West Virginia 2019 Regular Session Status: In Committee 1 R cosponsors

SB 583 — Creating Financial Technology Sandbox Act for testing financial products and services

Last action — To Judiciary

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House of Delegates
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2019 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Bill Text

What changed in the latest version

199 added · 194 removed

Plain-language change summary

The latest version of SB 583 introduces several key changes focused on establishing a Financial Technology Sandbox Act in West Virginia. It now includes provisions for a Financial Technology Innovation Account and specifies responsibilities and authority of the Commissioner of Financial Institutions, ensuring a structured approach to monitoring and regulating financial products. Additionally, the updates require participating businesses to post a bond and undergo criminal history background checks, prioritizing consumer protection and accountability. These changes aim to create a safe environment for testing innovative financial services, promoting economic growth while safeguarding consumer interests.

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NEWS RELEASES HELPFUL LINKS Introduced Version « Senate Bill 583 History OTHER VERSIONS  —  Committee Substitute (1)  |   |  Email Key:
NEWS RELEASES HELPFUL LINKS SB583 SUB1 « Senate Bill 583 History OTHER VERSIONS  —  Introduced Version  |   |  Email Key:
Red = new code to be enacted WEST virginia legislature regular session Introduced Senate Bill 583 By Senators Azinger and Boso [Introduced February 12, 2019;
Red = new code to be enacted WEST virginia legislature regular session Committee Substitute for Senate Bill 583 By Senators Azinger and Boso [Originating in the Committee on Banking and Insurance;
Referred to the Committee on Banking and Insurance;
Reported on February 19, 2019]     A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §31A-9-1, §31A-9-2, §31A-9-3, §31A-9-4, §31A-9-5, §31A-9-6, §31A-9-7, §31A-9-8, and §31A-9-9, all relating to creating the Financial Technology Sandbox Act and program for the testing of financial products and services;
and then to the Committee on the Judiciary] A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §31A-9-1, §31A-9-2, §31A-9-3, §31A-9-4, §31A-9-5, §31A-9-6, §31A-9-7, §31A-9-8, and §31A-9-9, all relating to creating the financial technology sandbox program for the testing of financial products and services in West Virginia;
authorizing the Division of Financial Institutions to accept applications for participation and to authorize waivers of certain statutes and rules covering the regulation of financial services offered to consumers in this state;
authorizing waivers of certain statutes and rules covering the regulation of financial products and services offered to consumers in this state;
establishing standards and procedures for accepting applications, operations, and supervision by the Division of Financial Institutions;
providing for service of process;
specifying responsibilities and authority of Commissioner of Financial Institutions;
establishing standards and procedures related to applicants and applications for participation in the program;
requiring application fee and reimbursement of costs incurred by Division for Financial Institutions;
setting forth requirements concerning criminal history background checks and considerations regarding participation in the program;
requiring posting of bond;
creating the Financial Technology Innovation Account;
specifying limits of program and standards for the suspension and revocation of an applicant’s authorization under the program;
requiring written statement of disclosures to consumers;
requiring retention of certain records and exempting them from Freedom of Information Act;
requiring criminal history background checks;
permitting potential extension of the program;
creating an account for the deposit of funds generated under the program;
authorizing rulemaking and orders;
requiring a consumer protection bond;
and permitting the creation of a new unit under the Division of Financial Institutions with staff for administration of the program.
specifying standards for the suspension and revocation of a participant’s authorization under the program;
authorizing rules and orders;
creating a new unit under the Division of Financial Services for the management of the program;
and providing for effective dates.
ARTICLE 9.  FINANCIAL REGULATORY SANDBOX ACT.
ARTICLE 9.  FINANCIAL Technology SANDBOX ACT.
This act may be cited as the “Financial Technology Sandbox Act.” §31A-9-2.
This article may be cited as the “Financial Technology Sandbox Act”.
§31A-9-2.
(1) “Blockchain” means a digital ledger or database which is chronological, consensus-based, decentralized and mathematically verified in nature.
(1) “Blockchain” means a digital ledger or database which is chronological, consensus-based, decentralized, and mathematically verified in nature;
(2) “Commissioner” has the meaning set forth in §31A-2-1 of this code.
(2) “Commissioner” has the meaning set forth in §31A-1-2 of this code;
(3) “Consumer” means a person, whether a natural person or a legal entity, in West Virginia who purchases or enters into an agreement to receive an innovative financial product or service made available through the financial technology sandbox.
(3) “Consumer” means a person, whether a natural person or a legal entity, in West Virginia who purchases or enters into an agreement to receive an innovative financial product or service made available through the financial technology sandbox;
