Full Text of HB5139 100th General Assembly
HB5139eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Regulatory Sandbox Act. | 6 | | Section 5. Definitions. As used in this Act: | 7 | | "Consumer" means a person who purchases or otherwise enters | 8 | | into a transaction or agreement to receive an innovative | 9 | | financial product or service tested by a person participating | 10 | | in the regulatory sandbox. | 11 | | "Department" means the Department of Financial and | 12 | | Professional Regulation. | 13 | | "Division of Financial Institutions" means the Division of | 14 | | Financial Institutions of the Department of Financial and | 15 | | Professional Regulation. | 16 | | "Financial institutions" means ambulatory and community | 17 | | currency exchanges, credit unions, guaranteed credit unions, | 18 | | persons engaged in the business of transmitting money to | 19 | | foreign countries or buying and selling foreign money, pawners' | 20 | | societies, title insuring or guaranteeing companies, and | 21 | | persons engaged in the business of making loans of $800 or | 22 | | less. | 23 | | "Financial product or service" means a product or service |
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| 1 | | regulated by the Department's Division of Financial | 2 | | Institutions or a product or service that includes elements | 3 | | that may otherwise require a license, certification, or | 4 | | recognition as a financial institution or enterprise regulated | 5 | | by the Department's Division of Financial Institutions. | 6 | | "Innovation" means, with respect to a product or service, | 7 | | that which uses or incorporates new or emerging technology, or | 8 | | new uses for existing technology, to address a problem, provide | 9 | | a benefit, or otherwise offer a product, service, business | 10 | | model, or delivery mechanism that has no comparable widespread | 11 | | offering in the marketplace regulated by the Department's | 12 | | Division of Financial Institutions. | 13 | | "Person" means an individual, partnership, joint venture, | 14 | | trust, estate, firm, corporation, association, or cooperative | 15 | | society or association. | 16 | | "Regulatory sandbox" means the program established by this | 17 | | Act that allows a person to temporarily test innovative | 18 | | financial products, services, business models, or delivery | 19 | | mechanisms on a limited basis without being required to first | 20 | | obtain a license, certification, or recognition as a regulated | 21 | | financial institution or enterprise. | 22 | | "Secretary" means the Secretary of Financial and | 23 | | Professional Regulation. | 24 | | Section 10. Purpose. The purpose of the regulatory sandbox | 25 | | is to enable a person to obtain limited access to the Illinois |
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| 1 | | marketplace in order to temporarily test innovations through | 2 | | the regulatory sandbox, including allowing the person to test | 3 | | innovations without first having to obtain licensure with the | 4 | | Department. | 5 | | Section 15. Applications; review. | 6 | | (a) A person may apply to the Department to enter the | 7 | | regulatory sandbox to temporarily test innovations before | 8 | | releasing the innovation to Illinois consumers. | 9 | | (b) An application to enter the regulatory sandbox shall be | 10 | | in a form prescribed by the Secretary. | 11 | | (c) At the time of application, an applicant shall provide | 12 | | the Department with an accurate and up-to-date email address. | 13 | | (d) If an applicant is a corporation, the applicant must be | 14 | | in good standing and in statutory compliance with the state or | 15 | | country of its incorporation. If an applicant is an entity | 16 | | other than a corporation, the applicant must be properly | 17 | | registered under the laws of this State or another state or | 18 | | country. If required by the Department, the applicant must be | 19 | | authorized to do business in the State of Illinois. | 20 | | (e) A financial institution already regulated by the | 21 | | Department's Division of Financial Institutions must file an | 22 | | application to test products or services that are outside the | 23 | | scope of its current license. | 24 | | (f) The fee for an application to enter the regulatory | 25 | | sandbox is $500 per innovation. |
