WASHINGTON––The U.S. Department of the Treasury has released a report related to fintechs that identifies improvements to the regulatory landscape it says will “better support nonbank financial institutions, embrace financial technology, and foster innovation.”
The “Report on Nonbank Financials, Fintech, and Innovation” is Treasury’s fourth report in response to Executive Order 13772. Issued by President Trump in February 2017, this E.O. calls on Treasury to identify laws and regulations that are inconsistent with the Core Principles for financial regulation it set forth.
Credit unions are not specifically mentioned in the report outside of the general context of being in the financial services community.
In drafting the report, Treasury said it consulted extensively with a wide range of stakeholders focused on consumer financial data aggregation, lending, payments, credit servicing, financial technology, and innovation.
“Treasury’s recommendations are designed to facilitate U.S. firm innovation by streamlining and refining the regulatory environment,” Treasury said in a statement. “These improvements should enable U.S. firms to more rapidly adopt competitive technologies, safeguard consumer data, and operate with greater regulatory efficiency.”
Treasury Recommendations
Treasury’s report identifies just over 80 recommendations that it says are designed to:
- Embrace the efficient and responsible use of consumer financial data and competitive technologies
- Streamline the regulatory environment to foster innovation and avoid fragmentation
- Modernize regulations for an array of financial products and activities
- Facilitate “regulatory sandboxes” to promote innovation
In response to the report, NAFCU CEO Dan Berger issued a statement saying, “How finechs operate in the financial services marketplace is a critical issue for credit unions, both now and into the future. We thank the Treasury Department for taking into consideration many of NAFCU’s policy recommendations relating to small-dollar lending, TCPA and data breach notifications. While many credit unions partner with fintechs to deliver valued products and services, we believe it to be in the best interest of agencies to balance the desire for regulatory flexibility with concern for overall marketplace stability. We support Treasury’s effort to promote financial innovation and better the lives of American consumers.”