(4) “Division” has the meaning set forth in §32A-1-2 of this code.  (5) “Financial product or service” means a product or service related to finance, including banking, securities, consumer credit or money transmission, which is subject to statutory or rule requirements under the laws of this state and is under the jurisdiction of the commissioner;
(4) “Division” has the meaning set forth in §31A-1-2 of this code;
(6) “Financial technology sandbox” means the program created by this act which allows a person to make an innovative financial product or service available to consumers during a sandbox period through a waiver of existing statutory and rule requirements, or portions thereof, by the commissioner;
(5) “Financial product or service” means a product or service related to finance, including banking, securities, consumer credit, or money transmission, which is subject to statutory or rule requirements under the laws of this state and is under the jurisdiction of the commissioner;
(7) “Innovative” means new or emerging technology, or new uses of existing technology, that provides a product, service, business model or delivery mechanism to the public and has no substantially comparable, widely available analogue in West Virginia, including blockchain technology;
(6) “Financial technology sandbox” means the program created by this article which allows a person to make an innovative financial product or service available to consumers during a sandbox period through a waiver of existing statutory and rule requirements, or portions thereof, by the commissioner;
(8) “Person” has the meaning set forth in §31A-1-2 of this code.  (9) “Sandbox period” means the period of time, initially not longer than 24 months, in which the commissioner has authorized an innovative financial product or service to be made available to consumers, which shall also encompass any extension granted under §31A-9-8 of this code.
(7) “Innovative” means new or emerging technology, or new uses of existing technology, that provides a product, service, business model, or delivery mechanism to the public and has no substantially comparable, widely available analogue in West Virginia, including blockchain technology;
(8) “Person” has the meaning set forth in §31A-1-2 of this code;
and (9) “Sandbox period” means the period of time, initially not longer than 24 months, in which the commissioner has authorized an innovative financial product or service to be made available to consumers, which shall also encompass any extension granted under §31A-9-8 of this code.
(a) Notwithstanding any other provision of law, a person who seeks to make an innovative financial product or service available to consumers in the financial technology sandbox may be granted a waiver of certain specified requirements, imposed by West Virginia statute or rule, or portions thereof, if these statutes or rules do not currently permit the product or service to be made available to consumers.  A waiver under this subsection may be no broader than necessary to accomplish the purposes and standards set forth in this article, as determined by the commissioner.
(a) Notwithstanding any other provision of law, a person who seeks to make an innovative financial product or service available to consumers in the financial technology sandbox may be granted a waiver of certain specified requirements, imposed by West Virginia statute or rule, or portions thereof, if these statutes or rules do not currently permit the product or service to be made available to consumers.
A waiver under this subsection may be no broader than necessary to accomplish the purposes and standards set forth in this article, as determined by the commissioner.
and (2) Subject to all criminal and consumer protection laws of this state and as may be applicable under federal law;
and (2) Subject to all criminal and consumer protection laws of this state and as may be applicable under federal law.
(c) The commissioner may refer suspected violations of law relating to this article to appropriate state or federal agencies for investigation, prosecution, civil penalties and other appropriate enforcement actions.
(c) The commissioner may refer suspected violations of law relating to this article to appropriate state or federal agencies for investigation, prosecution, civil penalties, and other appropriate enforcement actions.
(a) A person shall apply to the commissioner to make an innovative financial product or service available to consumers in the financial technology sandbox, based on the office that administers the statute or rule, or portion thereof, for which a waiver is sought.  If the commissioner administers the statute or rule, or if the appropriate office is not known, an application may be filed with the commissioner.
(a) A person shall apply to the commissioner to make an innovative financial product or service available to consumers in the financial technology sandbox, based on the office that administers the statute or rule, or portion thereof, for which a waiver is sought.
If the commissioner administers the statute or rule, or if the appropriate office is not known, an application may be filed with the commissioner.
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The person shall specify in an application the statutory or rule requirements for which a waiver is sought, and the reasons why these requirements prohibit the innovative financial product or service from being made available to consumers.
The person shall specify in an application the statutory or rule requirements for which a waiver is sought, as well as the reasons why these requirements prohibit the innovative financial product or service from being made available to consumers.