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| 1 | | (g) All moneys received by the Department under this Act | 2 | | shall be deposited in the Financial Institution Fund created | 3 | | under Section 6z-26 of the State Finance Act. | 4 | | (h) The Department shall approve or deny an application | 5 | | within 90 days after the date of receipt of the application. | 6 | | The Department and the applicant may agree to extend the time | 7 | | beyond 90 days. | 8 | | Section 20. Operation. | 9 | | (a) An applicant approved for the regulatory sandbox has 12 | 10 | | months from the date of approval to test the innovation. | 11 | | (b) Consumers upon whom innovations are tested must be | 12 | | Illinois residents. | 13 | | (c) No more than 5,000 Illinois consumers may transact | 14 | | through or enter into an agreement to use the innovation. | 15 | | (d) At the end of the innovation's 12-month test period, a | 16 | | person testing an innovation must exit the regulatory sandbox | 17 | | and wind down the operation of the innovation within 60 days, | 18 | | except as otherwise provided in Section 25. | 19 | | (e) Before temporarily testing an innovation, a person | 20 | | approved for the regulatory sandbox must disclose, in a clear | 21 | | and conspicuous form, to Illinois consumers: | 22 | | (1) the name and contact information of the person | 23 | | providing the innovation; | 24 | | (2) that the innovation is authorized pursuant to the | 25 | | regulatory sandbox and not pursuant to any license issued |
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| 1 | | by the Department; | 2 | | (3) that the State of Illinois does not endorse or | 3 | | recommend the innovation; | 4 | | (4) that the innovation is a temporary test that may be | 5 | | discontinued at the end of the test period, including the | 6 | | expected end date of the test period; and | 7 | | (5) the name and contact information for the | 8 | | Department, including where a consumer may file a complaint | 9 | | regarding the innovation. | 10 | | These disclosures must be provided to the consumers before | 11 | | proceeding with the transaction. | 12 | | (f) A person approved for the regulatory sandbox shall | 13 | | maintain books, accounts, and records for the innovation. | 14 | | (g) The Department may inspect a person in the regulatory | 15 | | sandbox at any time. Unless it will interfere with the | 16 | | Department's duties under this Act, reasonable notice of the | 17 | | inspection shall be given to the person in the regulatory | 18 | | sandbox. The Secretary or appointed representative shall have | 19 | | full and free access to all the books, papers, and records that | 20 | | relate to the innovation. | 21 | | (h) A person who winds down the operation of the innovation | 22 | | shall preserve books, accounts, and records, in any form, for | 23 | | the innovation for 5 years after the conclusion of the test | 24 | | period. | 25 | | (i) The Department may suspend any person in the regulatory | 26 | | sandbox for failing to comply with this Act, including the |
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| 1 | | failure to comply with the Department's request for books, | 2 | | accounts, records, or other relevant material. | 3 | | (j) The Secretary may revoke or suspend admission to or | 4 | | refuse to admit a person to the regulatory sandbox if the | 5 | | Secretary finds that: | 6 | | (1) the person has failed to pay the application fee; | 7 | | (2) the person has violated a provision of this Act or | 8 | | a rule adopted by the Secretary under the authority of this | 9 | | Act; | 10 | | (3) a fact or condition exists which, if it had existed | 11 | | at the time of the original application for admission to | 12 | | the regulatory sandbox, would have warranted the Secretary | 13 | | in refusing initial admission to the regulatory sandbox; or | 14 | | (4) the person has made a false statement or a false | 15 | | representation to the Secretary in application for | 16 | | admission to the regulatory sandbox. | 17 | | When a person's admission to the regulatory sandbox is | 18 | | denied, suspended, or revoked, the Secretary shall serve the | 19 | | person with notice of his or her action, including a statement | 20 | | of the reasons for his or her action, personally, by electronic | 21 | | mail, or by regular mail. Service by mail is completed when the | 22 | | notice is deposited in the U.S. Mail. Service to the email | 23 | | address of record is completed when sent. | 24 | | Section 25. Extension. | 25 | | (a) A person in the regulatory sandbox may request a |
