The U.S. is producing many fintech startups attractive to investors but not as attractive as the Asian startups. The third quarter of 2016 was the second of the year in which Asian fintech companies attracted more venture capital funding than North America. America remains a fintech leader, but its position is being challenged.
One reason is that the U.S. fintech hubs are subject to regulation at the state level, by the Department of Financial Oversight in California and the Department of Financial Services in New York, respectively. Another is the lack of government support and collaboration with businesses in innovative fields.
One major step undertaken by the U.S. government to deal with the problem is the attempted creation of a “sandbox” on the model of the successful U.K. one, with the Financial Services Innovation Act of 2016.
Some information source says new regulation specific to fintech may not be coming at all, and the lack of clarity about the administration’s economic plans will likely slow investment in the sector.
In my opinion, the U.S. government should clarify the law and regulations on fintech industry as soon as possible. The damaging effects of the uncertainty of regulations on American fintech growth, are likely to continue until specific steps are outlined to ease and clarify the regulatory burden facing U.S. companies.
Source: https://techcrunch.com/2017/02/16/us-regulatory-environment-threatens-the-rise-of-fintech/
I agree with your point that regulations are too much here in the U.S. for start ups. I think some legislators have already proposed to remove the state regulations for fintech companies and establish only one set of rules that they need to follow. This could obviously reduces compliances that fintech companies need to meet.