In late February, the House Financial Services Committee requested feedback on its “Make Community Banking Great Again” principles. Highlighting the important role that bank-fintech partnerships play in improving access to financial services, the American Fintech Council (AFC), the trade association representing fintech companies and banks, has submitted a letter in response.
In its letter, AFC focuses particularly on the impact partnerships can have on underserved communities. AFC underscores how partnerships between regulated financial institutions and responsible fintech companies have fueled the development of transparent, technology-driven products such as responsible fintech loans, high-yield deposit accounts, credit builder tools, earned wage access (EWA), and buy-now-pay-later (BNPL) offerings.
The letter also details opportunities for the Committee to help modernise the supervisory framework governing these partnerships, specifically by improving examiner education, providing additional activity-specific guidance, and developing programs that reward proactive compliance efforts by regulated entities.
AFC also encourages continued investment in emerging technologies such as supervisory technology (suptech) to strengthen oversight and reduce regulatory burdens.
“Responsible innovation within community banks is critical to the resilience of the US financial system. When paired with responsible fintech partners, they can expand access to safe, innovative financial tools for consumers nationwide,” said Hayden Cole, director of federal government affairs at the American Fintech Council.
“We commend Chairman French Hill for his leadership in exploring a legislative framework to modernise oversight and create an environment where both responsible innovation and consumer protection can thrive.”
“The future of community banking depends on creating a regulatory environment that encourages responsible innovation and supports local institutions as they evolve to meet consumer demand,” said Ian P. Moloney, SVP and head of policy and regulatory affairs at AFC. “We look forward to working with Congress to ensure regulatory policy is pragmatic, consistent, and designed to keep pace with modern financial services.”