(c) Before an employee applies on behalf of an institution, firm or other entity intending to make an innovative financial product or service available through the financial technology sandbox, the employee shall obtain the written consent of the institution, firm or entity before filing an application under this section.
(c) Before an employee applies on behalf of an institution, firm, or other entity intending to make an innovative financial product or service available through the financial technology sandbox, the employee shall obtain the written consent of the institution, firm, or entity before filing an application under this section.
(d) The individual filing an application under this section and the individuals who are substantially involved in the development, operation or management of the innovative financial product or service shall, as a condition of an application, submit to a criminal history background check.
(d) The individual filing an application under this section and the individuals who are substantially involved in the development, operation, or management of the innovative financial product or service shall, as a condition of an application, submit to a criminal history background check at each individual’s expense, with such background check results being sent directly to the division.
The fee shall be deposited into the financial technology innovation account as provided in §31A-9-5 of this code.
The fee shall be deposited into the Financial Technology Innovation Account created by §31A-9-5 of this code.
 In deciding to authorize or deny an application under this subsection, the commissioner shall consider each of the following:
In deciding to authorize or deny an application, the commissioner shall consider each of the following:
(4) Whether the person has the necessary personnel, adequate financial and technical expertise and a sufficient plan to test, monitor and assess the innovative financial product or service;
(4) Whether the person has the necessary personnel, adequate financial and technical expertise, and a sufficient plan to test, monitor, and assess the innovative financial product or service;
(5) Whether any person substantially involved in the development, operation or management of the innovative financial product or service has been convicted of, or is currently under investigation for, fraud, state or federal securities violations or any property based offense;
(5) Whether any person substantially involved in the development, operation, or management of the innovative financial product or service has been convicted of, or is currently under investigation for, any fraudulent act or omission, state or federal securities violations, or any property-based offense;
(6) A copy of the disclosures required under this act that will be provided to consumers;
(6) The disclosures required under this article that will be provided to consumers;
(g) If an application is authorized under this act, the commissioner shall specify the statutory or rule requirements, or portions thereof, for which a waiver is granted and the length of the initial sandbox period.  The commissioner shall also post notice of the approval of a sandbox application under this subsection, a summary of the innovative financial product or service and the contact information of the person making the product or service available through the sandbox on the Internet website of the commissioner.
(g) If an application is authorized under this article, the commissioner shall specify the statutory or rule requirements, or portions thereof, for which a waiver is granted and the length of the initial sandbox period.
(h) A person authorized under this act to enter into the financial technology sandbox shall post a consumer protection bond with the commissioner as security for potential losses suffered by consumers.
The commissioner shall also post notice of the approval of a sandbox application under this subsection, a summary of the innovative financial product or service, and the contact information of the person making the product or service available through the sandbox on the division’s website.
(h) A person authorized under this article to enter into the financial technology sandbox shall post a consumer protection bond with the commissioner as security for potential losses suffered by consumers.
The commissioner may require that a bond under this subsection be increased or decreased at any time based on risk profile.
The commissioner may require that a bond be increased or decreased at any time based on risk profile.
Unless a bond is enforced under this article, the commissioner shall cancel or allow the bond to expire two years after the date of the conclusion of the sandbox period.
The commissioner may use bond proceeds to offset losses suffered by consumers as a result of an innovative financial product or service.
 Unless a bond is enforced under this article, the commissioner shall cancel or allow the bond to expire two years after the date of the conclusion of the sandbox period.
(j) Authorization under this act shall not be construed to create a property right.
(j) Authorization under this article shall not be construed to create a property right.
(k) If an application is granted, the person authorized under this article to enter into the financial technology sandbox shall be responsible for reimbursing the commissioner for all actual costs expended in processing the application, monitoring and examining the financial technology sandbox, and enforcing the provisions of this article relevant to such applicant, including the cost of division employees at a rate of $50 per employee hour expended.
