U.S. Treasury Official Previews Report on FinTech Regulation
By Eric A. Love
According to press reports, Craig Phillips, Counselor to the Secretary of the U.S. Department of the Treasury (Treasury), recently delivered remarks at a conference held by the Institute of International Bankers in which he previewed the upcoming Treasury report about possible reforms to the laws and regulations that apply to non-bank financial institutions and FinTech companies. It will be the fourth and final report that Treasury is required by Executive Order 13772 to release about ways to reform the U.S. financial system, consistent with the Trump Administration’s principles of regulation.
In his remarks, Mr. Phillips reportedly signaled that the report will include a review of the regulations governing mortgage originators and servicers, marketplace lenders, payment processors and other FinTech companies, and will also cover the “regulatory asymmetries” between such institutions and more regulated institutions. In this regard, Mr. Phillips is quoted as saying “[o]n the regulatory side, we’ll be making some observations on some rationalizations of what federal versus states require.” Notably, he reportedly mentioned that the Office of the Comptroller of the Currency (OCC) “has spent some time on a FinTech charter idea” and that many FinTech companies “are right on the edge of crossing over into banking services, so determining where banking begins and ends will definitely be part of our work.” Mr. Phillips’ comments follow numerous press accounts in December 2017 indicating that Comptroller of the Currency Joseph Otting seems to be open to an OCC FinTech charter.
The Treasury report is expected to be released in the coming months and will likely inform ongoing efforts in Congress and at the financial regulatory agencies to determine the appropriate approach to regulating the FinTech industry. We will continue to monitor and report on future developments.