WASHINGTON—At a time when the Office of the Comptroller of the Currency and the FDIC are looking at giving federal bank licenses to fintechs, the Federal Reserve
isn’t keen on giving them access to the financial infrastructure.
Reuters reported that while the White House wants fintechs to be granted banking licenses as part of a broader plan to increase small businesses and job growth, fintechs told Reuters they aren’t keen to invest in expansion in the U.S. if they don’t have access to the payment systems, settlement services and other Federal Reserve resources that the Fed has yet to decide if it should let fintechs access.
Reuters stated that officials at the Fed are concerned fintechs don’t have the strong risk management controls and consumer protections in place that the banks have.
“They probably do want access to the payments system, but they don’t want the regulation that would come with that access,” St. Louis Fed President James Bullard told Reuters. “I am concerned that fintech will be the source of the next crisis.”