Financial technology innovation account.
Financial Technology Innovation Account.
(a) There is created the financial technology innovation account.
(a) There is created a special revenue account designated the “Financial Technology Innovation Account”.
Funds within the account shall only be expended by legislative appropriation.
Funds within the account shall be administered by the commissioner and expended only as set forth in this section.
All funds within the account shall be invested by the State Treasurer and all investment earnings from the account shall be credited to the general fund.
(b) Application fees remitted pursuant to this article and reimbursements by an applicant pursuant to §31A-9-4(k) of this code shall be deposited into the Financial Technology Innovation Account.
The account shall be divided into two subaccounts controlled by the commissioner for the purposes of administrative management.  For the purposes of accounting and investing only, the subaccounts shall be treated as separate accounts.
Funds in the Financial Technology Innovation Account shall be used only for the purpose of administering this article, including processing of sandbox applications, monitoring and examining any financial technology sandbox, and enforcement activities relating to this article.
(b) Subject to legislative appropriation, application fees remitted to the account pursuant to this article shall be deposited into the subaccount controlled by the commissioner based on the receiving official.
These funds, and any additional funds appropriated by the Legislature, shall be used only for the purposes of administering this article, include processing of sandbox applications and monitoring, examination and enforcement activities relating to this article.
(2) That the product or service has been authorized to be made available to consumers for a temporary period by the commissioner or secretary, as applicable, under the laws of West Virginia;
(2) That the product or service has been authorized to be made available to consumers for a temporary period by the commissioner under the laws of West Virginia;
(4) That the product or service is undergoing testing, may not function as intended and may entail financial risk;
(4) That the product or service is undergoing testing, may not function as intended, and may entail financial risk;
(7) The name and contact information of the commissioner and notification that suspected legal violations, complaints or other comments related to the product or service may be submitted to the commissioner;
(7) The name and contact information of the commissioner and notification that suspected legal violations, complaints, or other comments related to the product or service may be submitted to the commissioner;
(8) Any other statements or disclosures required by the commissioner which are necessary to further the purposes of this article.
and (8) Any other statements or disclosures that the commissioner may deem necessary or to further the purposes of this article.
The commissioner may specify further records requirements under this subsection by rule.
The commissioner may specify further records requirements under this subsection.
Records made available to the commissioner under this subsection are confidential and may not be subject to disclosure under §29B-1-1 et seq., the Freedom of Information Act, but may be released to appropriate state and federal agencies for the purposes of investigation.
Records made available to the commissioner under this subsection are confidential and may not be subject to disclosure under §29B-1-1 et seq., the Freedom of Information Act, but may be released to appropriate state and federal agencies for the purposes of investigation or upon court order.
and (3) Take other actions authorized by the commissioner by rule which is not inconsistent with this subsection.
and (3) Take other actions authorized by the commissioner that are not inconsistent with this subsection.
(g) The commissioner may enter into agreements with state, federal or foreign regulatory agencies to allow persons who make an innovative financial product or service available in West Virginia through the financial technology sandbox to make their products or services available in other jurisdictions and to allow persons operating in similar financial technology sandboxes in other jurisdictions to make innovative financial products and services available in West Virginia under the standards of this chapter.
(g) The commissioner may enter into agreements with state, federal, or foreign regulatory agencies to allow persons who make an innovative financial product or service available in West Virginia through the financial technology sandbox to make their products or services available in other jurisdictions and to allow persons operating in similar financial technology sandboxes in other jurisdictions to make innovative financial products and services available in West Virginia under the standards of this article.
Revocation or suspension of financial technology sandbox authorization.  (a) The commissioner may, by order, revoke or suspend authorization granted to a person under this article if:
Revocation or suspension of financial technology sandbox authorization.  (a) The commissioner may, by order, revoke, or suspend authorization granted to a person under this article if:
(1) The person has violated or refused to comply with this article or any lawful rule, order or decision adopted by the commissioner;
