Regulators turned their collective gaze toward FinTech firms this past week.
Specifically, the Treasury Department is slated to release (sometime over the next few weeks) recommendations that would tie into regulating financial services. Those regulations would serve as a nod to the advantages of FinTech efforts and sandboxes that encourage innovation.
This would be the fourth report from the department on financial service reform. The report has been presaged by a counselor to Treasury Secretary Steve Mnuchin, Craig Phillips, and the report may offer up suggested changes to existing regulations spanning lending and financial modeling.
The report may include as many as 100 recommendations, and could help shape the way the tech startups communicate with regulators.
Elsewhere, the Bank for International Settlements, which serves as a forum for central banks across the globe, seeks to have regulations introduced a decade ago be extended to the FinTech arena.
The oversight would be extended to include “macroprudential” policy, which means banks must build up capital buffers to help absorb systemic shocks.
“As current macroprudential measures focus mainly on banks, they may be less effective in dealing with risks arising from the market-based financing that has become more prevalent post-GFC,” the report stated. “Similarly, financial innovation and the application of new technology to the financial industry may shift the nature of risk, requiring a new set of policy responses and an expanded arsenal of instruments.”
P2P Car Sharing to be Treated Like Rental Car Firms?
Within specific verticals of financial services and regulation, P2P car sharing services may be subject to the same regulations as are traditional car rental companies.
The Wall Street Journal reported last week that startups such as Getaround and Turo may see, for example, oversight in Maryland, where car sharing firms will have to pay sales tax. In San Francisco, Turo has been sued by the city, which argues that it skirted the airport’s permit system — and charges such as those levied on rental firms should be assessed. Turo, in response, has said that it is a platform and not a rental business. The P2P services have three million cars registered in the United States.
In terms of small business lending, President Donald Trump signed a boost to the Small Business Administration’s oversight into law this week. The legislation affects the SBA 7(a) loan, among the most common type of loans that are extended. They have a maximum cap of $5 million. As reported in this space, and in a statement e-mailed to PYMNTS, Richard Hunt, the CEO of the Consumer Bankers Association, offered support of Trump’s signing the legislation into law. He said “CBA members are dedicated to assisting small business owners across the country and, of the 100 most active SBA 7(a) lenders, make the majority of these important loans.
“This new law ensures banks can continue providing businesses on Main Street the resources necessary to grow local economies and create jobs,” the CBA stated.
Congress passed the legislation in stages earlier this year.