The call for more fintech regulation in the United States got slightly louder this week with the latest push from domestic banking regulations to engineer a new framework aimed at policing and governing the fintech industry, following its rapid ascension in the country.
One of the most common complaints at present is the opposition and oversight that is felt by traditional venues and startups alike – that there a need for a new set of rules does not appear to be contested, though how and by what means this will be accomplished this is up for debate.
In its most basic sense, many companies and startups are simply hoping for a conversation, given the need for receptivity towards a number of potentially stifling issues facing the fintech industry. Rather, there is a growing sense around the industry that there needs to exist a level of responsible innovation, as stated by Amy Friend, chief counsel with the Office of the Comptroller of the Currency.
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This Thursday, the office will be releasing a white paper that outlines exactly these trends. This will help clarify guidelines for fintech companies and products, ranging from online lending to digital currencies. However, the document is unlikely to elicit many of concrete specifics, given that this is an initial bid to tackle this dilemma and address what has been for many a prevalent issue in the industry.
Subsequently, the OCC, an independent bureau arm within the US Treasury Department, will take calls and formal comments following the document’s release and could ultimately begin issuing guidance and rules based on that feedback. The aforementioned paper will aim to kindle a fruitful discussion on how to set up a new framework within the OCC such that companies can have a main point of entry to submit an innovative idea.
A number of global and domestic regulators have recently honed their focus onto the fintech space, however to date there has been little collaboration and oversight issued. Instead, focus has been on specific realms such as faster payments and vendor oversight. One of the few US initiatives of note was undergone by the Consumer Financial Protection Bureau. In this instance, the Bureau increased scrutiny of the fintech firms that came under its mandate to oversee non-banks, culminating in the launch of a program called “Project Catalyst”. This program helps allow innovators to pitch their ideas to the agency in the hope that it won’t take immediate enforcement.