In late February, the Home Monetary Providers Committee requested suggestions on its “Make Group Banking Nice Once more” ideas. Highlighting the essential function that bank-fintech partnerships play in enhancing entry to monetary companies, the American Fintech Council (AFC), the commerce affiliation representing fintech corporations and banks, has submitted a letter in response.
In its letter, AFC focuses notably on the affect partnerships can have on underserved communities. AFC underscores how partnerships between regulated monetary establishments and accountable fintech corporations have fueled the event of clear, technology-driven merchandise akin to accountable fintech loans, high-yield deposit accounts, credit score builder instruments, earned wage entry (EWA), and buy-now-pay-later (BNPL) choices.
The letter additionally particulars alternatives for the Committee to assist modernise the supervisory framework governing these partnerships, particularly by enhancing examiner schooling, offering further activity-specific steering, and growing packages that reward proactive compliance efforts by regulated entities.
AFC additionally encourages continued funding in rising applied sciences akin to supervisory know-how (suptech) to strengthen oversight and scale back regulatory burdens.
“Accountable innovation inside group banks is crucial to the resilience of the US monetary system. When paired with accountable fintech companions, they will increase entry to protected, progressive monetary instruments for customers nationwide,” stated Hayden Cole, director of federal authorities affairs on the American Fintech Council.
“We commend Chairman French Hill for his management in exploring a legislative framework to modernise oversight and create an setting the place each accountable innovation and client safety can thrive.”
“The way forward for group banking will depend on making a regulatory setting that encourages accountable innovation and helps native establishments as they evolve to satisfy client demand,” stated Ian P. Moloney, SVP and head of coverage and regulatory affairs at AFC. “We sit up for working with Congress to make sure regulatory coverage is pragmatic, constant, and designed to maintain tempo with trendy monetary companies.”
