The National Association of Federally-Insured Credit Unions (NAFCU) urged the Office of the Comptroller of the Currency (OCC) to hold fintech companies to the same institution regulations if they are allowed to operate as banks.
In December 2016, the OCC proposed the idea of chartering financial technology, or fintech, companies as banks. In a comment letter to the OCC, NAFCU Regulatory Affairs Counsel Andrew Morris said the organization supports the idea if the fintechs are properly regulated.
“Innovation in financial services and technology contributes to the growth of the entire financial sector,” Morris said. “However, NAFCU believes that fintech companies require a minimum level of regulation and supervision to ensure fair competition and consumer protection.”
NAFCU contends that chartered fintech companies should be held to the same regulations as banks and credit unions.
“The fintech market consists largely of peer-to-peer lenders, aggregators, hedge funds, and other non-bank entities that have benefited from the limited reach of consumer protection laws,” Morris said. “While the current environment has promoted rapid growth of fintech companies, NAFCU and our members are concerned that consumers may be on the receiving end of a bad bargain.”
Morris also said fintech companies should be held to greater cybersecurity standards because of the large amounts of online financial data. He recommended they be required to use the Federal Financial Institutions Examination Council’s cybersecurity assessment tool.