Texas Senate Bill SB860

Texas 2019 - 86th Regular

Caption

Relating to the creation of a regulatory sandbox program administered by the attorney general for certain financial products and services; authorizing a fee.

Impact

The bill impacts existing state laws by creating exemptions for specified financial products and services during the test phase. Participants in the program are permitted to offer specific products like consumer loans, money transmission services, and retail installment transactions to residents without acquiring the standard licenses. However, these offerings are subject to various caps and disclosure requirements to ensure consumer protection. This regulatory framework aims to strike a balance between enabling innovation while safeguarding consumer interests in the financial sector.

Summary

Senate Bill 860 establishes a regulatory sandbox program administered by the Texas Attorney General aimed at fostering innovation within the financial services sector. The program allows certain businesses to test innovative financial products and services without having to obtain the conventional licenses or regulatory authorizations that typically govern such activities. This initiative is designed to promote the development of new financial solutions by creating a more flexible regulatory environment for startups and established companies alike, allowing them to experiment and adapt their offerings in the Texas market.

Contention

Despite its intentions, SB 860 has generated discussions over potential risks associated with deregulated testing. Critics argue that allowing companies to bypass traditional regulatory frameworks could lead to consumer exploitation or financial mishaps. Further concerns include the adequacy of the consumer protection mechanisms put in place and the ability of the Attorney General’s office to effectively monitor and regulate participants in this sandbox. As state legislators debate these issues, the future of innovation in Texas' financial law landscape could hinge on how these tensions are resolved.