CUNA supports oversight of financial technology companies, it wrote Wednesday to the Senate Banking, Housing, and Urban Affairs Committee. The committee conducted a hearing on so-called “rent-a-bank” relationships, and CUNA believes the committee should examine the legal framework and regulatory scope governing the oversight of traditional banks and other commercial businesses that are engaged in financial activity.
“Credit unions are concerned that non-regulated companies are engaged in financial activities through partnerships with regulated financial institutions allowing them to offer products and services that are traditionally offered by credit unions and banks, but without the regulatory safeguards that these non-financial service companies would be subject to if they were a financial institution,” the letter reads. “These so called ‘rent-a-bank relationships’ allow non-bank providers to operate under the cloak of a regulated entity will avoid regulations that would normally be in place, often from the state level, for the products and services they offer.”
CUNA cited its opposition to a proposed “payment charter” from the Office of the Comptroller of the Currency, as well as its opposition to any changes to the national bank charter that would lead to entities offering financial services but subject to less regulation and providing less consumer protection.
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