By Kenneth Kelly
As someone who completed his undergraduate degree at Auburn University, then followed it up with an MBA from the University of Alabama, you might say that I’m well acquainted with a highly competitive environment.
When you think about it, that’s really a trait that all bankers share. We’re no strangers to competition. We not only compete against ourselves for market share, we also compete with a whole host of other nonbank financial service providers — from Farm Credit System lenders, to stablecoin issuers, to credit unions.
Competition is vital for our economy: It gives consumers choices, and it keeps innovation moving forward, as banks and others must constantly evaluate and improve their offerings to gain and retain loyal customers.
America’s banks welcome competition!
ABA continues to be a staunch advocate for policies that encourage a level playing field within the financial services marketplace.
Our point of view is simple: If you’re conducting bank-like activity, you should be subject to bank-like rules and regulations.
Credit unions should be subject to lending regulations similar to the Community Reinvestment Act for banks. Stablecoin issuers and other novel fintech companies should adhere to strong consumer protection rules. Data protection and privacy rules should be clear and consistently applied across the board.
But what we don’t want is a scenario where the rule book heavily favors one side over another. In other words, we don’t want our competitors — be they credit unions, fintech firms or others — starting on the 50-yard line every possession, but we’re starting from our own 25-yard line after every touchback.
In recent months, much of that fight has been centered on the future of stablecoin regulation. ABA has led the way in pushing back against a problematic loophole left by the GENIUS Act that allows stablecoin issuers to offer yield-like rewards through partners and affiliates.
This clearly wasn’t what Congress intended when they passed the GENIUS Act, and ABA and others have raised serious concerns about what it could mean for bank lending in the long-term if billions of dollars in deposits migrate out of banks and into crypto wallets.
It’s no secret that our financial ecosystem is constantly evolving. There will always be new players getting into the game. Some of them might be a flash in the pan (anyone remember how NFTs were going to revolutionize finance?) while others might have stronger staying power.
That’s why we need clear guardrails to ensure that we support a competitive landscape and give consumers the ability to make responsible choices about who to partner with to manage their finances.
I know the future of financial services will evolve. I know America’s banks are suited up and will always be on the field ready to play.
All we ask is that it’s a fair game.
ABA Chair Kenneth Kelly is chairman and CEO of First Independence Bank in Detroit.
