Superintendent of the Department of Financial Services Adrienne Harris discussed if fintech could live up to the promise of financial inclusion and state regulators' role in her keynote.
The Securities and Exchange Commission (SEC), a financial government agency overseen by the Financial Stability Oversight Council, held a fintech forum discussing the industry; industry speakers included Ram Ahluwalia from PeerIQ and Matt Burton from Orchard; SEC speakers included Mary Jo White and Michael Piwowar; Mary Jo White focused on fintech responsibility suggesting thorough testing of various aspects of the business before introduction; Michael Piwowar focused on fintech sandbox testing and suggested that the SEC should be the lead agency regulating fintech; in an announcement on Monday, Mary Jo White also said she would be leaving her role in January. Source
A report from LexisNexis Risk Solutions finds that financial institutions prioritize transparency and inclusion but face challenges.
In their recently completed review, the Financial Conduct Authority (FCA) was particularly worried about some platforms using customer money to buy loans from rival platforms; FCA CEO Andrew Bailey explained that platforms don't have enough loans to present so in turn they use investor money to buy up loans from a rival platform; this is worrisome as investors are not being told the correct risks; Mr. Bailey did not disclose any platforms by name and said the issue was not widespread but worth keeping an eye on. Source
[Editor’s note: This is a guest post from Ryan Metcalf, Head of Public Policy & Social Impact at Funding Circle.] Fintech...
A new law has passed in New York to provide support for online lending; the law includes direction for the development of an outreach campaign that will educate small businesses about marketplace lending; educational materials will come from the Department of Economic Development and the Department of Financial Services and will include simple language detailing potential costs and risks including the disclosure of percentage rates, fees, charges and early repayment options. Source
US legislators have proposed that student loan debt be discharged in the case of bankruptcy; the current law gives added protection to student loan lenders by requiring the debt to be repaid in bankruptcy; lawmakers and lobbyists are also considering other provisions that would provide debt relief to student loan borrowers who have filed for bankruptcy; while the debt relief initiatives will benefit borrowers, the effects will add increased default risk for investors in private student loans and private student loan securitizations. Source