Popular Panel Focused on Fintechs at this year’s NCRC Conference

The financial technology (fintech) session was one of the most interesting sessions at the NCRC conference.

Grovetta Gardineer, Senior Deputy Comptroller for Compliance and Community Affairs at the Office of the Comptroller of the Currency (OCC), which regulates national banks, presented on the March 15 release of a supplement to the OCC licensing handbook related to the new OCC special purpose charter for fintech companies. She said any such charters approved to fintechs would prohibit the comingling of banking and commerce, prohibit predatory products and practices, and be subject to the same level of supervision as other bank charters – no “light touch” supervision. She described the advantages of the special purpose charter as including “uniform, clear, consistent standards and protections across all states,” as well as mandatory financial inclusion plans with regular examinations for compliance. She cited the OCC’s guidance regarding deposit advance products as evidence of how OCC would protect consumers from harm.

Katherine Roller, an attorney with the Federal Trade Commission (FTC) shared information on how the FTC investigates and litigates consumer protection cases in the area of unfair and deceptive practices in response to consumer complaints, press reports, and partner contacts. FTC jurisdiction does not include banks or common carriers and it does not have ongoing supervisory authority. The FTC obtained recent victories against debt collectors and lead generators who violated the law.

Tammy Halevy, Senior Vice President for New Initiatives at AEO, presented on a new Project Cue, which will connect small business who can’t get bank loans to vetted, responsible Community Development Financial Institutions (CDFIs) and other lenders.

Lauren Saunders, Associate Director at the National Consumer Law Center, presented some concerns regarding the use of “Big Data,” “digital redlining,” and enforcing consumer rights under the Fair Credit Reporting Act. Lauren also discussed concerns regarding the OCC special purpose charter for fintechs, including the preemption of state consumer protection laws and usury caps, misaligned incentives that encourage fintech lending without regard to borrowers’ ability to repay, and the dangers of a “race to the bottom” for the lightest touch charter and changes in leadership that could weaken the proposed OCC plans for mandatory financial inclusion and strong oversight.

Woodstock Institute president Dory Rand moderated the panel.