(1) The person has violated or refused to comply with any provision of this article or any lawful rule, order, requirement, or decision by the commissioner;
(3) A material error, false statement, misrepresentation or material omission was made in the financial technology sandbox application;
(3) A material error, false statement, misrepresentation, or material omission was made in the financial technology sandbox application;
or (4) After consultation with the person, continued testing of the innovative financial product or service would:
or (4) After consultation with the person, in the opinion of the commissioner, continued testing of the innovative financial product or service would:
or (B) No longer serve the purposes of this act because of the financial or operational failure of the product or service.
or (B) No longer serve the purposes of this article because of the financial or operational failure of the product or service.
(b) Written notification of a revocation or suspension order made under subsection (a) of this section shall be served using any means authorized by law, and if the notice relates to a suspension, include any conditions or remedial action which shall be completed before the suspension will be lifted by the commissioner or secretary.
(b) Written notification of a revocation or suspension order made under this section shall be served using any means authorized by law and, if the notice relates to a suspension, include any conditions or remedial action which shall be completed before the suspension will be lifted by the commissioner.
(a) A person granted authorization under this act may apply for an extension of the initial sandbox period for not more than 12 additional months.
(a) A person granted authorization under this article may apply for an extension of the initial sandbox period for not more than 12 additional months.
The commissioner shall approve or deny the application for extension in writing not later than 35 days before the conclusion of the initial sandbox period.
The commissioner shall approve or deny the application for an extension in writing not later than 35 days before the conclusion of the initial sandbox period.
An application for extension by a person shall cite one of the following reasons as the basis for the application and provide all relevant supporting information that:
An application for an extension by a person shall cite one of the following reasons as the basis for such application and provide all relevant supporting information that:
or (2) An application for a license or other authorization required to conduct business in West Virginia on a permanent basis has been filed with the appropriate office and approval is currently pending.
or (2) An application for a license or other authorization required to conduct business in West Virginia on a permanent basis has been filed with the appropriate office or entity and approval is currently pending.
restitution;
restitution.
applicability of State Administrative Procedures Act (a) The commissioner may propose rules for legislative approval in accordance with §29A-3-1 et seq., of this code, to implement this article.
(a) The commissioner may propose rules for legislative approval in accordance with the provisions of §29A-3-1 et seq.
(b) The commissioner may create a new unit within the division to assist in the management of the program to be at all times staffed with one full time employee to be hired by the commissioner for the sole purpose of administering the program under this act.  (c) The commissioner may issue:
of this code to implement this article.
(1) All necessary orders to enforce this act, including ordering the payment of restitution, and enforce these orders in any court of competent jurisdiction;
(b) The commissioner may create a new unit within the division to assist in the management of the program to be at all times staffed with at least one full-time employee to be hired by the commissioner for the purpose of administering the program under this article.
(2) An order to enforce the bond posted under this article, or a portion of this bond, and use proceeds from the bond to offset losses suffered by consumers as a result of an innovative financial product or service.
(c) The commissioner may issue:
(d) All actions of the commissioner under this act shall be subject to §29A-3-1 et seq., of this code, the State Administrative Procedures Act.
(1) Any necessary orders to enforce this article, including ordering the payment of restitution, and enforce these orders in any court of competent jurisdiction;
and (2) Any order needed to enforce any bond posted under this article, or a portion of such bond, or to distribute any bond proceeds to affected consumers.
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Action History

  1. To Judiciary

  2. Committee substitute reported, but first to Judiciary

  3. To Banking and Insurance

  4. Introduced in Senate

  5. To Banking and Insurance then Judiciary

  6. Filed for introduction

Sponsors

Sponsorship breakdown

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1 sponsors · 1 co-sponsors · 150 not signed on

Sponsors (1)

Co-sponsors (1)

  • Boso

Not signed on (150)

150 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Subjects

finance technology
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Frequently asked questions

Who sponsors SB 583?
SB 583 is sponsored by Boso and Mike Azinger (Republican).
What is the current status of SB 583?
This bill died with 2019 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track SB 583?
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