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Financial technology has gone mainstream, with nearly nine in ten Americans using some form of fintech in the last year. From lending and payments to investing, fintech fills the gaps left by traditional financial services with safe, transparent, and consumer-centric products that lower costs and foster inclusion.

The rise of fintech adoption has sparked discussions around appropriate regulations to govern these new technologies. Today, federal and state regulators apply essential consumer protection laws and regulations to fintech providers. Yet, in many instances, modernized financial regulatory policies can help ensure that consumers, small businesses, and the broader economy reap the benefits of responsible fintech.

This white paper from the Financial Technology Association (FTA) outlines the current state of fintech regulation. It provides suggestions for improvements to further promote safe and consumer-centric innovation in financial markets and services.

Key Findings Include:

  • Fintechs play a crucial and wide-ranging role in modern financial services, improve technological capabilities, and enhance financial choice and outcomes for consumers, small businesses, and market participants.
  • Fintechs are subject to robust oversight by state and federal financial regulators. They must comply with a range of laws designed to protect consumers and ensure the safe and sound operations of financial institutions.
  • Policymakers should prioritize forward-leaning, modern regulatory frameworks that continue to spur innovation while safeguarding consumers, including:
    • Supporting public-private standards-setting organizations and certification mechanisms, as well as enhancing third-party risk management guidance to foster further technology adoption and safeguard our financial system.
    • Supporting and encouraging fintech-bank partnerships to provide consumers and small businesses with improved access to capital and financial services.
    • Harmonizing the payments regulatory framework through streamlined state-level regulation and related oversight and examination processes for fintech firms.
    • Recognizing broad federal regulator chartering authority and fostering viable paths for fintech applicants to advance innovation and competition in financial services.

Access the full Fintech Regulation, Explained Report here.


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