Bill Would Bring ‘Sandbox’ Regulatory Program for Fintech Innovation

September 22, 2016

On Thursday, September 22, 2016, Rep. Patrick McHenry (R-NC) introduced a bill to create a ‘sandbox’ regulatory program similar to one in the United Kingdom to keep the U.S. from losing financial innovators.  The U.K. program gives firms the ability to test new fintech products or services alongside a regulator.  The newly proposed bill would require many U.S. federal agencies, including the Department of Treasury, Federal Reserve Board, and Securities and Exchange Commission, to develop an internal “Financial Services Innovation Office” to aid companies seeking to test a new product. These agencies, along with others already equipped with innovation teams, will be required to formalize the process, share data and report to Congress. While not expected to pass Congress this year, the bill initiates the fintech regulation discussion on Capitol Hill. CBA will continue to monitor this legislation and update members on progress.