As the Treasury prepares to issue its report on nonbank fintech issues, the American Bankers Association today released a white paper featuring 11 fintech policy recommendations that would facilitate innovation both inside and outside of the regulated banking system and promote partnerships between banks and nonbanks.
Specifically, ABA recommended that regulators: clarify rules to ensure customers can securely share their personal data; think about third-party risk management in innovative ways; provide fintech companies with a path to become banks while ensuring a level playing field; provide a viable process for testing new technologies; modernize how the Community Reinvestment Act is applied; reevaluate the overbroad definition of a brokered deposit; and revisit Regulation D. ABA also urged Congress to codify the “valid-when-made” doctrine and to allow banks to use digital driver’s license images to open accounts, both of which would be accomplished by pending legislation. Finally, ABA recommended that the Federal Communications Commission revisit its interpretation of automated calling rules to promote efficient communication.
“Regulation must be flexible enough to allow innovations to be driven from within traditional banks,” ABA said. “We must also ensure that customers receive the protection they deserve wherever they get their financial services through consistent regulation and oversight.” The white paper also outlines ABA’s broad framework on fintech: that regulators continue working to understand the effects of innovation on banking, that regulators allow banks to move quickly in this area and that security remain a top priority. For more information, contact ABA’s Rob Morgan.