Governor Newsom Nixes Digital Financial Assets Licensing Bill – Financial Services

Last week, Governor Gavin Newsom vetoed AB 2269 (Grayson) which
would have created a “Digital Financial Assets Law” to be
administered by the Department of Financial Protection &
Innovation. The Governor in his veto message asserted that it would
be “premature to lock a licensing structure in statute”.
He also claimed that establishing a “new regulatory program is
a costly undertaking, and this bill would require a loan from the
general fund in the tens of millions of dollars for the first
several years”.

AB 2269 could still become law in two ways. First, the
California Constitution specifies that the Governor may veto a bill
“by returning it with any objections to the house of
origin”. Cal. Const. Art. IV, § 10(a). A bill that is (i)
passed before September 1 (AB 2069 was enrolled on August 26, 2022)
before the second calendar year of the legislative biennium (this
is the second year of the current 2021-2022 biennium); (ii) in the
possession of the Governor on or after September 1 (AB 2069 was
presented to the Governor on August 31, 2022); and (iii) not
returned on or before September 30, of that year becomes a statute.
Cal. Const. Art. IV, § 10(b)(1). This actually occurred under
the administration of Governor Pete Wilson when nine bills
became law because they had been left on a copy machine in the
Governor’s office by staff and not returned to their house of
origin. SeeWilson Vetoes Arrive Too Late to Kill
Laws. Second, the legislature could also overturn
Governor Newsom’s veto by a two-thirds vote of each house. Cal.
Const. Art. IV, § 10(a).

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