Fintech professional Simon Taylor has shared key insights after the White House just issued an executive order under the Trump Administration requiring the SEC, CFTC, FDIC, OCC, CFPB, as well as the NCUA, to identify any applicable rules that block fintech firms within the next 90 days. Simon Taylor pointed out via social media that the US federal agencies then have another 180 days to act. He clarified that the Fed still gets 120 days to report on whether non-bank fintechs, including digital asset companies, can get direct access to Federal Reserve payment accounts, Simon explained.
This is broadly a pro-fintech Executive Order (EO), the Fintech professional argued.
For many years, fintech firms and cryptocurrency-focused companies have been trying to get master accounts at the Fed (including Custodia Bank under the leadership and guidance of Wall Street veteran Caitlin Long).
He added that Individual Reserve Banks could effectively grant or deny applications on their own, without the need for Fintechs to claim “a lack of transparency.”
He also pointed out that this Executive Order essentially asks the Fed to report on whether such independent action by central banks is legally permissible under current legal frameworks.
And if it actually is, what policies may be needed to ensure the process is consistent across all 12 major (systemically significant) banking institutions?
Simon added:
“The broader review covers bank charters, deposit insurance, and licensing. The EO explicitly names “digital asset-related services” and “blockchain-based services” in its definition of fintech. References the Bank Holding Company Act’s list of permissible financial activities.”
He also mentioned that the third-party risk management piece is worth watching as well.
The EO calls out rules that “favor incumbents at the expense of innovators” and targets guidance around bank-fintech partnerships.”
He continued:
“If you work in BaaS or embedded finance, you felt that sentence. The OCC and FDIC consent orders that froze banking-as-a-service over the past two years came largely through third-party risk enforcement in the wake of the Synapse bankruptcy and collapse of SVB, Silvergate, and Signature.”
Simon has concluded that this is arguably the most comprehensive fintech-specific executive action the US has ever issued in recent regulatory history.
Previous EOs had actually covered blockchain / digital assets.
The Fintech-focused professional added that this one now effectively covers the complete stack: digital payments, online lending, brokerage firms, custody, investment management, and capital markets.
They also pointed out that it specifically names the US federal agencies, establishes clear deadlines (something that was severely lacking under the previous Biden Administration), and actually asks some of the difficult /uncomfortable questions about Fed access that have been “deferred for a decade.”