WASHINGTON — Senate Banking Committee Chairman Sherrod Brown sharply criticized megabanks and fintech companies as he pitched his FedAccounts proposal to an audience of community bankers.
At an Independent Community Bankers of America virtual conference on Tuesday, the Ohio Democrat blasted the biggest banks while praising smaller institutions that he said have helped consumers and small businesses navigate the coronavirus pandemic. He also advocated for legislation supported by community banks to block approvals of financial technology and industrial loan company charters.
“People just don't trust the largest banks in this country,” said Brown. “Americans feel like they don't have control over their own money, if they put it in the bank. … That's where community banks come in. We've seen small banks step up when the biggest Wall Street banks turn their backs on Main Street. I hear stories of community banks in Ohio, making the small-dollar loans, thousands or tens of thousands, not millions, that aren’t as profitable, but are [a] lifeline to small businesses and farmers.”
Brown’s speech comes as community bankers have advocated for a ban on
Brown said ILC approvals from the Federal Deposit Insurance Corp. and fintech charters approved by the OCC allow companies to skirt tough regulations.
“Nonbanks are using ILC and OCC chartering loopholes to get around banking laws and consumer protections,” Brown said. “These options might seem like a quick fix, but they often trap people in predatory loans with sky-high interest rates.”
Brown added that he will work to pass legislation to ban ILC and fintech charters.
“We'll continue to work together to close the ILC and OCC chartering loopholes and ensure a level playing field for all institutions,” Brown said.
Brown also attempted to
“One way we can get more people through their doors is through my plan for no-fee accounts,” Brown said. “It helps give Americans more power over their own money and build relationships with banks.”
