies a petition under subparagraph (B)(ii), the Bureau may appeal such denial to the Financial Stability Oversight Council, which may, upon a vote of not fewer than two-thirds of the voting members then serving, approve the petition.

(3) Backup enforcement authority of the Bureau. With respect to an insured depository institution or insured credit union that has made the election under paragraph (1), if the Bureau has referred a material violation of a Federal consumer financial law to the prudential regulator under section 1026(d)(2)(A) and the prudential regulator does not, before the end of the 120-day period beginning on the date of such referral, take an enforcement action with respect to such material violation, the Bureau may take an enforcement action against the insured depository institution or insured credit union with respect to such material violation.

(4) Exclusion for GSIBs. This subsection shall not apply to any affiliate of a global systemically important BHC, as such term is defined under section 217.402 of title 12, Code of Federal Regulations.