If this proposal were to become law, businesses would have the legal right to negotiate an enforceable compliance agreement with specific departments or offices inside the federal financial regulatory agencies. In the event that such an agreement was reached, it would clear the path for more regulatory action.
Rep. Patrick McHenry of North Carolina, who is currently the ranking member of the House Financial Services Committee and will chair the committee beginning in January, has reintroduced legislation with the intention of establishing innovation offices within government agencies that deal with financial services.
In a statement that was released on December 19, 2018, McHenry stated that he has reintroduced the Financial Services Innovation Act, which is a piece of legislation that he had previously lobbied for in 2016 and 2019.
The legislation was enacted with the intention of establishing, within the framework of the federal financial institutions that already existed, offices that would be able to assist innovators in the United States, including those working with cryptocurrencies and blockchain technology, in finding a way to comply with the regulations that were in place at the time. This was the primary objective of the legislation.
According to McHenry, companies have the authority to apply for an enforceable compliance agreement with the offices of regulatory bodies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission. An agreement of this kind would make it feasible for firms to move forward in a lawful manner without being hampered by antiquated or too onerous restrictions, which would be a significant benefit to these companies.
He stated that the law had been fashioned after the regulatory sandbox program that was already in operation in the state of North Carolina.
There have been earlier statements made by various government agencies, most notably the Office of the Comptroller of the Currency, regarding their ambitions to construct innovation offices that would specialize on fintech. These announcements have occurred in the past.
The Securities and Exchange Commission (SEC) established the Strategic Hub for Innovation and Financial Technology in 2018, and it is more commonly referred to as FinHub. In 2020, the center will transition into an independent agency.