In his April 2016 appearance before the Senate Banking Committee, Director Cordray made clear that FinTech companies are on the CFPB’s radar screen. In particular, he indicated that while FinTech companies should not have an advantage in the marketplace over banks because they are not complying with same rules, the CFPB would seek to enforce the laws without stifling innovation.
On June 23, 2016, the OCC will hold a forum in Washington, D.C. on “Supporting Responsible Innovation in the Federal Banking System.” The forum will bring together representatives from banks, financial technology companies, and community and consumer groups to discuss developments, opportunities, and challenges related to financial innovation. Topics will include risk management and strategic planning, financial inclusion, consumer protection, supervisory expectations, and regulatory concerns. Registration is free.
In March 2016, the OCC released a white paper: “Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective.” The white paper recognizes that many innovations in financial services, such as those related to mobile wallets, distributed ledger technology, and marketplace lending, are taking place outside of the banking industry, often in lightly-regulated FinTech companies. In order to understand these new technologies, render timely decisions on matters requiring regulatory approval, and issue guidance about the OCC’s supervisory expectations, the OCC seeks to develop a framework for evaluating products, services, and processes that encourages responsible innovation. The white paper discusses the OCC’s eight guiding principles for responsible financial innovation. For more on the white paper, see our legal alert.