A unanimous vote at NC House means a “regulatory sandbox” bill is on its way for Governor Roy Cooper. The new “sandbox” would remove some barriers for a trial period for booming financial and insurance products and services.
The 111-0 vote Thursday in the State House followed a 49-0 vote Wednesday in the Senate.
“By setting up a regulatory sandbox, we can signal to a growing group of entrepreneurs that North Carolina is committed to fintech innovation,” Jordan Roberts, government affairs associate for the John Locke Foundation, said in comments to the House Finance Committee when the bill was introduced in June.
Bill 624 would create a regulatory sandbox similar to that allowed in Arizona in 2018. At least five other states have since passed similar laws, and half a dozen are considering such bills this year in an effort to remain nimble and competitive in a increasingly digital world.
“The idea originated in the UK in 2014, specifically for fintech companies,” said Jon Sanders, Locke’s principal researcher in regulatory studies. “In 2018, it was considered a huge success, and regulatory sandboxes started to appear around the world (Singapore, Abu Dhabi, Denmark, Hong Kong, etc.) as well as in the United States (Arizona, Utah and Wyoming). South Korea built its regulatory sandbox for every industry, and Utah, whose regulatory sandbox started with finance and insurance, has done the same. “
HB 642 would only apply to the finance and insurance industries in North Carolina. Among other changes, the bill create a new Innovation Council to market the program and research and review applications. The board would assess applications based on the level of innovation, potential risks to consumers, level of consumer protection and complaint resolutions in place, and level of business plan and capital. It would then make recommendations and forward them to the state agencies ultimately responsible for the final decision.
“This bill would maintain North Carolina as a regional and national leader for business by encouraging companies with innovative financing and insurance products to test them right here in North Carolina,” Roberts said in a statement. interview. “The sandbox approach ensures the right balance between choice and consumer protection. “