WASHINGTON–With both credit union trade groups pressing Congress to bring fintechs under the same regulatory umbrella as other financial institutions, one of the key questions to be asking is what happens when things go wrong, according to NAFCU.
Credit union trade groups have called on Congress to ensure a “level playing field” between unregulated fintechs and credit unions. A number of fintechs have in the last year seen strong user growth into the millions of customers. Congress held a hearing on the issue last week.
“What we saw from the hearing is there are still a lot of questions,” said NAFCU EVP and General Counsel Carrie Hunt. “We are going to see more hearings on this issue. I think, ultimately, there is going to be a lot of disagreement as to what that regulation should look like. There is agreement that traditional financial providers can find value in partners, including fintechs, which can innovate quickly. It’s when they go one step further that begs the question around safety and soundness. We think credit unions provide the best option for consumers cradle to grave. These apps to move cash around quickly have a very finite purpose. The consumer really likes them until there is a problem, such as fraud, and then they end up going back to their credit unions. This is about a fair playing field.”
Regulatory Rollbacks’
Separately, the Biden Administration continues to roll back a number of Trump Administration rules and regulations, most recently around fair housing
Hunt said NAFCU is watching the moves being made by the Biden Administration, as it strongly supports a “deregulatory agenda.”
“If there is re-regulation, we want it to be necessary regulation,” said Hunt. “That’s how we view these rollbacks. We strongly support fair housing. Generally, it’s not the intent of regulation we have an issue with, its regulatory burden and whether it’s necessary to achieve those goals. Generally, there are other ways to achieve those goals.”
WASHINGTON—Credit-unions face a potential regulatory vacuum as the Trump Administration formally has determined the CFPB’s current self-funding mechanism unlawful—a move that could put the agency on a path to closure in early 2026 unless Congress steps in. For credit-union leaders, who rely on the Bureau’s oversight of consumer-finance markets and enforcement of unfair practices, the decision signals a major disruption to the regulatory environment CUs navigate daily. In a court filing released late Monday, the Administration declared that the CFPB is now legally barred from seeking additional funds from the Federal Reserve System—the agency’s usual funding source under the Dodd‑Frank Wall Street Reform and Consumer Protection Act, POLITICO reported. That means the Bureau’s remaining resources will likely carry it only through the end of the year, after which it “anticipates exhausting its currently available funds in early 2026.” CUToday.info has tracked this story, noting in Oct...
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