Securing Innovation in Financial Regulation Act

Bill Number

H.R. 3690

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-06-03: Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2025-06-18T14:18:06Z

AI-Generated Summary

Purpose of the Legislation

The "Securing Innovation in Financial Regulation Act" (H.R. 3690) aims to formally establish and codify two innovation offices—one in the Securities and Exchange Commission (SEC) and one in the Commodity Futures Trading Commission (CFTC)—to support the development and regulation of emerging financial technologies, such as fintech innovations. This ensures these agencies can better engage with industry, promote fair competition, and adapt regulations to new technologies while protecting the public.

Key Provisions

• Establishment of the Strategic Hub for Innovation and Financial Technology (FinHub) in the SEC:
• Requires the SEC to create FinHub as a committee within 180 days of enactment.
• Members are selected from SEC divisions like Trading and Markets, Corporate Finance, and Investment Management.
• Responsibilities include:
• Acting as an internal resource on emerging financial technologies.
• Engaging with businesses and market participants in these fields.
• Sharing information about SEC rules and regulations with innovators.
• FinHub must submit an annual summary of its activities to the SEC by October 31 each year (starting 2025), which is included in the SEC's annual report to Congress. Reports exclude confidential information.

• Codification of LabCFTC in the CFTC:
• Formally establishes LabCFTC as a permanent office within the CFTC.
• Purposes include promoting responsible fintech innovation, informing the CFTC about new technologies, and providing outreach to innovators about regulations.
• Appoints a Director who reports directly to the CFTC Commission and handles assigned duties.
• Duties encompass:
• Advising on rulemakings, guidance, and actions related to fintech.
• Offering internal training on financial technologies to CFTC staff.
• Suggesting tech tools to improve CFTC oversight.
• Collaborating with academia, students, and professionals on relevant issues.
• Providing information on CFTC rules and encouraging feedback from innovators.
• Requires annual reports to congressional agriculture committees by October 31 each year (starting 2025), covering meeting numbers, discussion summaries, service improvements, recommendations, and other details while respecting confidentiality rules.
• Mandates record-keeping for public engagements, secure storage of communications, and protection of confidential information.
• Implementation must occur within 180 days of enactment, with minor conforming changes to existing CFTC organizational rules.

Significant Changes to Existing Law

• Amends the Securities Exchange Act of 1934 (15 U.S.C. 78d) by adding a new subsection to legally codify FinHub, which was previously an informal SEC initiative.
• Amends the Commodity Exchange Act (7 U.S.C. 22) by adding a new subsection to codify LabCFTC, also previously informal, and adjusts reporting structures to allow the LabCFTC Director to report directly to the full Commission rather than a subunit.
• Introduces mandatory annual reporting requirements and confidentiality safeguards not explicitly required before, ensuring these offices have statutory authority and accountability.

Potential Impacts

• On Government Agencies: Enhances the SEC and CFTC's ability to monitor and respond to fintech advancements, potentially improving regulatory efficiency and reducing outdated rules. Agencies must allocate resources for staffing, training, and reporting, which could strain budgets but foster innovation-friendly oversight.
• On Citizens: Promotes fair competition and responsible innovation in financial services, potentially leading to safer, more accessible products like digital payments or blockchain tools, benefiting consumers through better protections and market stability.
• On International Relations: Minimal direct impact, but by strengthening U.S. regulatory adaptability to global fintech trends, it could position the U.S. as a leader in international financial standards, indirectly influencing cross-border cooperation.

Main Stakeholders Affected

• Regulatory Agencies: SEC and CFTC, which gain formalized tools for engaging with technology but face new reporting obligations.
• Financial Technology Innovators and Businesses: Fintech companies, startups, and market participants who can more easily access guidance and feedback on regulations.
• Congress: Receives annual reports to oversee agency activities, particularly the House and Senate Agriculture Committees for CFTC matters.
• Academia and Professionals: Students, researchers, and experts in financial technology who can collaborate with these offices.
• The Public: Indirectly affected as beneficiaries of innovation and enhanced regulatory oversight in financial markets.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Codification provides these offices with permanent legal status, reducing vulnerability to administrative changes and ensuring consistent engagement with industry. It reinforces confidentiality protections under existing laws (e.g., Commodity Exchange Act Section 8), minimizing risks of proprietary information leaks.
• Constitutional Implications: None significant; the bill aligns with Congress's authority to structure federal agencies and oversee financial regulation under the Commerce Clause, without infringing on individual rights.
• Political Implications: Signals bipartisan support for fintech growth (introduced by Rep. Lucas and referred to Financial Services and Agriculture Committees), potentially encouraging future legislation on digital assets. It promotes a balanced approach to innovation and regulation, avoiding overly restrictive policies that could stifle economic growth.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Lucas, Frank D. [R-OK-3]

Recent Actions

• 2025-06-03: Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-03: Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-03: Introduced in House
• 2025-06-03: Introduced in House

Bill Versions

• Securing Innovation in Financial Regulation Act — issued 2025-06-03 — PDF (7 pages)