Auchincloss legislation set for House floor consideration this week
WASHINGTON, D.C. – The Financial Technology Association (FTA) today announced support for H.R. 4590, the “Promoting New and Diverse Depository Institutions Act.” Championed by Congressman Jake Auchincloss (MA-04), this legislation encourages broad chartering authority for new market entrants driving competition and consumer choice in financial services.
“Financial technology companies deliver better financial services at lower costs for consumers but face roadblocks in applying for bank charters,” said Penny Lee, Chief Executive Officer of the Financial Technology Association. “We applaud Congressman Auchincloss’s work to level the playing field for market innovation and encourage the House of Representatives to advance this bill.”
In the face of increasing consolidation in the American banking industry, financial technology companies offer consumers innovative, low-cost, and transparent alternatives to traditional financial services. Yet, the pace of federal bank chartering – which provides certainty for financial technology companies and heightened oversight by banking regulators – has not kept up. The Office of the Comptroller of the Currency only approved a handful of new charters in the past decade, despite having the authority to grant charters to a diverse spectrum of banking entities.
H.R. 4590 directs federal banking regulators to study the challenges facing depository institutions, particularly minority depository institutions, seeking federal charters. For example, that could include the Federal Deposit Insurance Corporation’s failure to consider applications of de novo banks for deposit insurance, limiting their ability to apply for a charter.
The Financial Technology Association champions the modernization of financial policy and regulation to reflect innovation in the marketplace, including advocacy for broad chartering authority. FTA previously expressed support for H.R. 4590 and applauded the House Financial Services Committee for examining roadblocks facing new market entrants into our regulated financial system.
The Financial Technology Association (FTA) champions the transformative role of financial technology for American consumers, businesses, and the economy. Representing industry leaders, FTA elevates fintech’s power to increase competition and drive financial innovation through responsible products and services. As our members’ voice in Washington, FTA advocates for the modernization of regulation to support greater access to financial services.