Treasury: Fintech oversight needed to protect consumers

The Treasury Department released a report Wednesday assessing the impact of fintechs in the financial services space. NAFCU met with the department earlier this year to share concerns about the lack of accountability and supervision of fintechs.

The Treasury’s report found that nonbank firms are adding complexity and competition in core consumer finance markets, such as mortgage lending and managing finances. While their participation may improve the delivery of some financial services, they also pose new risks to consumers and the financial system, specifically risks related to reliability and fraud.

To address concerns, Treasury recommends federal banking regulators and the CFPB use their authorities to maintain a level playing field, promote competition and responsible innovation, and protect consumers and market integrity. Some of the report’s specific recommendations include:

  • ensuring that credit underwriting practices of all lenders are designed to increase credit visibility, reduce bias, and prudently expand credit to consumers;

 

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