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| 1 | | one-time extension of the regulatory sandbox test period. The | 2 | | request must be made no later than the end of the 11th month of | 3 | | the initial 12-month test period. The request for an extension | 4 | | must specify how long the requester believes will be necessary | 5 | | to produce a conclusive test and state specific reasons why an | 6 | | extension is necessary. | 7 | | (b) The Department may grant a one-time test period | 8 | | extension of up to 6 months. The Department must grant or deny | 9 | | a request for a one-time test period extension before the end | 10 | | of the initial 12-month test period. A denial of an extension | 11 | | request is within the Department's sole discretion and any such | 12 | | denial is not appealable. | 13 | | Section 30. Rules. The Secretary may adopt and enforce all | 14 | | reasonable rules necessary or appropriate for the | 15 | | administration of this Act. The rulemaking shall be subject to | 16 | | the provisions of the Illinois Administrative Procedure Act. | 17 | | Section 35. Judicial review. All final administrative | 18 | | decisions of the Department under this Act shall be subject to | 19 | | judicial review pursuant to the provisions of the | 20 | | Administrative Review Law and any rules adopted pursuant to the | 21 | | Administrative Review Law. | 22 | | Section 40. Remedies. Nothing in this Act shall be | 23 | | construed to limit the remedies provided under the Code of |
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| 1 | | Civil Procedure. | 2 | | Section 905. The State Finance Act is amended by changing | 3 | | Section 6z-26 as follows:
| 4 | | (30 ILCS 105/6z-26)
| 5 | | Sec. 6z-26. The Financial Institution Fund. All moneys | 6 | | received by the
Department of Financial and Professional | 7 | | Regulation under the Safety Deposit License Act, the
Foreign | 8 | | Exchange License Act, the Pawners Societies Act, the Sale of | 9 | | Exchange
Act, the Currency Exchange Act, the Sales Finance | 10 | | Agency Act, the Debt Management Service Act, the Consumer | 11 | | Installment Loan Act, the Illinois Development Credit
| 12 | | Corporation Act, the Title Insurance Act, the Debt Settlement | 13 | | Consumer Protection Act, the Debt Management Service Consumer | 14 | | Protection Fund, the Regulatory Sandbox Act, and any other Act | 15 | | administered by the Department of Financial and Professional | 16 | | Regulation as the successor of the
Department of Financial | 17 | | Institutions now or in the future (unless an Act
specifically | 18 | | provides otherwise) shall be deposited in the Financial
| 19 | | Institution Fund (hereinafter "Fund"), a special fund that is | 20 | | hereby created in
the State Treasury.
| 21 | | Moneys in the Fund shall be used by the Department, subject | 22 | | to appropriation,
for expenses incurred in administering the | 23 | | above named and referenced Acts.
| 24 | | The Comptroller and the State Treasurer shall transfer from |
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| 1 | | the General
Revenue Fund to the Fund any monies received by the | 2 | | Department after June 30,
1993, under any of the above named | 3 | | and referenced Acts that have been deposited
in the General | 4 | | Revenue Fund.
| 5 | | As soon as possible after the end of each calendar year, | 6 | | the Comptroller
shall compare the balance in the Fund at the | 7 | | end of the calendar year with the
amount appropriated from the | 8 | | Fund for the fiscal year beginning on July 1 of
that calendar | 9 | | year. If the balance in the Fund exceeds the amount
| 10 | | appropriated, the Comptroller and the State Treasurer shall | 11 | | transfer from the
Fund to the General Revenue Fund an amount | 12 | | equal to the difference between the
balance in the Fund and the | 13 | | amount appropriated.
| 14 | | Nothing in this Section shall be construed to prohibit | 15 | | appropriations from
the General Revenue Fund for expenses | 16 | | incurred in the administration of the
above named and | 17 | | referenced Acts.
| 18 | | Moneys in the Fund may be transferred to the Professions | 19 | | Indirect Cost Fund, as authorized under Section 2105-300 of the | 20 | | Department of Professional Regulation Law of the Civil | 21 | | Administrative Code of Illinois.
| 22 | | (Source: P.A. 96-1420, eff. 8-3-10.)
| 23 | | Section 999. Effective date. This Act takes effect January | 24 | | 1, 2019.
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