A House bill has been intended in order to keep U.S. from losing financial innovators and business to Britain after U.K. rolled out its fintech ‘sandbox’ program.
According to reports by WSJ, a bill was introduced by Rep. Patrick McHenry that would mirror the U.K. fintech sandbox. The bill would require several federal agencies including the Treasury Department, the Federal Reserve Board and the Securities and Exchange Commission in order to develop an internal ‘fintech innovation office’ where companies will have the opportunity to seek help in testing.
“This is where innovators want to be and it’s only regulation that’s driving them offshore. This [bill] would, in many ways, would force regulators to be much more attuned to what’s happening in the marketplace,” Mr. McHenry, a top Republican on the House Financial Services Committee, told The Wall Street Journal.
There are many fintech companies that favor a ‘sandbox’ approach in the United States. These firms raise concerns regarding the creation of a more fragmented regulatory system in case; each company has its own innovation office.
“The Commerce Department is in a really unique position where their charter is to help drive GDP and commerce in the United States,” said Mr. Wallace, speaking generally about a sandbox approach at the FinTech Forum in Silicon Valley on Wednesday, before the bill was introduced. “At least in the interactions I’ve had with them, they absolutely understand, appreciate and recognize the necessity to help the innovation economy because it helps the economy overall.”
The federal agencies will have 60 days to identify a minimum of three areas of existing regulation which would apply to financial innovation after the bill is enacted. The agencies will also have to develop certain methods that would reduce the time and costs associated to test a product.
