FinTech, Big Tech and the Safety of the Banking System
Keeping the US banking system safe and stable has been a persistent challenge for policymakers. Over the past 150 years, Congress has enacted several measures to strengthen the legal and regulatory framework for banks in response to episodic banking crises, and through its actions, deepened the social compact with banks.
Through the passage of laws like the
- National Bank Act (1864);
- Federal Reserve Act (1913);
- Federal Deposit Insurance Act (1950); and
- Bank Holding Company Act (1956)
Congress articulated a clear view that to enjoy the benefits of being a bank – the right to accept deposits, lend and process payments with the benefit of the federal safety net (FDIC insurance or access to the discount window) –banks are expected to act prudently and comply with a meaningful regulatory and supervisory framework.
Unfortunately, the safety and stability of our system is at risk as technology companies seek to act more and more like banks, but without adhering to a prudential framework. They seek all the benefits of being a bank without taking on the duties and responsibilities that come along with it.
Banking is safe, strong and stable. Keep it that way.
- Comparing Supervisory Frameworks: Bank Holding Companies vs. ILC Parent Companies
- FinTech Access to Fed Accounts and the Nation’s Payments Systems: A Primer
- Financial System Integrity Depends on Congressional Action on ILCs
- BPI President and CEO Greg Baer Submits Formal Statement for HFSC Subcommittee Hearing Examining Trends in Financial Institution Charters
- Tangled Up in Technicalities – An Historical Perspective on the Current ILC Debate
- 2021: The Year Banking Charters Reach a Tipping Point
- Banking and Consumer Groups Urge Congress to Close Statutory Loophole in Response to FDIC Final Rule on ILCs
- Response to “Chartering the FinTech Future”
- BPI Responds to FDIC Approval of Final Rule on ILCs
- IntraFi Network: The “Precedent-Shattering” Charter Application That Has Banks on Edge