HB 2177 Summary

• Expands the definition of "innovation" to include new or emerging technology uses for financial products or services, and revises "consumer" to exclude agents, business partners, and investors of sandbox participants.

• Adds cybersecurity requirements to sandbox participant applications, requiring applicants to demonstrate how they will employ cybersecurity measures to avoid breaches and protect consumer and transaction data.

• Modifies consumer caps by allowing sandbox participants to test with up to 17,500 consumers (increased from 10,000) if they demonstrate adequate financial capitalization and risk management, and permits attorney general discretion to increase consumer caps upon request.

• Allows sandbox participants to request extensions of the testing period or increases in consumer caps for purposes of pursuing licensure, with the attorney general required to respond within 30 days.

• Clarifies that the attorney general has exclusive enforcement authority over sandbox participants and establishes that removal from the sandbox is not subject to appeal under Arizona's administrative procedures.