WASHINGTON — Federal Reserve Chair Jerome Powell said he would support subjecting non-depository institutions, such as fintechs, to the Community Reinvestment Act, but added any final decision should be left to Congress.
The credit union trade groups have also repeatedly called for greater regulation of fintechs and other emerging providers.
The Fed has in recent years engaged in discussions with other banking regulators about reforming implementation of the anti-redlining law, and the Office of the Comptroller of the Currency issued its own CRA reform rule last year.
“You do see this across payments and all sorts of financial services — you see activities that had once been principally the province of banks, moving into the nonbank sector,” said Powell in remarks to the National Community Reinvestment Coalition’s Just Economy Conference. “I would just say as a general matter, like activities should have like regulation. In terms of … the specific question, that’s really one for Congress to make a decision about, but I like to think, though, that consumers require protection and low- and moderate-income communities require credit support, regardless of the nature of the institution.
Schumer Also Wants CRA Expansion
Meanwhile, in remarks to the same meeting, Senate Majority Leader Chuck Schumer (D-NY), in pre-recorded remarks to conference participants, also expressed interest in expanding the scope of CRA.
“For years, the CRA has been crucial in making sure banks invest in low-income neighborhoods, provide mortgages, loans for small businesses and so many other things,” he said. “As we work to reform, modernize and hopefully expand the CRA, it’ll be my number one goal to refocus CRA’s priorities to benefit those who truly need help.”