House Republicans Want to Change Fintech Regulations

April 6, 2016         By: Mike Dautner

In the House of Representatives in the US Congress, a consortium of Republicans are creating legislation to aid financial technology companies in the US.

This is a common trend among the major developed nations across the globe, primarily in nations like Australia and the UK, which are leading the world is robust and expansive fintech regulation.

Some commentators have noted that although the US has unsurprisingly received the lion’s share of fintech investment, a lack of comprehensive fintech regulation reforms have presented difficulties for the sector.

Rep. Patrick McHenry (R., N.C.) said that certain Republicans were drafting a set of new legislation called “Innovation Initiative”, with the aim to create a system for fintech companies to operate in more efficiently.

Currently, much of the US financial regulatory system was created and is stilled controlled by banking and lending institutions themselves.

Now some of these same institutions are calling foul, saying fintech companies have an unfair advantage by side-stepping regulatory burdens.

The legislation has yet to be introduced, but it will likely include provisions for online lending companies, known as peer-2-peer (P2P).

Long have these online lenders called for action by the government to create a framework of regulations that apply across the nation.

Currently many fintech startups are finding it difficult to expand to all 50 states due to the various rules and regulations in each state.

The legislation will most likely also include certain provisions to limit the power of the Consumer Financial Protection Bureau.