Rep. Patrick McHenry of North Carolina, who will take over as chair of the House Financial Services Committee in January, has reintroduced legislation that would establish innovation offices within governmental organisations that deal with financial services.
McHenry announced that he had reintroduced the Financial Services Innovation Act on December 19; he had previously championed the measure in 2016 and 2019. The legislation aimed to establish offices inside of already-existing federal financial institutions that could assist innovators, including those working with cryptocurrency and blockchain, on their way to regulatory clarity in the US.
McHenry claims that businesses could apply for a “enforceable compliance agreement” with the offices of organisations like the Securities and Exchange Commission and Commodity Futures Trading Commission, allowing for a legal path forward without “out-of-date or unduly burdensome” regulations. He claimed that the North Carolina regulatory sandbox programme had served as the inspiration for the legislation.
According to McHenry, “it’s crucial that our regulatory process works with financial innovation rather than against it. “My legislation will support financial institutions and business owners in bringing new goods and services to market more quickly while preserving essential consumer protection measures […] Republicans on the committee will keep pushing for an updated regulatory system that provides clear guidelines for success for fintech companies.
The Office of the Comptroller of the Currency and other federal agencies have already made announcements about their plans to launch innovation offices with a focus on fintech. The Strategic Hub for Innovation and Financial Technology, or FinHub, was established by the SEC in 2018, and an independent office will be established there in 2020. In 2019, LabCFTC, the CFTC’s fintech research division, took a similar action.
Maxine Waters, a representative from California, currently serves as the chairman of the House Financial Services Committee; McHenry will take over in January after Republican representatives won control of the chamber by a margin of 222 to 213. The House committee, led by Waters and McHenry, has made numerous efforts to address the failure of the cryptocurrency exchange FTX and potential legal action against former CEO Sam Bankman-Fried.