Utah Unveils FinTech Sandbox Program

Attention FinTechs: the Beehive State is calling. As Deseret News reports, this week the Utah Department of Commerce Tuesday announced the formation of a regulatory sandbox. Under this program, participants will be allowed to test various new financial products and services that would typically require a license. However these overrides will be limited and participants will be overseen by Utah’s Department of Commerce, which will also handle the application process.

In a statement about the program, Utah State Representative Marc Roberts said, “I’m excited about Utah’s regulatory sandbox and the chance it will give FinTech companies and entrepreneurs in Utah the chance to take innovative products and ideas to market without having to jump through the traditional regulatory hoops and licensing requirements which can be burdensome and costly. He went on to declare, “This is good for Utah and the future of FinTech innovation.”

Utah’s new FinTech sandbox is the nation’s second such statewide regulatory program, following neighboring Arizona. Last year Grand Canyon State governor Doug Ducey signed House Bill 2434 into law. Meanwhile federal sandboxes have also been considered but, as Arizona Attorney General Mark Brnovich noted at the time his state’s program was established, “Congress is moving at a glacial pace.”

One of the reasons a federal program has been stalled is due to concern that a lack of regulation on financial companies could harm consumers. However, Roberts argues that the sandbox set-up doesn’t mean that the participating companies aren’t being kept in check. As he told the Deseret News, “This (program) says we’re going to waive the requirement to get the license right now, but we’re still going to vet you and monitor you. But go ahead and try your product out on a limited basis and see if it works.” Additionally Weber State University associate professor Randy Boyle defended the state’s decision, noting that the program could actually be good for consumers. He explained, “It provides a lot of benefits to consumers, much like an experimental drug. If an experimental drug works, consumers win in a big, big way.”

Considering that a full year passed between the time the first and second states introduced a FinTech sandbox program, it’s hard to argue that the idea is catching fire. Regardless the news that another state is testing the concept is encouraging. Plus, as results from tests in Arizona and now Utah come in, hopefully they’ll encourage other states — and perhaps even the Feds — to come aboard.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...