WASHINGTON – Financial technology companies should be examined for safety and soundness just like banks and credit unions, top executives from the Independent Community Bankers of America said Tuesday.
“Everybody should be playing in the same ballpark,” Camden Fine, the ICBA's president and chief executive, said during a press conference here. “I think all stakeholders that are making loans … should be playing by the same rules.”
Fine’s remarks keyed in on a growing concern in Washington about the explosion of fintech companies that are making both personal and business loans. Last week a group of Democratic senators requested that the Government Accountability Office update a report on fintech regulation.
Fine likened the lack of oversight to the run-up to the financial crisis and the bursting of the mortgage bubble, saying “risk can concentrate” in areas where “you don’t want that risk to concentrate.”
“Not only are they not subject to some of the other regulations of other participants whether they are credit unions or banks, there also is no supervisory body that is going into those firms and saying, ‘Are you applying by the rules that you are subject to?’ and if you have no one that is checking up on you it is easy to start cutting corners,” Fine said.
Karen Thomas, the group's senior executive vice president, said she believes that the Consumer Financial Protection Bureau will increase its scrutiny of fintech companies, but that it would be focused only on consumer protection and not safety and soundness.
“What type of capital should they maintain? What type of risk management do they have?” Thomas asked.