A Democrat has some serious advice for Congress when it comes to FinTech.
“If we fail to act on FinTech, we are setting ourselves up for problems down the road,” Rep. Emanuel Cleaver, D-Mo., said in a recent interview reported by American Banker. “Not because the FinTech folks are evil … but because we are behind the curve. We have a good chance now to build a road down which the wagon travels, and I think we ought not to blow it.”
While the Senate Banking Committee held a hearing on the financial technology sector in September, and House committees have held hearings in the past, Congress hasn’t really addressed any actions that must be taken regarding the pitfalls and rewards of these new services.
Cleaver, the top Democrat on the House Financial Services housing and insurance subcommittee, is not opposed to FinTech. He voted in favor of legislation supported by online lenders, including a bill introduced that would allow bank loans made at one interest rate to be legally sold to a non-bank at the same rate.
However, Cleaver hasn't shied away from discussing potential issues at online lenders, especially the concern that gender and racial bias could be a factor in lending decisions.
To start the process, Cleaver wants to study FinTech before deciding what safeguards are needed – and he would like Republicans to hold more hearings on the technology.
“We absolutely need to have representatives from FinTech before the Financial Services Committee," he said. “We have to have a good idea about FinTech and online banking … before we start thinking about where they fit or will they be a new category altogether, separate and distinct from the big banks, from the community banks.”
He added that “if we are going to redesign this whole system, which I think is needed, then we are going to have to bring some of the smartest people before the committee.”