As more and more fintech companies emerge in the financial services industry, Rep. Randy Hultgren (R-Ill.) today said that that Congress’ role must be to “make sure we’re not getting in the way of innovation” and ensure a level playing field between bank and nonbank players.
“I see banks as the original innovators,” Hultgren said in a keynote address at American Bankers Association’s inaugural Payments Forum. “What is new is [that]the post-Dodd-Frank regulatory regime is oppressing innovation at depository institutions and new technology companies are coming to fill in the gaps because they don’t have to fall under some of those same regulatory requirements.”
He added that reducing regulatory burden through legislation like the Financial Choice Act — which was recently passed by the House — would provide more opportunities for banks to focus their resources on innovation rather than on compliance activities which have few benefits for consumers. “There are opportunities to update our regulatory structure to recognize evolving consumer needs and the business models that are racing to keep up with them,” he said.
He also voiced concerns about the OCC’s plans made under former Comptroller Thomas Curry to issue special-purpose national bank charters to fintech firms, adding that there is a bigger role for Congress to play in the discussion about allowing fintech companies to operate as national banks. “If a healthy debate in Congress leads to a change in the law specifying a new authority for the OCC to issue some sort of special-purpose charter, or fintech charter, then the people will have spoken at that point,” Hultgren said, adding that he welcomed further debate on the OCC proposal, and that ultimately, “all innovators should be encouraged by the change in tone at the OCC and other agencies.”