Retooling laws that made Delaware famous: banking regulations addressed in new bills

The laws that made Delaware a leader in financial and banking services under the administration of former Governor Pete du Pont would be modernized to address digital currency and the ways we do banking in general today, under a package of legislation to be considered in the Delaware General Assembly.

Senate Bill 16 is known as the Delaware Banking Modernization Act. It would update Delaware Code to define digital assets, expand the State Bank Commissioner’s Authority, and modernize corporate governance and organizational requirements for state-chartered banks and trust companies. Also, interstate trust company operations would be facilitated. Out-of-state financial institutions would also have expanded authority to act as fiduciaries in Delaware.

“Industries change. The nature of money changes,” Governor Matt Meyer said Monday as the bills were discussed at the University of Delaware FinTech Innovation Hub Center for Accelerating Financial Equity. 

“This is really going to do incredible things in our state,” Representative Bill Bush, D- Dover said. 

The Senate sponsor, chair of the Banking, Business, Insurance and Technology Committee Spiros Mantzavinos, D- Elsmere, said the legislation has bipartisan support.

“It gives us the opportunity to provide strong consumer protections – because this is happening, with or without us,” Mantzavinos said. “Updating our code to allow for proper licensing and regulations here in Delaware number-one protects consumers but allows us to maintain our place as a financial services leader throughout the country.”

“We believe strongly that balanced, consistent guardrails are vital for providers and the people they serve,” Delaware Bankers Association President and CEO Karyn Polak said. “But, guardrails work best when they’re calibrated for the road your’re actually on.” 

The Delaware Payment Stablecoin Act, Senate Bill 19, was also introduced Monday. It would establish a licensing framework for payment stablecoin issuers and digital asset service providers “operating with or on behalf of Delaware residents.” The Delaware Money Transmission and Virtual Currency Modernization Act will also be filed in the coming days.

“Financial services are evolving at a pace that would have been difficult to imagine a decade ago. New technologies, new payment systems, and new financial products are reshaping how consumers move money, access financial services, and interact with the broader economy,” Delaware State Bank Commissioner Lisa Collison said. “As the state regulatory authority for financial services, our responsibility is to ensure that the legal frameworks governing these services evolve as well.”