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.
- Financial Services and Consumer Groups Support Senate Bill to Close Industrial Loan Company Loophole
- Bank, Credit Union and Consumer Groups Support Committee Vote to Close the Industrial Loan Company Loophole
- Bank, Credit Union and Consumer Groups Support Closing Industrial Loan Company Loophole Ahead of Committee Markup
- Don’t Create a New Loophole When Closing the ILC Loophole
- Banking Associations Raise ‘Significant Concerns’ with Proposed Changes to Fed Master Account Guidelines
- Banks, Credit Unions and Consumer Groups Call for Passage of Bipartisan Solution to Close ILC Loophole
- Banks, Credit Unions and Consumer Groups Support H.R. 5912, The Close the ILC Loophole Act
- Industrial Loan Company Loophole Necessitates Congressional Scrutiny and Legislative Solution
- Comparing Supervisory Frameworks: Bank Holding Companies vs. ILC Parent Companies
- FinTech Access to Fed Accounts and the Nation’s Payments Systems: A Primer