Saying that “the road to the American Dream runs through the banking system,” Rep. Ritchie Torres (D-N.Y.) today reiterated his concern that a Federal Reserve proposal to lower the legal limit on debit card interchange fees would reduce resources for a program offering low-cost banking services to the unbanked and underbanked. He also shared his concerns about “trigger leads” and digital asset regulation.
Torres has been a critic of the Fed’s proposal to revise Regulation II to lower the interchange cap out of a concern that it will drain resources needed to support the Bank On program. During a Q&A at the American Bankers Association’s Annual Convention in New York City, Torres noted that millions of individuals have benefited from the free services Bank On provides.
“It seems to be a real crisis in the wealthiest country on Earth,” he said about the millions of unbanked and underbanked individuals. “And when you lack access to mainstream banking services, you are vulnerable to alternative financial services that are often predatory in nature.”
Torres also is a co-sponsor of legislation to prohibit trigger leads, in which credit reporting firms sell consumer contact information to lenders who then barrage those same consumers with unwanted solicitations. He was optimistic that the House Financial Services Committee — of which he is a member — would take up the bill before year’s end.
“The theory of trigger leads is that it leads to more choice and competition, but the practical reality of trigger leads is that it’s led to more aggressive telemarketing, predatory lending, and fraud and abuse,” he said.
Torres also was critical of the Securities and Exchange Commission’s efforts to regulate digital assets, but added that Congress needs to provide direction on that topic. As far as the SEC, he pointed to its Staff Accounting Bulletin 121 as an example of what the commission is doing wrong on digital asset policy.
“I have a general concern about guidance,” Torres said. “It is not a law enacted by Congress. It’s not a rule that went through the administrative rulemaking process. It’s guidance that has the force of law without the accountability and the transparency.”
