Clinton Pledges to Cut Small Bank Regs, Embrace Fintech

WASHINGTON – Democratic presidential nominee Hillary Clinton renewed her pledge Tuesday to cut regulations for community banks and credit unions while also signaling plans to embrace the burgeoning fintech sector.

In an op-ed on LinkedIn, Clinton specifically cited the need to cut red tape for smaller institutions, emphasizing that doing so will expand access to credit for small businesses.

"We also need to make it easier for small businesses to get financing," Clinton wrote. "My plan will reduce unnecessary regulations on local community banks and credit unions, while defending tough the new rules on big Wall Street banks. And we'll make it a priority to expand access to credit and capital for underserved communities, from inner cities to Coal Country to Indian Country."

She provided further details in a fact sheet released alongside the op-ed, calling community banks and credit unions the "backbone of small-business lending in America."

The fact sheet highlighted the fintech industry, saying Clinton wants to "harness the potential of online lending platforms and work to safeguard against unfair and deceptive lending practices."

While Clinton has previously pledged to cut regulations for small banks, the op-ed is her most high-profile statement on the issue to date – and comes after the Democratic National Convention pushed her agenda in other areas further to the left. Privately, some bankers have wondered how committed Clinton is to regulatory relief. By making it a core piece of her plan to help small businesses, she appears wedded to the proposal.

Her mention of online lending is also significant. The fintech sector has been expanding by leaps and bounds during the past few years – but neither Clinton nor Republican presidential nominee Donald Trump has appeared to pay any attention to it. The fact sheet's brief mention of it signals that Clinton's campaign sees its potential to expand credit, but refers to fears by some consumer groups that some fintech firms engage in dubious practices.

Moreover, the Clinton plan touches on other areas important to banks, including fostering the development of community development financial institutions and expanding the authority of the Small Business Administration.

It calls for expanding and making permanent the new market tax credit and "doubling support for" CDFIs and the State Small Business Credit Initiative.

Additionally, Clinton wants to give the SBA administrator the authority to continue providing 7(a) loan guarantees to small businesses "if demand is higher than the yearly cap," according to the fact sheet. It also calls for expanding the SBA's working capital guarantee programs and lowering capital fees for businesses in underserved communities.

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