SPST - Pilot Programs - Amended SPST 2-20-20

SUPPORTING STATEMENT
INNOVATION PILOT PROGRAMS
(OMB Control No. 3064-NEW)

INTRODUCTION
The Federal Deposit Insurance Corporation (FDIC) is requesting approval from the Office of
Management and Budget (OMB) for a new information collection titled, “Innovation Pilot
Programs.” The FDIC seeks to continue its engagement and collaboration with innovators in the
financial, non-financial, and technology sectors to, among other things, identify, develop and
promote technology-driven innovations among community and other banks in a manner that
ensures the safety and soundness of FDIC-supervised and insured institutions. An innovation
pilot program framework can provide a regulatory environment in which the FDIC, in
conjunction with individual proposals collected from innovators, including banks, will provide
tailored regulatory and supervisory assistance, when appropriate, to facilitate the testing of
innovative and advanced technologies, products, services, systems, or activities.
A. JUSTIFICATION
1.

Circumstances and Need
The FDIC seeks to engage and collaborate with innovators in the financial, non-financial,
and technology sectors to, among other things, identify, develop and promote technologydriven innovations among community and other banks in a manner that ensures the safety
and soundness of FDIC-supervised and insured institutions. An innovation pilot program
framework will provide a regulatory environment in which the FDIC, in conjunction with
individual proposals collected from innovators, including banks, will provide tailored
regulatory and supervisory assistance, when appropriate, to facilitate the testing of
innovative and advanced technologies, products, services, systems, or activities.
While greater detail and the parameters of a planned innovation pilot program framework
will be separately announced at a later date, innovators (banks and firms in partnership
with banks) will be invited to voluntarily propose time-limited pilot programs, which will
be collected and considered by the FDIC on a case-by-case basis. Innovators may request
to participate by submitting proposals during a set time period for submissions.
Applicants will propose the design and parameters of the pilot program tests, as well as
any tailored regulatory and supervisory assistance needed from the FDIC. Collected
proposals will be assessed, prioritized and identified for testing, either on their own or as
part of a subject-area focused grouping of pilot programs.
Accepted pilot programs may be conducted and monitored concurrently with a number of
pilot programs selected in a given cohort with limited participants. Subject-area
groupings could include pilot programs that match a general theme or product area of
great promise or particular interest to the banking sector or the FDIC. This may be

announced in advance of the collection or afterwards if multiple pilot programs proposals
are found to share key attributes or defining characteristics (e.g., similar product concept;
banks of certain size; like customer focus).
Proposals will be collected from FDIC-supervised institutions (state-chartered banks and
savings institutions that are not members of the Federal Reserve System), who may
submit a pilot program proposal individually or together with companies that provide or
aim to provide technologically driven products, services, or systems through direct
contractual arrangements, partnerships, or joint ventures (this includes third-party service
providers). Proposals may also be collected from innovators that are not themselves
FDIC-supervised institutions and do not have a partnering institution but who may submit
a pilot program proposal; however, the nonbank will be eligible to receive only a
preliminary non-objection to its proposal conditioned on later submission (and collection)
of the proposal in partnership with an FDIC-supervised institution.
The collection will be limited by eligibility for consideration. FDIC-supervised
institutions that wish to participate in a pilot program must: (1) have a demonstrated
record of engaging in appropriate risk management; (2) be well-capitalized; (3) be wellrated for compliance and safety and soundness; and (4) not have significant pending
supervisory or enforcement actions (or significant regulatory investigations). Other firms
seeking to participate in a pilot program must: (1) be a U.S. domicile; (2) conduct all pilot
program banking activity (products and services) through an FDIC-supervised institution
partner; and (3) not involve persons who have been convicted of any criminal offense
involving dishonesty, breach of trust, or money laundering.
2.

Use of Information Collected
An innovation pilot program framework can provide a regulatory environment in which
the FDIC, in conjunction with individual proposals collected from innovators, including
banks, will provide tailored regulatory and supervisory assistance, when appropriate, to
facilitate the testing of innovative and advanced technologies, products, services, systems,
or activities.

3.

Use of Technology to Reduce Burden
Appropriate technology is used to minimize burden whenever possible.

4.

Efforts to Identify Duplication
Every effort will be made to avoid duplication.

5.

Minimizing the Burden on Small Entities

Small businesses or other small entities may be involved in these efforts but the FDIC
will take efforts to minimize the burden on them. Additionally, all collections will be
voluntary.
6.

Consequence of Less Frequent Collections
The frequency of collection is held to the absolute minimum.

7.

Special Circumstances
None.

8.

Consultation with Persons Outside the FDIC
The FDIC published a 60-day notice in the Federal Register on November 6, 2019
(84 FR 59808) seeking comments on this proposed information collection. No comments
were received.

9.

Payment or Gift to Respondents
None.

10.

Confidentiality
Any information deemed to be of a confidential nature would be exempt from public
disclosure in accordance with the provisions of the Freedom of Information Act (5 U.S.C.
552).

11.

Information of a Sensitive Nature
No questions of a sensitive nature are included in this collection.

12.

Estimate of Annual Burden
50 respondents x 60 hours = 3,000 hours.
This calculation assumes that an applicant/respondent will be comprised of a firm
partnering with a bank to submit its proposal, each having 3 employees (2 staff and 1
legal counsel) working 10 hours each on the proposal. This results in 6 employees per
applicant/respondent * 10 hours per employee = 60 hours per applicant/respondent.
Based on the FDIC’s observations of the market, it is estimated that roughly 50
applicants/respondents will submit proposals per year.

13.

Capital, Start-up, Operating and Maintenance Costs

None.
14.

Estimates of Annualized Cost to the Federal Government
None.

15.

Reason for Change in Burden
Not applicable. This is a new request for an information collection.

16.

Publication
General information about the FDIC’s pilot programming, including lessons learned, may
be published, but not particular details about any specific program piloted.

17.

Display of Expiration Date
Not applicable.

18.

Exceptions to Certification
None.

B. STATISTICAL METHODS
Not applicable.

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