The District of Columbia announced Feb. 14 the launch of a 21-member council to explore ways to attract fintech companies and financial services innovation to the nation’s capital.
One of the proposals put forth by Mayor Muriel Bowser (D) is to explore a regulatory sandbox for financial services companies to test out new technologies, products or services under the District’s supervision without fear of enforcement or certain licensing requirements.
“We want the District on the cutting edge—utilizing the intersection of technology and financial services to benefit our residents and businesses,” Stephen C. Taylor, Commissioner of the District of Columbia Department of Insurance, Securities and Banking, said in a news release.
The District is looking to the U.K. sandbox model to encourage new market entrants, according to the release. It also wants to make use of regulatory technology to streamline its own operations.
The council’s other initiatives will include studying how fintech and sandboxes may improve or harm consumers’ lives and how to remove barriers to technological innovation.
Taylor and Acting District Chief Technology Officer Lindsey Parker will lead the council. The remaining members will be appointed by the mayor with priority given to Washington residents or companies, Taylor told Bloomberg Law in a Feb. 14 interview. Council members are intended to represent a cross section of industries, including securities, banking, and technology as well as consumer advocates. The group will have to report back on its findings within six months of its first meeting. Taylor said he anticipated an initial council meeting in March.
Arizona became to the first state to launch a fintech sandbox program in 2018 and the Consumer Financial Protection Bureau is developing a federal program. However, many states remain skeptical of such programs due to concerns about potential harm to consumers if regulations or other requirements are relaxed.
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(updates with details on council composition and timeline)