Fintech, like all US financial services. UU. Each of the 50 states and the federal government has passed its own body of laws that can be applied to financial services and financial service providers. As with banks, there is no single regulatory or licensing agency that oversees fintech companies.
Depending on their activities, local, state or federal regulators may authorize or supervise them in a functional or activity-based manner. Consumer Financial Protection Bureau (CFPB) The CFPB is a single point of responsibility for enforcing federal consumer laws and protecting consumers in the financial market. Federal Deposit Insurance Corporation (FDIC) The FDIC insures bank deposits and acts as the primary safety, soundness and consumer protection regulator for institutions that are not members of the Federal Reserve System. Contact the FDIC for information and regulations that may affect how your company works with the banks that the FDIC oversees.
Finally, it is vital to remember that fintechs operating in the United States will be regulated not only by federal agencies but also at the state level. Laws can vary significantly between states and the compliance landscape is complex, but some steps are being taken to simplify and streamline regulatory frameworks at the state level, as we'll see in a later section. Consumers are increasingly using tools based on non-banking technology, such as mobile phones and fintech applications, to move money between accounts. Securities regulators, the SEC and the CFTC, focus on any security-related activity, including those of fintech companies.
As a technology enthusiast, he has initiated and participated in the development of hundreds of web and mobile applications, fintech platforms and digital ecosystems. Standard-setting with a specific focus on fintech companies is relatively rare, but banking regulators occasionally issue rules or proposed rules that have some tangential impact on fintech companies, such as a recently proposed FDIC standard on traded deposits. These regulators generally have a limited concern for the safety and soundness of companies in their jurisdiction, focusing on disclosure requirements and contracts to promote investor protection and efficiency in the market. Prudential regulator for non-member state banks; deposit insurer for national and state public banks; judicial administration and resolution authority for bankrupt banks.
Given their broad responsibilities, banking regulators can engage and respond to financial technology in many ways, including. OCC's efforts are specifically targeted at fintech companies, and FDIC efforts could affect a fintech company's opportunity to become a chartered bank. Generally, fintech companies are not banks or licensed credit unions; however, banks and credit unions often form partnerships with fintech companies, and banking regulators have legal authority to examine these types of relationships. For example, PayPal, one of the oldest fintech firms, has money transmission licenses in all 50 states and has a regulator for each state or territory in which it operates.
Even fintechs that offer relatively simple products or services will likely have to obtain licenses from multiple federal and state regulators, and meet the requirements set by those bodies. Fintech companies, such companies must comply with the general regulatory and licensing framework described in this document. The asset management industry is increasingly using fintech to conduct investment research, operate and improve services to its clients. In addition, the number of actions that address customer treatment suggests that consumers expect regulatory protection associated with fintech products and services that are similar to those of banks, but offered through non-traditional channels that focus on ease and pace of access.
Office of the Comptroller of the Currency (OCC) The OCC creates, regulates and supervises all national banks and federal savings associations, as well as federal branches and agencies of foreign banks. Analyzes domestic and international payment systems and the banking industry, including supervisory and regulatory concerns, lending problems and risks to financial institutions. . .