State Sen. Steve Wilson, who chairs the Ohio Senate’s Financial Institutions and Technology Committee, wants to get the state government out of the way of innovation, and he thinks two bills in hearings this month at the state legislature could help make that happen.
The Republican from Maineville is the primary sponsor of one of the bills, Senate Bill 249, which if passed would create what is known as a “regulatory sandbox” for financial products and services.
Wilson, who worked in the banking industry, said he wants to find ways to encourage both the private and government sectors in Ohio to more fully embrace emerging technology.
“The whole idea is that (this bill) gives the ability for our regulators to allow banks or any other financial services firms to develop new and innovative products,” he said.
Part of the motivation, Wilson said, is to take advantage of possibilities of “fintech,” a term that combines finance and technology and refers to any business that uses technology to modernize or automate financial services and processes. A fintech sandbox, he said, functions like an incubator, allowing both traditional banks and nontraditional financial firms to build and evaluate new financial products outside of state regulatory requirements that apply to traditional products.
Wilson believes that less regulatory oversight will expedite these new products by allowing them to be tested quickly. It is “hard to be innovative or to come up with new products” in highly regulated industries, he said in committee testimony on Oct. 19.
The Ohio Department of Commerce’s Division of Financial Institutions would oversee the sandbox program, which would permit a two-year pilot to test a novel product or service, during which time that fintech operation would be exempt from state laws, other than those outlined in the legislation.
That two-year time period can be shortened by commerce department officials overseeing the program, and consumers cannot be charged interest…
