Nichols Emphasizes Competition, Innovation in Philly Fed Speech

With banks engaged in advanced technological innovation and fintech firms pursuing a wide variety of strategic paths, American Bankers Association President and CEO Rob Nichols today laid out his views on competition in the financial industry in a speech at a fintech conference hosted by the Federal Reserve Bank of Philadelphia.

For example, ABA welcomed the OCC’s efforts to develop a special-purpose national bank charter for fintech firms, provided the company “abides by the same consumer protection rules and have equivalent charter responsibilities as other banks,” he said. He also acknowledged applications by two nonbank technology firms to form industrial loan companies, calling for a “full public debate” about the suitability of the ILC charter for tech companies and how it affects the line between banking and commerce.

Nichols emphasized ABA’s commitment to innovation and to charter choice for all banks — ILCs, savings banks, trust banks, mutual and Subchapter S banks among them. “We do not wish to build a fence around the industry to keep disruptors out; that would be naïve, dangerous and a disservice to our customers,” he said. “We know that financial innovation will occur with or without banks, and a fence would only serve to trap banks inside. We believe the best solution for customers is fintech delivered in partnership with regulated financial institutions.”