Fintech Could Get More U.S. Regulation
Financial startups reportedly could have a new governing structure. The federal Office of the Comptroller of the Currency, a Treasury Department unit that charters and regulates national banks, soon will issue a paper called “Responsible Innovation” that will serve as the kickoff for a program to regulate new fintech, according to the Wall Street Journal. Such a program would address “complaints” from banks and startups that regulations in place now neither encourage innovation nor give proper oversight for new fintech.
The paper is expected to be released Thursday and is written to spark discussion about how to regulate a sector that can include digital money, online loans and other programs, WSJ reports.
In the absence of such regulations, companies may seek a “no-action” letter from the CFPB, which says it wants to encourage consumer-friendly innovation. “No-action letters may, in some situations, provide payments companies with a degree of assurance that a product or practice will not lead to an enforcement or supervisory action by the CFPB,” wrote David Beam of Mayer Brown LLP in a recent Viewpoint for Paybefore.com. Beam also highlights the risk of asking for such a letter, including opening yourself up to scrutiny.