Virginia House Bill HB922

Virginia 2022 Regular Session

• Introduced: 1/12/22
• Refer: 1/12/22

Caption

Virginia FinTech Regulatory Sandbox Program; created.

Impact

The Bill sets forth a structured framework for the approval and participation of businesses within the sandbox. Participants must apply for admission and demonstrate their readiness to comply with the regulations established under the program. The initial test period for financial products is limited to 24 months, although this may be extended depending on circumstances. The bill emphasizes the need to protect consumers who might be using these new services, mandating succinct disclosures about risks and the nature of the testing process.

Summary

House Bill 922, known as the Virginia FinTech Regulatory Sandbox Program, aims to create an environment where financial technology (FinTech) firms can test their products and services in a controlled setting. This program will allow participants to operate without the usual licensing requirements in the Commonwealth, effectively lowering the barriers to entry for innovative financial products. The program is designed to promote innovation in the financial sector while ensuring that there are necessary consumer protections in place.

Conclusion

Overall, HB 922 represents an effort by the state of Virginia to stay competitive in the rapidly evolving FinTech landscape. By establishing a regulatory sandbox, the state hopes to attract new businesses and foster growth, while balancing the need for consumer safety and innovation. The ongoing discussions surrounding the bill reflect a broader debate on the role of regulation in encouraging or stifling business development in the financial sector.

Contention

While supporters of HB 922 view it as a significant step towards fostering innovation in financial services, critics argue that the program could present risks to consumers due to the relaxed regulatory environment. Concerns have been raised regarding the potential for consumer harm if companies do not adhere to consumer protections or if there are failures in the financial products during testing. Additionally, the bill allows the program's governing commission to remove participants at any time for reasons of misconduct, raising questions about the adequacy of oversight.