{"id":7388,"date":"2024-11-06T04:46:37","date_gmt":"2024-11-06T04:46:37","guid":{"rendered":"https:\/\/finderica.com\/3-ways-the-election-could-impact-fintech\/"},"modified":"2024-11-06T04:46:37","modified_gmt":"2024-11-06T04:46:37","slug":"3-ways-the-election-could-impact-fintech","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=7388","title":{"rendered":"3 Ways The Election Could Impact Fintech"},"content":{"rendered":"\n
\n
\n

The results of the presidential and congressional elections will have far-reaching effects on the fintech industry.<\/p>\n

Associated Press<\/small><\/figcaption><\/figure>\n

T<\/abbr>he intersection of financial services and technology, otherwise known as fintech, has increasingly come under federal scrutiny, especially to the extent new firms have attempted to offer traditional banking services without having a banking license. To better understand the impact of today\u2019s presidential and congressional elections on the fintech industry, Forbes<\/em> spoke with several policy experts and executives. They identified three major areas that could see changes: the Consumer Financial Protection Bureau (CFPB), the partnerships fintechs have with banks to offer banking services and the CFPB\u2019s new 1033 rule that governs consumers\u2019 control over their banking data.<\/p>\n

<\/fbs-ad><\/p>\n

Nearly everyone we spoke with said the most visible changes will be in the CFPB, a federal agency created by the 2010 Dodd\u2013Frank Wall Street Reform and Consumer Protection Act. The CFPB aims to \u201cprotect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.\u201d Over the past four years, the agency has been more active than it was under President Trump, a dynamic that\u2019s apparent in the number of public remarks the CFPB has made, the information requests it has sent to companies and the fines it has levied, says Katherine Flocken, a principal at Washington, D.C., regulatory advisory firm FS Vector. In 2023, the CFPB ordered $3.1 billion in fines and refunds for consumer relief, the largest sum it had ordered since 2015.<\/p>\n

If Kamala Harris wins the election and Democrats retain some control of Congress, a similar level of CFPB enforcement and oversight activity could continue as it has under President Biden, Flocken believes. If Donald Trump wins and Republicans take control of Congress, that activity will slow. \u201c[The CFPB] definitely would be less robust under a Republican administration and certainly with a Republican-controlled Congress,\u201d Flocken says.<\/p>\n

Jackie Reses, the cofounder and CEO of Lead Bank, a Kansas City bank that partners with fintechs to offer banking services, agrees there will be major changes to the CFPB if Trump is elected. She thinks some CFPB rules could potentially be rolled back, such as one the CFPB passed earlier this year that aims to reduce the late fees consumers pay for credit card payments from $32 to $8 on average.<\/p>\n

\u201cIf there’s a sweep either way\u2013if we have Harris-blue or Trump-red\u2013that’s huge,\u201d Flocken adds, referring to scenarios where Harris wins and Democrats take both the House and Senate or where Trump wins and Republicans take full control of Congress. \u201cThere will be much faster, much more aggressive changes on either side.\u201d<\/p>\n

Michele Alt, a cofounder and partner at advisory firm Klaros and a former lawyer at the Office of the Comptroller of the Currency, is more skeptical that we\u2019ll see big changes for the fintech industry. She points to four recent Supreme Court cases, including Loper Bright Enterprises v. Raimondo<\/em>, <\/em>that have reduced government agencies\u2019 authority in interpreting ambiguous laws and redirected that duty to the courts. \u201cIt doesn’t matter who gets elected, because the Supreme Court has effectively knee-capped the executive branch through these decisions by saying they all have to go through the judicial branch,\u201d she says. In the coming years, she thinks the result could be a \u201cregulatory chill\u201d of weaker regulatory power and enforcement. She worries that all regulatory agencies consequently won\u2019t be able to respond as quickly as they need to in times of financial crisis.<\/p>\n

<\/fbs-ad><\/p>\n

Have a story tip? Contact Jeff Kauflin at jkauflin@forbes.com or on Signal at jeff.273.<\/em><\/p>\n

\n

B<\/abbr>ank-fintech partnerships, where non-bank fintech companies partner with traditional banks to offer banking services like checking accounts and loans, have been under intense scrutiny over the past two years, with a growing number of regulatory enforcement actions in areas like anti-money laundering rules. If Harris wins, Flockens thinks the heavy scrutiny would continue, while if Trump is elected, the pressure would probably ease, though she adds a couple caveats. She says she\u2019d watch the offices of innovation under a Harris presidency to see if they\u2019ll staff up and have an open-door policy, and in a Trump presidency, she\u2019d look to see if the administration opens a certification process that allows fintechs to voluntarily comply with standards set by regulators.<\/p>\n

Reses doesn\u2019t expect any major changes to bank-fintech partnerships, regardless of who wins. \u201cThe FDIC has a bi-partisan board,\u201d she says. She thinks some changes will move forward no matter who\u2019s victorious, such as the FDIC\u2019s proposed rule that aims to require fintechs and their bank partners to reconcile every customer\u2019s account at the end of each day. The rule could prevent a disaster like the one that happened with Synapse, where thousands of consumers lost access to their funds. \u201cI think it\u2019s good policy,\u201d Reses says. How the rule is implemented might differ under some administrations, she adds, but she expects the rule to move forward either way.<\/p>\n

She also doesn\u2019t expect any changes in the way anti-money laundering laws are enforced or translated into regulations. \u201cBoth parties respect the need for that type of information and oversight by banks,\u201d she says.<\/p>\n

Michele Alt thinks Republicans gaining greater control over Congress and a Trump victory could re-open the path for more fintechs to potentially obtain bank charters, a door that has been effectively closed during the Biden administration. She also thinks that, in the wake of the recent Supreme Court decisions like Loper Bright,<\/em> a well-resourced fintech that has been denied a bank charter could sue one of the agencies that handles charters. In that case, \u201cThe regulators wouldn\u2019t have much to stand on to show [the court] they haven\u2019t exceeded their authority,\u201d she says.<\/p>\n

\n

L<\/abbr>ast month, the CFPB released a final 1033 rule, which sets guidelines for consumers\u2019 control over their banking data and how banks store, manage and make that data accessible. The topic has become an important battleground between big banks and fintechs like Plaid that connect consumers\u2019 bank accounts to fintech apps. Flocken says some have asked her if the rule would go away under a Trump presidency, but she doesn\u2019t think so, since it\u2019s a bipartisan regulation.<\/p>\n

<\/fbs-ad><\/p>\n

Alt points out that the CFPB\u2019s final 1033 rule was challenged almost immediately after it was released when the Bank Policy Institute and Kentucky Bankers Association sued the CFPB<\/a>, an event she thinks illustrates emboldened confidence among people and organizations that want to oppose regulatory agencies.<\/p>\n

But she also believes 1033 has a good chance of moving forward either way because it has populist appeal. \u201cThe average person doesn’t really care about bank capital levels,\u201d she says. \u201cBut if you ask, \u2018Hey, do you think you should be able to transfer your accounts more easily? Do you think you should own your own data?\u2019 One hundred percent of people are going to say yes.\u201d<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The results of the presidential and congressional elections will have far-reaching effects on the fintech industry. Associated Press The intersection of financial services and technology, otherwise known as fintech, has increasingly come under federal scrutiny, especially to the extent new firms have attempted to offer traditional banking services without having a banking license. To better<\/p>\n","protected":false},"author":1,"featured_media":7389,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[717,1577,1154,102],"class_list":{"0":"post-7388","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-election","9":"tag-fintech","10":"tag-impact","11":"tag-ways"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/7388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7388"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/7388\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/7389"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}