HFS Chair McHenry Reintroduces Bill to Establish "Financial Services Innovation Offices"

House Financial Services Committee ("HFS") Chair, Patrick McHenry (R-NC) reintroduced a bill to "promote innovation in financial services" by establishing Financial Services Innovation Offices (FSIO) across various agencies.

In an HFS release, Mr. McHenry asserted that "[b]udding fintech firms currently operate in fear of heavy-handed penalties brought down by regulators that have failed to work with Congress to provide clear rules of the road." Mr. McHenry said that the proposed "legislation will give entrepreneurs an opportunity to test legal and regulatory waters before taking new products and services to market."

The Financial Services Innovation Act would, among other things:

• require federal regulators to create Financial Services Innovation Offices (FSIOs) within their agencies;
• require each agency to coordinate with FSIOs at other agencies to share data about financial innovations and, upon request, provide this information to the public;
• require each agency to establish procedures to offer financial innovation to the public and enable greater access to the public;
• require each agency to annually present testimony to Congress and submit a report on the activities of the FSIO;
• allow companies to apply for an "enforceable compliance agreement" with FSIOs that, if accepted, will allow them to provide an innovative product or service under an alternative compliance plan;
• establish a FSIO Liaison Committee tasked with coordination and oversight of each agency, ensuring agencies share information on petitions, monitor developments and facilitate collaboration;
• require that the Chair of the FSIO Liaison Committee present testimony to Congress on the activities of the Committee.