Removing Barriers Blog

Treasury Report on FinTechs and More
Posted August 01, 2018 by CUNA Advocacy

Yesterday, the Treasury Department released its much-anticipated Report on Nonbank Financials, Fintech, and Innovation.  This is the fourth and final report on the financial regulatory landscape to be issued by the Department, which was required to conduct its review pursuant to an executive order by President Trump. 

In total, the Report contains over specific 80 recommendations for regulatory and legislative action that would better encourage innovation and regulatory efficiency.  While many expected the Treasury Department to voice its support for the creation of a unified “regulatory sandbox” and the national bank charter for online lenders, there are several other recommendations that stand out as especially noteworthy for credit unions. 

The Report called on the Bureau of Consumer Financial Protection (BCFP) to completely rescind its Payday Rule.  This is part of an effort by the administration to support the development of regulatory programs that would allow more depository institutions to serve individuals in need to short-term, small dollar credit.  It should be noted that CUNA supports the BCFP’s current initiative to substantially revise the Payday Rule to minimize its impact on credit unions’ small dollar lending.  Predatory payday lenders are typically the type of bad actors that should be the focus of effective regulation by the BCFP.  However, the removal of a federal rule in favor of state regulation, as Treasury recommended, is a proposal that needs further evaluation and CUNA looks forward to working with the Administration and the Bureau as they consider the matter.  

In addition, Treasury called for the Federal Communication Commission (FCC) to modernize the Telephone Consumer Protection Act (TCPA).  Specifically, Treasury recommended the FCC continue the development of its reassigned numbers database and caller safe harbor, provide clear guidance on reasonable methods for consumers to revoke consent, and called on Congress to revise elements of the TCPA statute.  The Report mirrored recommendations CUNA has previously made regarding modernizing the TCPA as recently last week

These are just two examples of recommendations that could have a direct impact on credit unions. However, there are many more – from supporting revisions to the Fair Debt Collection Practices Act (FDCPA) to protecting consumer data held by credit reporting agencies – that CUNA will continue to evaluate to ensure that any action taken is in the best interest of credit unions.