Earlier this month, a task force created by the Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger sent Congress a report with over 100 recommendations to strengthen consumer finance law, including fintech regulations. One recommendation is to authorize the CFPB to “issue licenses to non-depository institutions that provide lending, money transmission, or payments services,” or, alternatively, for Congress to clarify that the Office of the Comptroller of Currency has the authority to issue charters to those same non-depository institutions.
By centralizing the power to issue licenses to non-depository institutions, fintech companies will benefit from the removal of state regulatory hurdles and burdens, while consumers will benefit from increased competition. As the report noted, “innovation advances competition and in turn benefits consumers through greater choice, improved products, lower prices, and greater financial inclusion.”
Even though these task force recommendations are not binding, it will be interesting to see how the Biden administration reacts to these recommendations, especially with the nomination of Rohit Chopra to lead the CFPB.