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House approves fintech regulatory sandbox to be run by Department of Commerce
Summary
The House passed Second Substitute HB 378 to create a fintech regulatory sandbox administered by the Department of Commerce, shortening certain extension periods and allowing supervised two-year testing with consumer protections; the bill passed 70-0 and moves to the Senate.
The Utah House on March 4 approved Second Substitute House Bill 378, establishing a fintech regulatory sandbox administered by the Department of Commerce that allows financial-technology firms to test products under certain waived regulatory requirements and monitoring.
Representative Roberts, sponsor, said the substitute moves program control from GoEd to the Department of Commerce and shortens an extension period from one year to six months. "This bill creates a regulatory sandbox, specifically a fintech regulatory sandbox," Roberts said on the floor, describing the program as a supervised testing environment designed to let innovators test products before committing capital and seeking full licensure.
Under the bill sponsors described, an applicant would apply to the Department of Commerce and its Division of Financial Institutions; admitted firms could operate under limited exemptions for a specified period (sponsors described a two-year trial period) while the department monitors consumer protections and market fit. Roberts cited other states and nations that have enacted similar sandboxes and argued it helps Utah entrepreneurs compete for fintech venture capital.
The House adopted a motion to move to the second substitute and then passed the bill on a recorded vote of 70-0. The bill will be transmitted to the Senate for further consideration.
Provenance: floor remarks and vote recorded March 4, 2019 (House floor segments on HB 378).
