How is the U.S. Treasury Department going to regulate the financial technology sector now that it’s made such a big impact both in this country and other parts of the world? That’s the question that’s been lingering in the minds of those in the financial industry for months. The thought has been that the Treasury Department might consider creating a brand new regulatory framework that would serve to regulate fintech firms and other financial intermediaries that fall outside the jurisdiction of traditional banks.
But, it sounds like the Treasury Department has decided to go in a different direction.
According to reports that emerged in June, the Treasury Department is preparing to release a report regarding the regulation of non-banks soon.
And in that report, the Treasury is reportedly going to recommend that regulations pertaining specifically to fintech could be outlined within the confines of the rules that already exist for banks and other Treasury-regulated financial institutions. That would mean online lenders, online payment companies, and other fintech businesses could potentially be governed by the same framework of regulations that applies to traditional banks.
Regardless of what the Treasury Department recommends, fintech regulation is something that’s been a hot-button topic for some time. There has been ongoing uncertainty and a desire for clarity with regard to fintech regulation, which has created some chaos and confusion among those in the financial world. There have also been concerns about the inconsistencies that exist when it comes to fintech regulation at the state and federal levels. The Treasury is expected to encourage state and federal agencies to work more closely as far as fintech regulation is concerned.
At Portfolio Financial Servicing Company, we have a strong interest in the future of fintech and the regulatory issues that surround it. Call us at 800-547-4905 to learn how we can help you.