North Carolina Representative Patrick McHenry (current ranking member of the House Financial Services Committee) has reintroduced legislation that aims to create innovation offices within government agencies involved in financial services.
McHenry announced on Dec. 19 that he had introduced the Financial Services Innovation Act, a bill he previously supported in 2016 as well as 2019. This legislation was intended to create offices within federal financial institutions that could assist innovators, including those who deal with crypto and Blockchain. It also provides a pathway towards regulatory clarity in the United States.
McHenry suggested that companies could seek an “enforceable agreement of compliance” with agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission. This would provide a legal route forward without having to comply with “outdated or burdensome” regulations. He said the legislation was inspired by North Carolina’s regulatory program.
McHenry said, “It is crucial that our regulatory process works with financial innovation, rather than against it.” “My legislation will allow financial institutions and entrepreneurs to bring innovative products and services to market quicker, while keeping critical consumer protection safeguards. The Committee Republicans will continue their work towards a current regulatory framework that gives fintech companies clear rules on how to succeed.”
I am proud that I have reintroduced my bill to spur financial innovation, inclusion, and equity.
Financial Services Innovation Act uses the same model as North Carolina’s regulatory sandbox.
Other federal agencies such as the Office of the Comptroller of the Currency announced that they would open innovation offices with an emphasis on fintech. In 2018, the SEC created FinHub, a Strategic Hub for Innovation and Financial Technology. The center will be an independent office by 2020. Similar steps were taken by LabCFTC in 2019, the CFTC’s fintech unit.
California Representative Maxine Waters is the current chair of the House Financial Services Committee. McHenry will replace her in January, following Republican lawmakers winning majority control of the House of Representatives. Waters and McHenry have led many bipartisan efforts by the House Committee to address the collapse of crypto exchange FTX. Also, they have led potential legal actions against former CEO Sam Bankman Fried.