Yesterday Crowdfund Insider wrote about forthcoming legislation from Congressman Patrick McHenry that is designed to enhance Fintech innovation in the US. Today we have a copy of the draft bill, embedded below.
The 18 page document entitled the Financial Services Innovation Act of 2016 is set to create a Financial Services Innovative Office or FSIO within the multitude of US regulatory agencies that are engaged with financial services oversight and enforcement. The list of regulators is (embarrassingly) long:
- The Board of Governors of the Federal Reserve System
- The Bureau of Consumer Financial Protection (CFPB)
- Commodity Futures Trading Commission (CFTC)
- The Department of Housing and Urban Development (HUD)
- The Department of Treasury
- The Farm Credit Administration
- The Federal Deposit Insurance Corporation (FDIC)
- The Federal Housing Finance Agency
- The Federal Trade Commission (FTC)
- The National Credit Union Administration Board
- The Office of the Comptroller of the Currency (OCC)
- The Securities and Exchange Commission (SEC)
If enacted into law, each agency will be mandated to establish a FSIO and appoint a director to help empower Fintech innovation and coordinate with other FSIOs. The agencies will also be required to create a FSIO Liason Committee to consult and coordinate with the various FSIOs. The first Chair will be elected by the members.
Six months after the date of the enactment of this Act, and annually thereafter, each agency will submit a report to Congress and to the Financial Stability Oversight Council, and shall present testimony to Congress, on the activities of the FSIO, including a description of the petitions considered, the rationale for acceptance or rejection of petitions, and the efforts of the FSIO to encourage financial innovations.
The Financial Stability Oversight Council shall also be required to submit an annual report to Congress on the overall impact.
In brief, the bill seeks to help Fintech entrepreneurs and startups navigate their way through the byzantine labyrinth of regulatory agencies and rules. While common sense says just rationalize and eliminate many of these overlapping regulatory bureaucracies the political reality is once created they are quite hard to remove. This bill may be the best bet the US has to reinvigorate Fintech innovation and help maintain US dominance as a financial center. Unfortunately, coordinating across financial regulatory agencies is akin to managing warlords fearful of losing their empires. The next question is will McHenry be able to rally the bipartisan support to turn a bill into law.
This one is developing…
Read the bill below