WASHINGTON—NAFCU has written to the Federal Housing Finance Agency’s (FHFA) Office of Financial Technology in response to its RFI on fintech in housing finance, expressing support but also urging the FHFA to protect “the safety and soundness of the housing finance system.”
Senior Regulatory Affairs Counsel Aminah Moore told the FHFA that when integrating fintech into housing finance it should consider the benefits and risks as well as “all parties’ willingness to accept financial innovation, especially underserved low-income borrowers.”
She recommended the agency work with the NCUA to facilitate “responsible innovation” in housing finance.
Fintechs & Risks
In addition, the letter also addressed risks associated with fintech in mortgage origination and housing finance, with Moore stating fintechs have innovated the mortgage origination process by improving data processing, allowing for a quicker mortgage process. However, she also cautioned fintech innovation in housing finance has its limitations, such as no human interaction, higher interest rates, and cybersecurity concerns.
The FHFA should “remain consistent in the integration of fintech for all of its regulated entities” and to mitigate the risks non-depository fintech lenders pose, Moore stated.
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