NY A03336

Establishes a regulatory sandbox program administered by the Attorney General and State Comptroller allowing fintech companies to test financial products and services for 24 months without obtaining a license or paying licensing fees.

Applicants must demonstrate jurisdiction in New York and adequate understanding of their fintech product, with approval decisions made within 90 days; sandbox participants are limited to 10,000 consumers and transaction caps (individual transactions up to $10,000 and aggregate up to $2 million for money transmitters) unless demonstrating adequate capitalization.

Requires sandbox participants to disclose to consumers that products are temporary tests, not state-endorsed, and may be discontinued, while providing contact information for filing complaints with regulators.

Mandates that all sandbox participants undergo third-party audits by depository or custodian services to ensure consumer asset protection through Securities Investor Protection Corporation coverage and proper security protocols.

Participants must exit the sandbox within 60 days after the 24-month testing period ends, continue fulfilling ongoing duties to consumers, and may request one-year extensions to pursue state licensure; the program expires July 1, 2031.