PHOENIX - Attorney General Mark Brnovich worked with State Representative Jeff Weninger (R-LD 17 Chandler) to introduce legislation that will reduce regulatory burdens for Arizona companies using technology to provide new financial products and services.
“I’m excited to be working with Rep. Weninger and the legislature to reduce an entrepreneur’s barrier to entry without sacrificing fundamental consumer safeguards,” said Attorney General Mark Brnovich. “My top priority is to protect consumers and that includes being proactive and recognizing that consumers benefit from innovation. The best protection for a consumer may be a low-cost product yet to be invented.”
The bill, HB 2434, was drafted in consultation with the Civil Litigation Division of the Arizona Attorney General's Office. If enacted, the proposal would establish a groundbreaking “regulatory sandbox” program to be administered by the Arizona Attorney General's Office - the first-of-its-kind in the United States.
In the Arizona “sandbox,” startups, entrepreneurs, and even established companies can launch products on a limited, temporary scale to consumers to test innovative products, services, business models, and delivery mechanisms in the real market without incurring the regulatory costs and burdens that would otherwise be imposed. Consumers are still protected under the Arizona Consumer Fraud Act.
“As a lawmaker and business owner, I’ve always advocated for pro-economic growth policies aimed at getting government out of the way of Arizona entrepreneurs,” State Rep. Jeff Weninger said. “For years, young Fintech companies have been weighed down by state and federal regulations. It can take years of work and millions of dollars in compliance costs and legal fees for entrepreneurs to successfully maneuver 50 different licensing and regulatory schemes so they can operate lawfully across the United States.”
HB 2434 would create the first regulatory sandbox in the United States, joining those that already exist in countries such as the United Kingdom, Singapore, Australia, and the UAE. HB 2434 contains a reciprocity provision permitting the Attorney General to enter into agreements that would allow Arizona sandbox participants to operate in other jurisdictions that establish similar programs.
Full copy of HB 2434.