Bill Overview
Title: Financial Services Innovation Act of 2022
Description: This bill addresses the regulation of financial products and services. Specifically, the bill allows persons intending to offer a financial innovation to petition specified financial regulatory agencies regarding existing areas of regulation. A petitioner may request a modification or waiver of an agency regulation. The bill sets forth requirements regarding the petition process, a safe harbor for petitioners from enforcement, and enforceable compliance agreements. Agencies must biannually publish a list of financial regulatory areas the agency would consider modifying or waiving through the petition process. The bill also establishes Financial Services Innovation Offices at these agencies to assist petitioners. These offices must also generally support the development of financial innovations and coordinate with other offices to share data.
Sponsors: Rep. McHenry, Patrick T. [R-NC-10]
Target Audience
Population: Individuals utilizing and offering financial products and services
Estimated Size: 250000000
- The bill impacts individuals and entities intending to offer financial innovations in the market by modifying regulations.
- Financial regulators and agencies will have to adapt their operations to accommodate the newly introduced petition process and innovation offices.
- Consumers of financial products could be indirectly impacted, as changes in regulations might lead to new financial innovations in the market.
- Given the potential for more rapid introduction of financial innovations, this bill may influence anyone who participates in financial markets globally.
Reasoning
- The Financial Services Innovation Act of 2022 is likely to primarily benefit those involved in the financial sector who seek to create new products or services by allowing them to petition for regulatory flexibility. This could include fintech companies, startups, and existing financial institutions seeking to innovate.
- Regulators will need to adapt and this may incur time and resource costs, which could affect their operations temporarily.
- End consumers or general participants in the financial market might see indirect effects if new financial products come to market. This could affect their wellbeing positively if these products offer better services or negatively if they lead to market instability.
- Given the broad scope of financial products and the large number of consumers in the US, the policy can potentially have minor to moderate indirect effects on a sizeable portion of the population.
- Due to the budget constraints, the direct impact may be limited to a targeted group of innovators and financial product providers initially, with broader impacts emerging as innovations are successfully launched.
Simulated Interviews
Fintech Startup Founder (San Francisco, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This policy could really help us navigate the regulatory environment more efficiently.
- I appreciate the potential for waiver requests as our innovations often challenge traditional regulatory constraints.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Finance Regulatory Attorney (New York, NY)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- The act may increase my workload as I assist clients through the petition process.
- It provides new business opportunities but also adds complexity to the current regulatory framework.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 4 | 5 |
Banking Sector Analyst (Boston, MA)
Age: 28 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 6/20
Statement of Opinion:
- New regulations could spur interesting trends in the financial sector that require analysis.
- I believe it might lead to an increased demand for financial analyses within the industry.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Community Bank Manager (Omaha, NE)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- I'm concerned about the implications for community banks like ours which may struggle to compete with new financial innovations facilitated by this policy.
- We're cautious about adopting too many changes that may overcomplicate existing operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 4 | 5 |
| Year 20 | 4 | 5 |
Retired, Former Financial Advisor (Phoenix, AZ)
Age: 65 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I’m interested in seeing how new financial products could impact my investments.
- Hopeful for the potential for positive returns but wary of increased market volatility.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Software Engineer in Banking (Chicago, IL)
Age: 31 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 4.0 years
Commonness: 5/20
Statement of Opinion:
- This act might lead to more projects involving new financial technologies, which is exciting for my work.
- Potential for growth in tech integration in banking is high.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Freelance Economist (Austin, TX)
Age: 37 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- This policy provides a unique opportunity to study and predict market behavior in response to regulatory changes.
- Eager to contribute insights on how these modifications affect economic structures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Credit Union Executive (Raleigh, NC)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- Regulatory changes could require us to reassess and innovate our offerings, posing a challenge and an opportunity.
- Concerned about maintaining compliance under potentially new and fluid rules.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
University Graduate Student (Houston, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 4.0 years
Commonness: 6/20
Statement of Opinion:
- Excited about the potential learning and research opportunities arising from this act.
- Aspires to work in a dynamic fintech sector enabled by new regulatory frameworks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 8 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Independent Financial Consultant (Miami, FL)
Age: 47 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Anticipate an uptick in demand for consulting services as small businesses navigate these regulatory changes.
- It’s a complex environment to operate in, but offers professional growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $150000000 (Low: $125000000, High: $175000000)
Year 2: $155000000 (Low: $130000000, High: $180000000)
Year 3: $160000000 (Low: $135000000, High: $185000000)
Year 5: $170000000 (Low: $145000000, High: $195000000)
Year 10: $190000000 (Low: $160000000, High: $220000000)
Year 100: $250000000 (Low: $200000000, High: $300000000)
Key Considerations
- The pace of regulatory adoption will affect the speed and scale of financial innovation.
- Interagency coordination will be crucial to effectively manage the administrative aspects of the policy.
- Varying readiness of financial institutions to leverage new regulatory flexibilities might lead to disparate impacts across the sector.