Fintech Regulation Disagreements in Washington

It appears that American legislators are finally beginning to pay attention to the success of the financial technology sector.

However, and unsurprisingly, it also appears that legislators cannot seem to agree on the proper approach to fintech regulations.

The technological nature of the fintech industry is obfuscating its own future. Regulators are not sure how to perceive fintech and its risks and benefits.

The disagreements among members of Congress generally follow party lines. North Carolina Republican Patrick McHenry in the House of Representatives has requested further research into the benefits of fintech.

“Innovation does not thrive when the heavy hand of government stifles creativity and collaboration,” he said, following traditional Republican economic policy.

At the same time, Senators Brown, Merkley and Shaheen – all from the Democrat party – have called on the GAO and the Treasury Department to look more closely at potential risks and lack of regulation in the growing US fintech sector.

Both parties recognize the importance and success of fintech, but neither group can seem to agree on how to approach regulatory matters for the industry.

But both parties are about to receive some education on the matter. Earlier this month, both LendingClub and Proposer Marketplace, two of the largest online lenders, formed their own lobbying group.

So far, US lawmakers have been slow to react to fintech, both in regulating and supporting it. But now multiple agencies in the government are beginning to conduct studies into fintech and feed this information to lawmakers.