WASHINGTON—Both credit union trade groups told Congress in response to a hearing here that if fintechs want to play in the financial services space, they should play by the same rules and regulations as other providers.
Members of a House Financial Services subcommittee were told last week that fintech companies should compete with financial institutions "on a level playing field of regulation – from data security to consumer protection."
Brad Thaler, NAFCU's vice president of legislative affairs, made the recommendation in a letter to Subcommittee on Financial Institutions and Consumer Credit Chairman Blaine Luetkemeyer (R-MO) and Ranking Member Lacy Clay (D-MO) ahead of the hearing "Examining Opportunities for Financial Markets in the Digital Era."
"Consumers today come to expect technological developments from their financial institution – from online banking to mobile bill pay," Thaler wrote.
Modernization Needed
He urged Congress to do more to modernize laws and regulations "to allow credit unions to keep up and compete with technological advances," and reiterated NAFCU's call for a national data security standard to hold all entities that handle consumer financial data to similar standards as credit unions under the Gramm-Leach-Bliley Act.
"[A] fintech company that permits consumers to consolidate control over multiple accounts on a single platform elevates the risk of fraud and may not be subject to cybersecurity examination in the same way that credit unions are," Thaler said.
CUNA’s Response
Meanwhile, in its own letter to the Committee, CUNA wrote, “Although CUNA supports the innovations developed and brought into the marketplace by fintech, we remain concerned the regulatory environment might create an environment in which consumers do not receive the same protections from unregulated businesses that offer services traditionally offered by credit unions and banks.”