The discontinuation of Mint is undoubtedly an opportunity, but it also signals a threat.
Regulators should be concerned that a stablecoin integrated with traditional financial services would introduce a new risk to deposit safety and, more broadly, financial stability.
The CFPB has taken steps to regulate large nonbank firms that provide digital payments services, including P2P payments, mobile wallets, and other payment apps, proposing a new rule that would establish its supervisory authority over certain nonbank covered persons participating in a market for “general-use digital consumer payment applications.”.
The Financial Stability Oversight Council adopted a new analytic framework for gauging financial stability risks and approved updated guidance for determining whether nonbanks should be subject to Federal Reserve supervision.
We should think twice about creating a regulatory framework that drives business away from the brightly lit world of highly regulated banks and into the shadows of private credit.
“Banks have long supported consumers accessing their own data, but believe it should be done in a safe and sound way that provides them with control,” says ABA VP Ryan Miller. With respect to Section 1033 of the Dodd-Frank Act, the CFPB “has attempted to put that into place here.”
Nonbank financial institutions have become an integral part of the financial services landscape, and as a result, banks and nonbanks need to be viewed as “an interconnected whole and overseen accordingly,” FDIC Chairman Martin Gruenberg said.
The Consumer Financial Protection Bureau this week proposed creating a public registry of terms and conditions in non-negotiable, nonbank contracts that claim to waive a customer’s ability to take certain actions, such as petitioning for bankruptcy or suing the company
According to the report, while fintech firms enable new capabilities, they also create new risks related to data privacy and regulatory arbitrage.
The Financial Stability Board issued a set of policy proposals aimed at addressing systemic risk in the non-bank financial intermediation sector, which the group said are intended to “reduce liquidity demand spikes; enhance the resilience of supply in stress; and enhance risk monitoring and the preparedness of authorities and market participants.”