In a hearing on Tuesday, the Congressional Fintech Task Force heard arguments on new rules that would potentially expand banking regulations to accommodate more technology firms providing financial services.
A subunit of the Financial Services Committee, the Fintech Task Force leads the committee’s examinations of emerging technologies. As Task Force Chair Stephen Lynch (D-MA) noted, “Banking is becoming less centralized. Consumers are facing more choices than they ever have.”
Banking the unbanked?
Much of the back-and-forth in today’s hearing was as to whether or not loosening the rules of banking — which would allow more firms to, for example, offer loans — would properly extend financial access. Lynch, for one, noted that “One of the great promises of fintech was the idea that it might help us to bank the unbanked. The evidence is really mixed.”
In response to a line of questioning from Representative Rashida Tlaib (D-MI) about whether fintechs had lived up to this promise, witness Raúl Carrillo of the Demand Progress Education Fund said:
“I have not seen any hard evidence that these private fintech companies are quote unquote saving the day. In fact, I am worried about these transactions happening without proper protections.”
Carrillo also warned against Big Tech entering into finance, in keeping with similar concerns from Maxine Waters (D-CA), Chairwoman of the full committee. “We are especially concerned by dominant tech platforms’ recent encroachment into payments, most notably the proposed Facebook Libra project,” said Carrillo.
Conversely, Everett K. Sands, founder and