PACE Act of 2026

Enhanced Consumer Protection via Reserves: Registered covered providers must maintain reserves backing outstanding payment obligations on at least a 1 to 1 basis, using highly liquid assets like U.S. currency or Treasury bills (Section 4(a)(1)). This ensures that people's money is backed by reliable assets.

Asset Segregation: For providers offering access or custody services, the bill requires that monetary value be segregated and separately accounted for, preventing it from being commingled with the provider's own assets (Section 4(a)(3)).

Fair Access to Services: The bill mandates that providers cannot deny access to payment services or cancel accounts based on an individual's constitutionally or statutorily protected beliefs, affiliations, or political views (Section 5(b)(2)-(3)).

Objective Business Decisions: Providers are required to make business decisions regarding payment services based on "individualized, objective, and risk-based analyses" (Section 5(b)(4)).

Priority for Customers in Insolvency: In the event of a nonbank provider's liquidation, the bill establishes a priority order where "outstanding payment obligations to customers" are paid before other general or senior liabilities (Section 8(d)(2)).

Regulatory Burden on Providers: The bill subjects registered covered providers to various regulations, including capital, liquidity, and risk management standards (Section 5(a)), as well as examinations by the Comptroller (Section 6(a)).

Compliance Requirements: Providers must adhere to specific recordkeeping standards, such as maintaining beneficial ownership records for access or custody services (Section 4(b)(2)).

Potential for Abrupt Service Changes: The Board of Governors has the authority to issue directives that act as cease and desist orders against providers in "unusual and exigent circumstances" (Section 9(c)(1)).