Fintech regulations

Income share agreements, which allow college graduates to repay tuition financing as a percentage of their future income, have come under fire lately from consumer advocates for questionable marketing and other potential legal violations. Some hope a partnership between a Virginia bank and an ISA provider will give the product more legitimacy, while others worry it just masks risks for borrowers.

A congressional resolution that invalidates the regulation issued last fall by the Office of the Comptroller of the Currency would help regulators crack down on so-called rent-a-bank schemes that promote predatory lending, the president said before signing the measure.

Six online lenders and the National Community Reinvestment Coalition have asked the Consumer Financial Protection Bureau for clarity on whether disparate-impact rules apply to lending decisions made by machines.

Some worry the Senate’s rejection of the OCC rule hampers efforts to clarify legal standards for banks selling loans to fintechs.

Rohit Chopra, President Biden’s nominee to lead the Consumer Financial Protection Bureau, has not minced words in calling out private companies for wrongdoing. He could get a grilling from Banking Committee Republicans and some opposition on the Senate floor.

A panel appointed by the Consumer Financial Protection Bureau said Congress should consider authorizing the bureau — and not the Office of the Comptroller of the Currency — to issue federal charters to fintech companies.

As it attempts to craft policy on access to consumers’ financial account information, the agency is wading into a battle between those who want data to flow more freely and those who prioritize security.

The OCC is trying to seize jurisdiction by arguing that current supervision is haphazard. But states are already working together to streamline regulation while continuing to enforce consumer protections and encourage innovation.

A second-term Trump administration would likely continue its deregulatory efforts, focus on Fannie Mae and Freddie Mac's exit from conservatorship, and seek to facilitate fintech participation in the banking system.

In signing off on deposit insurance for the payments giant and student loan servicer, the FDIC sanctioned the first new industrial loan companies in over a decade.