Fintech regulations

Small banks have long led the campaign against industrial loan companies, arguing they can be used to violate the separation of banking and commerce. But now the industry’s heavyweights are also taking a hard line in response to an FDIC proposal that would give tech companies a smoother path into the lending business.

Technology has helped banks expand globally, but complying with country-specific laws restricting data flows is a constant struggle.

Acting Comptroller of the Currency Brian Brooks says financial institutions are needed more than ever to “sustain existing businesses” and help entrepreneurs rebuild. Meanwhile, reforming the Community Reinvestment Act, he says, can “unblock opportunities” in minority neighborhoods.

Recent steps that would help nonbank lenders enter the traditional banking system, like a proposal clarifying the industrial loan company charter, are needed but face strong opposition.

The company's plan had drawn strong criticism from bankers about Rakuten's potentially controlling an industrial loan company while engaging in its nonfinancial businesses.

In signing off on deposit insurance for the payments giant and student loan servicer, the FDIC sanctioned the first new industrial loan companies in over a decade.

Online platforms and apps can be utilized to quickly support small businesses and consumers facing unexpected financial hardship.

Most states have some kind of pricing limit on consumer loans. But proposals for a national usury law divide even Democrats, some of whom are concerned about restricting credit.

LendingClub and Varo Money are making inroads into the traditional financial system, but other fintechs still face long odds.

Bankers groups are keeping close tabs on a host of legislative and gubernatorial proposals, from prize-linked savings accounts in Iowa to rent control in Massachusetts to a slew of bills modeled after California's recently passed data privacy law.