West Virginia is the latest state in the U.S. to adopt a regulatory sandbox to encourage the development of new rising industries within its borders.
In these uncertain times, it’s a move that brings hope to an entrepreneurial community – and a state – navigating hardships from a global pandemic.
House Bill 4621 (the FinTech Sandbox Bill) passed unanimously in both the House and Senate in March. The passage of the bill will support West Virginia’s efforts to grow into a start-up state by giving entrepreneurs testing products and services relief from regulatory costs and licensing restrictions that can be hindrances, providing great benefit to entrepreneurs building solutions to the financial challenges faced by individuals, communities and institutions as a result of COVID-19.
The bill was brought to life by Delegates Moore Capito, Daryl Cowles, Paul Espinosa, John Shott and Ben Queen in partnership with Sarah Biller, Executive Director of West Virginia University’s Vantage Ventures. Companion legislation (Senate Bill 514) was introduced in the Senate by Senators Eric Tarr and Robert Plymale.
WVU is working to promote West Virginia’s vision to grow into an innovation economy by giving entrepreneurs a mechanism to scale ideas to market through the Vantage Ventures initiative, which officially launched in October 2019 in partnership with John Chambers and the College of Business and Economics that bears his name.
Vice President for Strategic Initiatives Rob Alsop commended the Legislature for this important step in realizing that vision and supporting entrepreneurs by giving them an environment to grow and thrive.
“WVU applauds members of the Legislature for coming together in a bipartisan fashion to introduce this transformational legislation and pass it unanimously,” Alsop said. “Its passage is an important step in attracting companies to West Virginia and bringing us closer to our goal to turning West Virginia into a start-up state.”
Historically, innovation across most financial services firms has been limited by factors such as legacy IT systems, long procurement processes and complex regulatory regimes. It is only recently that laborious efforts have been undertaken by large financial services firms most often in financial centers like New York, Boston or Chicago to overcome these challenges and actively partner with entrepreneurs bringing novel technology solutions.
Biller has been at the helm of the effort to shepherd West Virginia’s economy into the digital age by providing entrepreneurs with a systematic process and the support needed to grow from idea to scale. She was a champion for the legislation as part of WVU’s larger efforts.
“The passage of the FinTech Sandbox legislation provides new opportunities for financial institutions serving the needs of individuals and businesses on Main Street America to productively engage with the FinTech community,” Biller said. “I am pleased that FinTech innovation needs no longer be bound by the size of the institution or geographic region. We have been presented with a rare opportunity to provide a path forward for FinTech entrepreneurs focusing on positively impacting economic mobility and the delivery of financial services in rural regions. I look forward to the journey.”
The bill has also been applauded by West Virginian and Marshall University alumni Brad Smith, who was formerly the chief executive officer of Intuit and currently serves as their executive chairman.
“The passage of the FinTech Sandbox bill demonstrates that West Virginia has taken a proactive step that is quite unique,” Smith said. “This bill will address challenges that entrepreneurs face by creating financial security and supporting our community banks.”
Larry Mazza, chief executive officer and president of MVB Bank, is pleased about the benefit the bill will provide for community banks and entrepreneurs alike. Mazza believes the bill will push West Virginia into a new financial reality that will attract technology jobs to the state.
“It’s important to allow this type of innovative incubator program for financial products and services to move West Virginia into the financial frontier,” said Mazza. “We appreciate the support of Delegate Moore Capito and West Virginia University for this effort. Fintech sandbox programs are popping up all around the country, and this concept is also prevalent in Europe. Executing on this sandbox strategy and attracting technology jobs with growth companies to West Virginia is of the utmost importance. We really have a fantastic environment here. West Virginia is a beautiful and cost-effective place to live that can be attractive to drawing talented people to our great state.”
West Virginia is one of only a few states to pass the legislation, joining Arizona, Utah and Wyoming.
The FinTech Sandbox bill, a 2020 WV Forward legislative priority, provides opportunities for economic growth and diversification and differentiates West Virginia from neighboring states. This legislation aligns seamlessly and takes specific actions to advance the goals outlined in McKinsey’s Summary of Findings. WV Forward is a statewide collaboration led by West Virginia University, the state Department of Commerce and Marshall University to help grow the economy by adding jobs, investing in education and improving health and wellness to create the most prosperous West Virginia possible.
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