With the change in government, there is great excitement that innovation and entrepreneurship will now garner the attention it dearly needs. Fintech, or innovation in financial services, is one area of the economy that suffered during the Biden Administration. As both houses of Congress are handed over to Republicans, it creates an epic opportunity to right this wrong.
The American Fintech Council has issued a statement urging Congress to move with haste, requesting “swift bipartisan action” on a slew of items. At the top of the list are; True Lender, Earned Wage Access (EWA), and FAIR Exams Act.
These policy issues are outlined as follows:
- True Lender Legislation: As previously introduced, the Modernizing Borrower Credit Opportunities Act would establish a clear federal legislative standard that explicitly clarifies financial institutions as the originators of loans in a bank-Fintech partnership and preserves the protections afforded to financial institutions under the Depository Institutions Deregulation and Monetary Control Act and National Bank Act. This legislation aims to promote consistency and clarity in lending markets and increase the availability of affordable credit across the nation, ensuring that state-chartered community banks can partner with fintech companies to offer much-needed responsible, safe, and affordable credit to consumers.
- The Earned Wage Access Consumer Protection Act: Representative Bryan Steil’s is leading this legislation and this bill aims to create a uniform framework to govern earned wage access (EWA) products, ensuring they remain accessible, consumer-friendly, and appropriately regulated. EWA is not a loan, and should not be regulated as such, and this bill seeks to create an appropriate framework for this emerging industry.
- The FAIR Exams Act: Incoming House Financial Services Committee Chairman French Hill sponsored this bill, which seeks to bring transparency and accountability to financial institution examinations and enhance confidence in the regulatory process. The legislation strives to increase transparency and accountability in bank examinations and create a robust appeals process for legitimate disagreements between financial institutions and their regulators.
Hayden Cole, Director of Federal Government Affairs at AFC says the 119th Congress has a “unique opportunity to advance policies that enhance financial security, expand access to financial services, and support the everyday financial needs of working families across the country.”
The AFC says it looks forward to working with Chairman French Hill and Ranking Member Maxine Waters in the House, as well as Chairman Tim Scott and Ranking Member Elizabeth Warren in the Senate. The reality is they can expect little to minimal support from Waters and Warren but with the Majority controlled by Republicans it will not matter.